In Argentina, companies continue adjusting their salary increase budgets downwards. This reflects a downward trend in inflation projections, according to the latest TISA survey, conducted by global HR consultancy Mercer.
In the study, which included the participation of 501 companies with operations in the country, it is observed that the annual budget for salary increases for the general market in 2024 stands at 154%, while By 2025, this value will be reduced even further, reaching 65%.
Companies adopt various criteria for defining salary increases. 57% of companies consider a combination of factors to determine increases, while 16% fully transfer inflation (100%). Another 16% rely exclusively on market conditions, 7% apply provisions of Collective Bargaining Agreements (CBAs), and 5% partially transfer inflation.
Regarding the application of these increases87% of companies do it uniformly for the entire working population, while 13% opt for selective increases focusing on hierarchical levels, key talents or specific areas.
Private inflation projections decreased significantly, standing at 142% (Latin Focus – August 2024), while Companies expect inflation to reach 148% by the end of 2024. This reduction in inflationary expectations has directly influenced the reduction in salary increase budgets for the coming years. In fact, the salary increase projection for the third and fourth quarters of this year shows a slight decrease compared to the July survey (TISA #7).
In addition, 15% of companies are opting for a strategy to ensure annual increases above inflation, while 31% are considering this possibility. However, the remaining 54% do not contemplate this strategy in their plans.
Regarding the dispersion of salary increases between industries, the survey shows a decrease in the gap between highs and lows, going from 59 percentage points in the previous edition to 40 points in this latest one.
According to the consultancy, “2024 brings a different dynamic for organizations. For the first time in a long time, we are facing a scenario in which salary increases exceed inflation, both those granted until today and those projected until December. This means a partial recovery of purchasing power. However, The significant loss that has occurred in recent years is still far from being compensated for,” he clarified.