Uruguayan companies plan to grant a salary increase of 8% in 2022. The data comes from a survey carried out by the global consulting firm Mercer in which 47 leading companies from Uruguay participated between March and April.
Analysts who responded to the latest Inflation Expectations Survey of the Central Bank (BCU) in May expect an increase in prices of 8.5% by the end of the year. Thus, in the case of this sample of 47 leading companies, their workers would have a loss of their purchasing power of the order of 0.5% this year. The purchasing power of wages in Uruguay closed in the 12 months to April with a fall of 1.9%.
44% of firms plan to grant two increases in the year, 33% will provide one; 18% will grant 3 or more increases in 2022 and 4% indicated other options. the months of elder prevalence for these increases in the salaries of its staff are March and June.
“The practice of granting two increases in the year is usually the majority in Uruguay,” said Ivana Thornton, director of Mercer’s Career for Argentina, Uruguay and Paraguay.
55% of the companies include in the expected increase percentage the increase for merit, while 34% do not and 11% do not have this type of increase. “The increase for merit is important because it seeks to differentiate the increase based on the employee’s performance, in general, this increase represents between 3% and 5%”, explains Thornton.
performance bonuses
Regarding the bonus paid for 2021 performance, 36% of the organizations indicated that it was paid on target (according to the planned goal); 34% said they paid more than the target; 21% below; 4% indicated that they did not pay it because they had not achieved the minimum performance results and another 4% indicated that they do not have a bonus payment policy in the company.
“When we asked this question late last year, the percentage of companies that believed they would pay above target was lower. However, we see that ultimately, the proportion of companies that exceeded expectations increased and, therefore, also the payment of the bonus above the target”, said Thornton.
The bonus is generally determined by the performance of the company at a local, regional and eventually global level.headded to the individual performance of the employee. These components have a different impact on each employee’s bonus, depending on the position they hold in the company.
merce
For example, At the highest levels, the company’s overall performance has a large bearing on the bonus. On the other hand, at the lowest levels, individual performance is the one that has the greatest weight. Bonuses are calculated based on a target or reference amount if the objectives are met 100%.
As for 2021, the total annual salary increase granted by companies was 8%. “This percentage coincides with what the companies had estimated to grant in the year, according to the Spot survey carried out by Mercer in November 2021 among 30 companies in Uruguay. In other words, the expectation that the companies had was maintained,” said Thornton.
