The wages The private sector began a path of recovery – from a very low floor – last April and the trend continues to strengthen, with increases of more than 10 percentage points – it could even be 13 – above the inflation projected for 2024according to the Salary Increase Trends in Argentina (TISA) survey of Mercer.
In the last survey of the year, the consulting firm recorded a pattern of salary increases of 136% (median) in December, which represents a drop of three points compared to the November report. Although this data contrasts with a inflation of 123%as measured by Latin Focus (December 2024), while the price variation projection of the companies is located at a 124%. Hence the recovery of income.
The data comes from the 12th report of the year, which analyzes salary projections, what happened in 2024 and the economic outlook for 2025, surveyed among 496 companies based in Argentina by the consulting firm Mercer.
“The current macroeconomic outlook and the context of uncertainty continue to represent a challenge for companies when making salary projections,” the report highlights.
Private salaries: on the recovery path
Since April, the wage increase in the general market exceeds accumulated inflation, as measured by Mercer. In this context, companies with headquarters in Argentina demonstrated greater agility in adapting to the context, adjusting their salary budgets more quickly. However, these companies present a budget 10 percentage points below that of multinational subsidiaries.
Regarding the frequency of adjustments, The practice that prevailed this year was to grant between five and six salary increases. Due to the slowdown in inflation, many companies readjusted the amount of increases to be granted.
Furthermore, the report highlights that 13% of companies transfer 100% of inflation to salarieswithout considering the market as a reference. It should be noted that the subsidiaries -subsidiaries of companies- had an increase in 139% in the median, while in the parent company the increase was 129%.
“The year 2024 showed a change in trend: Wage increases finally outpaced inflation. However, the recovery of the loss of purchasing power is not complete due to the accumulated loss from previous years,” highlighted Inés. Garcia ToscanoCareers & Rewards Manager at Mercer Argentina, Uruguay and Paraguay.
The outlook towards 2025
For next year there are many companies that are still defining the budget for salary increases and determining the estimated inflation, but, for now, they are projected a few points above the Consumer Price Index (CPI).
“We estimate that, in this way, the instances of review of increases will tend to decrease and by 2025, between three and four moments of adjustment of increases per year are expected,” said García Toscano and added that “some of the practices that could regain prominence In terms of compensation, they are the increase based on merit, to the extent that companies can allocate a part of the budget in order to reward individual performance and, as for benefits, we understand that “It will be a focus for companies to offer a benefits package that is competitive and valued for employees.”
According to the Mercer report, Only 38% of companies have a defined budget for 2025, with a median salary increase projected at 45% for the general market. Of the companies with a defined budget or under evaluation, 18% estimate granting four salary adjustments during the next year.
Source: Ambito
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