We entered 2023 with the burden of an average annual inflation rate of 7.8%, the highest in the past 30 years, and with most companies unable to absorb this historic increase in the cost of living in their employees’ salaries . In this new year, private sector wage increases will be well below inflation and workers’ expectations, with variations between 2 and 4% and only occasionally above the 4% threshold. To retain employees, companies are betting on the “emotional salary”, which includes factors such as remote working and work-life balance.
“The current economic context and the projected crisis scenarios for 2023 create expectations and pressures on various sides of the balance sheet,” said Rui Teixeira, country manager of ManpowerGroup. Professionals want a salary that matches the abrupt increase in the food basket and the rise in interest rates. Companies, in turn, are confronted with a sharp increase in the costs of financing, energy and raw materials. A situation that has led “managers to seek more control over expenditures that are not subject to these consequences, making them more cautious about salary increases”. In short, “inflation is not accompanied by a relevant wage increase for employees,” he says.
Joana Reis, associate manager at Michael Page Engineering & Manufacturing, shares an identical view. According to his estimates, salary increases in 2023 will be “less than the increase in inflation”. In general, “they should experience an appreciation of between 2 and 4%”, but “in more dynamic sectors, this increase will exceed 4%”.
With organizations pressed for money but aware of the need to retain their employees, the strategy will be based on strengthening benefits, labor flexibility and work-life balance.
As emphasized by Nathalia Leite, sales manager at Adecco Recruitment, “investing in emotional pay can play a key role”.
“In the post-pandemic world of work, there is an awareness that the nuances of a successful work life are broader and more holistic, taking into account daily work-life balance, physical and mental well-being, as well as an adjusted salary and in line with the highest inflation rate in the last three decades,” said Adecco’s head.
In his view, “organizations that have less capacity to raise salaries to attract talent should focus on other retention levers, namely providing tailored flexibility, career advancement prospects and a focus on valuing mental health and well-being .”.
The Hays 2023 Guide concludes that the wage issue will be the focus this year, with workers’ expectations based on the increase in their income. According to the study, “31% of professionals expect their salary to increase by at least 10%”, but “only 7% of employers foresee the same situation”.
In this scenario, “the solutions that employers can find to meet the expectations of professionals will be to bet on emotional salary and extra salary benefits”, such as remote working, flexible hours, career plan, performance bonuses, training plan, extra holidays, health insurance, suggests Paula Baptista, managing director of Hays Portugal.
Rui Teixeira says more disruptive solutions are also emerging to captivate professionals, such as the use of cryptocurrencies or NFT, especially in the technology sector, as well as corporate equity plans.
lack of talent
Despite an environment that will lead to a contraction in the economy, or even a recession, companies “continue with very optimistic hiring intentions” for 2023, says the Hays Guide. “However, next year’s uncertainty is the first certainty for now”. As Inês Casaca, associate director RPO and Risesmart at Randstad Portugal, analyses: “It will be the first crisis we experience in which there is still a shortage of talent and the downturn in the labor market is not yet over. evident”. Now “companies will make even more decisions involving their people and structures”, but are “concerned both about opportunity creation and retention”.
According to Rui Teixeira, there is a mismatch of talent in the country. The demand for skills is not matched by the supply of professionals with the desired qualifications. “National employers are finding it increasingly difficult to fill the vacancies they post on the market,” he emphasizes. This is a problem that cuts across most sectors of activity, but it is particularly acute in banking, finance, insurance and real estate.
According to forecasts by Robert Walters, the recruitment market will be very active in information technologies, with strong demand for profiles in data, automation, artificial intelligence, software, engineering, renewable energy, construction & real estate and industrial services. Companies will also try to ensure their financial health, which means that professionals in management, finance and accounting will be in high demand.
Sónia Santos Pereira is a journalist for Dinheiro Vivo
Source: DN
