In Portugal, the expected increase in salaries for 2023 is higher than the average increase of 3.2% in salary budgets allocated in 2022. Half of the companies stated that their salary budget is now higher than they expected, according to the latest “Salary Budget Planning Report” by WTW and reported by ECO.
“Employers face tough choices as they try to control costs in a tough economic climate, but are also struggling to keep their salary levels attractive. The pressure of inflation and a competitive labour market are forcing many to increase their salary budgets, in order to retain and attract the best professionals”, said Sandra Bento, associate director of WTW Portugal.
“Organisations that succeed will have a clearer rewards strategy and an understanding of what employees are really looking for,” she adds in a statement.
The main reason that justifies the decision to increase wages is the concern with inflation (86%), followed by the attempt to respond to a more demanding labour market (44%) and the desire to, with measure, achieve better talent retention (30%).
Among the Portuguese companies that participated in the consultant's study, around a quarter (27%) still believe that the prospects for their businesses are better than they had anticipated, while 46% state that they are in line with expectations. In addition, 17% plan to increase the number of permanent employees in the next 12 months.
When it comes to hiring forecasts, nearly half (52%) of employers plan to recruit new professionals for sales roles in the next 12 months, while 44% are hiring for IT roles and 39% intend to recruit more engineering professionals.
“There are signs of optimism across companies when it comes to hiring plans, particularly for certain roles like sales and IT. While pay is important, there are many other factors involved in engagement and success in the workplace, and employers need to provide a compelling overall experience for their employees,” comments Sandra Bento.
The WTW “Salary Budget Planning Report” study was conducted in November 2022 and received 2,908 sets of responses from companies in 159 countries around the world. In Portugal, 403 organisations responded.