As proposed, labor reform would lead to layoffs in companies

Most companies believe that if the labor reform is approved by the Congressas presented by governeitherlabor costs would increase by 15-30%, leading to downsizing.

This is what 9 out of 10 companies that were consulted by Acrip Bogota Region in association with Econometrics in a study on the impact of the proposed change.

(‘Fintech’ Cobre facilitates payments between companies).

For the union, the increase in costs can cause multiple unwanted effects, since the companies participating in the study indicated potential reactions if this situation occurs.

88.9% stated that they would reduce the number of employees if costs increased by 30%, and 81.0% He said the same if the increase in costs were 15%.

(‘Without savings, pension systems are unfeasible’).

On the other hand, 79.4% said they would restrict current or future growth, expansion or investment plans in the face of increases of 30% and 73.0% if the scenario is 15%.

The least cited potential reactions are withdrawing foreign investment and ceasing to operate. However, in the face of an increase in labor costs, these reactions would occur in more than 30% of the companies, the study details.

(‘If there is no stability, you will not achieve reforms that serve everyone’).

The analysis, which also included interviews with experts in labor matters, revealed that the initiatives of the Reform related to the creation of special contracting modalities for agricultural workers, and what concerns issues of diversity, equity and inclusion, were valued as necessary to the economic and social development of the country.

Glladys Vega, president of the Colombian Federation of Human Management – Acrippointed out that “Although in the study we found some points that may be favorable for job stability, there are more issues that concern the business sector and that are considered not only unnecessary, but that may hinder the continuity of the business fabric”.

(This is how the labor reform affects Jorge Rausch and other businessmen).

Among them is the restriction of outsourcing which, according to the analysis, can reduce the room for maneuver of companies in the face of changing market conditions.

In this sense, various labor experts consulted in the study agreed that a fraction of what was outsourced would be incorporated into companies, slightly increasing salaried employment and reducing informality, but at the same time it would make it more difficult to create employment by making it more expensive, contrary to formal employment.

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