Companies project a salary increase of 139% in the median of 2024, two points below October. At the same time, companies that have already defined their budgets for 2025 – 31% of those surveyed – project an increase in 48% in the median for the general market and they anticipate a reduction in the number of salary adjustments, with an average of four annual increases.
This is demonstrated by the eleventh survey of Salary Increase Trends in Argentina (TISA)in which 482 companies with operations in the Argentine market participated.
The private inflation projection for 2024 also decreased to 127%as measured by Latin Focus in November 2024, in line with companies’ estimates. The adjustment reflects widespread caution in the private sector, as companies seek to adapt to the current macroeconomic outlook. However, conditions of economic uncertainty and cost fluctuations continue to present significant challenges for companies when planning their salary budgets.
“Although salary increases in 2024 in the market median will exceed inflation for the same period, this recovery will not yet be sufficient to compensate for the strong loss of salary purchasing power in recent years up to and including 2023. Organizations then seek to review other aspects of the value proposition such as benefits,” he said. Mercedes Bernardi Client Development Sr. Manager at Mercer.
Salary increases exceed accumulated inflation since April
Salary increases in the general market exceed accumulated inflation since April. In this way, it reflects an effort by companies to maintain purchasing power of the employees.
National companies with headquarters in Argentina demonstrated greater flexibility and responsiveness compared to multinational subsidiaries. They adjusted their salary budgets downward more quickly in the face of a decrease in inflation, with a budget 7% lower than that of foreign companies.
Among the industries that stand out the most regarding their annual salary increase projection in 2024is found mining first of all with 156% increase (17% more than the average), followed by Biotechnology with the 150% and third media and entertainment with 147%.
Furthermore, this report emphasized the dispersion of increases between different industrieswith a gap of 37 percentage points between the maximums and minimums. This shows that, while there are sectors that give larger increases to retain key talent, other sectors with tighter margins show tighter increases.
In 2024, most companies opted for 6 or more increases per year, which allows them to react quickly to inflation.
Additional benefits
In addition to the salary increasescompanies incorporated additional benefits as part of their strategies to attract and retain talent. Among the most popular measures are in-person and online training (53%), gym subsidies (49%), coverage of food expenses such as lunches (43%), financial wellness programs (37%) and improvements in health plans (31%). These initiatives seek to complement salary adjustments and respond to employee expectations in a competitive labor market.
By 2025, a scenario is envisioned in which companies could resume differentiation by merit, allocating specific budgets to reward individual performance. However, the success of these strategies will depend largely on economic stability and public policies that influence the business environment.
Source: Ambito
