Argentina’s sad position

According to the Mercer 2020 Total Compensation Survey, which collects data from 4,000 Latin American companies. The countries with the highest wages are: Uruguay, Chile, Mexico and Brazil.

While Argentina is located in the lowest rank, either against the official exchange rate, or in cash with payment, with chances of getting worse in the future, said Ivana Thornton, Mercer’s career director.

The study also highlights the purchasing power of these salaries by taking as a benchmark the cost of living index for cities prepared by Mercer for expatriates. In this case, the best relation between the cost of living and the salary is Uruguay Yes Chile.

Regarding the wage increases except for Brazil, the rest of the countries were a few tenths above inflation If, with regard to the variable bonus, the document indicates that 91% of Latin American companies paid the bonus to employees for 2019 performance as planned.

Regarding the expected budget for 2020 performance compared to the actual payment for 2019, in Latin America, 21% of companies said it will be lower, 7% said it will be higher, 26% said that there would be no change; 46% said it was too early to decide. In Argentina, companies responded in the same direction.

Classification of salaries

When analyzing the salaries of professionals in the region, the local salaries They are also lower than those paid in Chile, Uruguay, Mexico and Brazil, even taking into account the cost of living.

Thus, at the executive level, measured in dollars, according to Mercer data, while in Uruguay salaries u $ s6,000 per month and in Chile exceed the u $ s5,400, in Argentina, they barely cross the barrier of u $ s3,000 (official change), being the lowest in the region.

To complete the picture, Brazil still on the scale, with u $ s3.359, then comes Colombia with u $ s4.097 and in Paraguay is located in the u $ s4,900.

For analysts, the numbers are even lower, but at least in this category, Argentines overtake Colombia in their monthly pay:

Argentinian wages, low in dollars

Content on layoffsThe most general effect of these months of confinement is in many cases the reduction of salaries, but not only among middle or senior managers.

“The pay cut is the biggest change in these months. Many workers began to earn less, with losses agreed between employers and unions. On the other hand, there have been several cases of wage cuts without a deal. There are also cases of suspensions with reduction in salary and, to a lesser extent, arrears of payment. In total, they constitute a large number of employees, ”Scarano emphasizes.

To this is added another difficulty. “The pandemic has affected the number and methods of recruiting staff. Although some companies do not hire professionals effectively, when they need them, they choose to incorporate temporary staff. But there is no impact on salaries, ”explains Cynthia Isabelle, Director of Permanent Placement at Adecco Argentina.

Local wages lose value against the dollar

What is happening at the executive levels?

At the executive level, the rule is repeated: wages are among the lowest in Latin America. “We are way below the region, mainly because two factors influence Argentina: inflation is higher than the wage adjustment several years ago (beyond the pandemic), and, in addition, it there is the price of the dollar, ”Ezequiel defines. Palacios, Associate Director of Glue Executive Search.

“The combination of these two factors means that the dollar salary in our country is half that of a similar executive in the region. In Uruguay, for example, a senior manager earns around $ 9,000, while in Argentina the manager earns about $ 9,000. u $ s4.000“, adds Palacios.

Of course, this expert points out that “This factor also makes long-term hard currency bonds such as the dollar weigh so heavily on compensation and benefits programs.

As we expected, these differences favor the migration of local talent to foreign companies, even if they physically remain on Argentine soil. And this happens mostly in the IT industry and at C level.

“In the case of senior executives, Wanted to compensate for the effects of devaluation in one of the elements of the salary to keep it. For example, increasing the proportion of incentives implemented in hard currency. Dollarization of wages is still on the table as a possibility, but it ends up being complex to implement due to the existence of more than one exchange rate and the local difficulty of accessing the foreign currency market. », Describes Mercedes Bernardi, leader of Mercer Products Career.

In the case of talento IT, “We see that the salary increases in the high-tech industry are above the general market average. In view of the current reality, these positions are essential for most of the highest paid, adds Bernardi.

In Uruguay, a senior executive earns almost twice as much as an Argentinian

Another of the variables studied is the gender gap in Latin American companies. In this sense, the female representation increased from 32% in 2013 to 38% in 2020. The pay gap in 2020 was reduced by 3% compared to 2015 at the professional level; 2% at Manager level and 6% at Executive level.

The pay gap between men and women at the executive level is 15%, compared to 12% in Argentina; in Panama the highest (31%) and in Mexico the lowest (10%). At manager level, the pay gap between men and women is 10% in Latin America and Argentina; the highest is recorded in Panama and the lowest in Mexico. At the professional level, the difference in Latam is 8%, in Argentina it is 9%; the highest difference is recorded in Brazil (17%) and the lowest in Panama (2%).

Regarding the advantages that companies offer to their employees, organizations are putting more emphasis on flexible benefits, adapting them to this new reality. In the health and wellness category, the prevalence of preventive interviews, nutrition plan, stress management program and financial well-being is higher.

Impacted by Covid-19, companies are working to adapt to the new normal, to organize a safe return of workers and to reinvent the way they go to work.

In this sense, the areas and functions of accounting and finance, followed by administration; Human ressources; IT and purchasing are among those that will become totally or partially distant after the pandemic.

33% of organizations have implemented a flexible working policy in response to the pandemic and 35% of organizations already had a flexible working policy before. 25% of organizations plan to maintain the current flexible working policy at all times and 68% of organizations predict that employees will be more likely to use flexible working arrangements once the pandemic is over.

The types of flexible arrangements offered to employees include: compressed work week (14%); employees can decide whether they can work from home or office (38%); flexible working hours (73%); part-time (16%); others (19%).

One of the big issues this year was the hiring freeze. 39% of companies indicated that hiring is frozen indefinitely; Another 39% pointed out that with an indeterminate date, respecting a predefined set of business parameters (eg level of sales); and 22% indicated that they are suspended for a defined period of time.

The look in 2021

According to a study by Willis Towers Watson (WTW), the projected salary increases for 2021 in Latin America reflect the prospect of a market recovery. It is linked to the expectations of economic growth and improvement in the different countries. There is clearly a conservative aspect to the projection of salary increases, and we see that in most cases it does not correspond to the increase planned before Covid-19.

In this sense, as stated in the report (WTW), only Mexico and Peru plan to return to the levels of increase planned before Covid-19. The rest of the countries are prospecting for a percentage greater than the increase after the coronavirus, but this does not reach the score expected before the pandemic.

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