The complex economic panorama that has been experienced for several months, the lack of a concrete reactivation plan and the fact that the slowdown will be felt until the middle of next year; are factors that are affecting the perception of businessmen in Colombia, who apparently are thinking sit still in the coming months and hope that everything improves.
This was recorded in the Total Remuneration Survey (TRS 2024), presented this week by the firm Mercer, which warns that economic and fiscal challenges have led to business to the realm of caution and, for example, do not consider the possibility of moving their payrolls.
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William Rincon, Industry and Product leader for Mercer’s North Cluster, said that according to this survey, of the firms consulted for the study, only 16.4% contemplate increasing their payroll, while 7.3% consider the possibility of reducing it.
He also maintained that regarding salary adjustments for next yearorganizations plan to base their decisions on three key criteria, starting with the inflation rate and market trends (67%), individual performance (66%) and union agreements (21%).
Employment
“It is expected that the average salary increase intention for 2025 will be around 6.9% in the general market, although this may vary when looking at a specific sector. This type of decision responds to a precautionary strategy with which organizations seek to stabilize themselves in the face of possible market fluctuations. Likewise, they are carefully evaluating their needs and opportunities before making decisions about the workforce,” Rincón confirmed.
Mercer’s findings also put on the table that there is currently a change in trend in staff turnover over the last year, in which scourges such as job desertion are no longer having as much of a negative impact as before.
“It has been concluded that this indicator went from 10% in 2023 to 7% in 2024, which suggests that companies are managing to maintain greater stability and that employees feel more secure, especially in a context of change. In contrast, it was also possible to identify that involuntary rotation went from 7% in 2023 to 6% in 2024,” said the spokesperson for this firm.
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Market composition
To carry out this analysis, Mercer took information from 517 companiess that operate in Colombia, in which they also reviewed demographic variables such as age, gender and location, which are essential to design effective compensation and benefits strategies, finding that there is a change in the management composition.
In this sense, William Rincón stated that although Baby Boomers represent only 2% of the total working population, they continue to stand out in senior management positions, which allows them to obtain the highest income due to their professional experience. However, they report a growing presence of Generation X and Millennial collaborators in this category, which confirms an eventual generational change in company leadership.
“For their part, salary differences between genders show notable progress in closing gaps, especially at managerial and executive levels. However, significant discrepancies still persist: in executive positions, the salary gap is 17%; in senior management, 7%; and in professional positions, this difference rises to 20%. These data underscore the need to continue working toward real salary equity at all levels of organizations,” the report reads.
Economic recession
It must also be said that geographical location is positioned as a determining factor in configuring salary models and scales in organizations. Thus, Bogotá maintains a prominent position in terms of competitive salaries compared to other cities; while Medellín presents salaries 12% lower, Cali 18% less and Barranquilla a difference of -27%.
“When we review what extra-salary elements are taken into accountwe see that the bonus strategy in the labor market focuses on the implementation of short- and long-term incentives. Which encourages and encourages a sustainable commitment that drives the growth and productivity of organizations,” said Rincón.
In this way, Mercer affirms that short-term incentives are essential to align your objectives with those of the company and for example, for commercial positions, compensation usually includes a fixed salary and a variable component that rewards performance in sales, which drives motivation and commitment.
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“Employees in other areas receive bonuses linked to the company’s overall results and their own performance. These incentive schemes, generally applied up to management levels and above, foster an organizational culture performance-oriented, benefiting both the company and its collaborators,” he explained.
Sustainable industries
One of the last points that the researchers highlighted in their report has to do with the sectors of the economy that are providing the best remunerations in the labor market, a point in which they point out that Energy, Chemistry, Life Sciences and Technology occupy the first places in this survey.
Companies
At this point, Rincón indicated that these industries offer attractive salaries by demanding professional profiles with technical knowledge, experience and very specific training, taking advantage of the changes that are being seen in production sources towards more sustainable productions.
“The demand for sustainable energy requires experts who understand the complexities of non-conventional renewable systems. In Life Sciences, research and development requires in-depth knowledge of biology and medicine. Finally, the rapid evolution of the technology sector requires specialists in programming, cybersecurity and data analysis,” they concluded.
That said, those responsible for the report closed by highlighting that the dynamics of the labor market always go hand in hand with the economic moment that nations are experiencing, which is why efforts should be made to generate conditions of confidence among employers, since this will translate into more and better employment.
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