March 2020 marked the beginning of a new phase in the labor market in Portugal. With the appearance of the first cases of covid-19 in national territory, the country stagnated in a confinement that potentiated collateral effects that negatively affected the national socioeconomic scenario.
Uncertainty set in and companies adapted to the new reality. Remote workers, less turnover or lay-off schemes affected several sectors, having a direct impact on the national unemployment rate.
Has the pandemic transformed ways of living and working, and what impact does this have on compensation? More agile policies, with greater flexibility and choice for employees seem to be one of the paths. Looking at compensation integrated into the value proposition of organizations for their people is increasingly essential”, explains Tiago Borges, Business Leader of Career at Mercer Portugal.
Once the eye of the hurricane has been overcome, the labor market is getting back on its feet and 2021 really seems to be the year of recovery.
The study Total Compensation Portugal 2021, carried out by Mercer, has the largest sample of participating companies ever. Among the more than 500 companies in the Portuguese market surveyed, 31% said they intend to increase the number of employees this year.
The trend does not disappear in 2022, with 27% of employers maintaining the expectation of hiring again, with 41% not having decided to date whether to increase, maintain or reduce the number of employees.
If a year ago we asked ourselves whether the changes related to the pandemic would come to stay, today we know that they will and that teleworking or flexibility will become part of the day-to-day activities of organizations. The current issue is mostly related to finding the right balance at various levels, including compensation.”, says Tiago Borges.
According to the data analyzed, most organizations “points out as the main factors for the salary increase: the individual performance of the employee, the position in the salary grid and the company’s results”.
On the opposite spectrum, only 7% of these companies reveal that they have planned reductions in the number of employees.
From the point of view of wage increases, 2022 will indeed be the strongest year, with increases surpassing those that will take place in 2021. These revisions to salaries should take place throughout the year, with a special focus on January (21%), April (21%) and March (19%), with 29% of organizations still not having a defined date.
Wage freezes also seem not to have withstood the vaccination process. This number will decrease from 11% in 2021 to 7% next year. At the peak of the pandemic in Portugal, in 2020, this figure stood at 17%.
The data observed in 2021 under Total Compensation are signs of a positive recovery from the pandemic. Most organizations now demonstrate more confidence, and assume the intention to hire and offer salary increases to their employees. Employees themselves seem to be more comfortable with changing situations, a factor that can be assessed through the voluntary turnover indicator. Although still a little far from what was observed in 2019, all indicators show a very favorable evolution”, refers Marta Dias, Rewards Leader of Mercer Portugal.
The benefits offered by companies to the most common employees continue to be the health plan (92%) and the car (89%), but there is an increasingly evident concern of the companies in training support, which now reaches 46%.
For this study, the jobs of 502 companies present in the Portuguese market were analyzed. The study sample Total Compensation 2021 it is mostly made up of international companies (62%) with the location of the Motherhouse, in about 24% of cases in the United States of America and 16% in Germany. National companies correspond to 38% of the analyzed sample.
Regarding the Number of Employees, 49% of the analyzed sample consists of companies with a staff of up to 100 employees. It is also noteworthy that 18% of the sample corresponds to companies with more than 500 employees. There is a relative balance between Genders, even though the male presents 2% more than the female (48% female and 52% male).
O Total Compensation is an economic study carried out every year since 1998 and enables companies to respond to their needs for benchmark, and get to know the compensation and benefits policies and practices in the Portuguese market.