The increase forecast in the latest Willis Towers Watson report represents a 2 percent improvement from the average increase recorded this year.
According to a report by ECO, with the labour market showing signs of strengthening, workers in the Portuguese private sector are expected to receive average wage increases of 2.2 percent in 2022, which is foreseen in the “Salary Budget Planning Report” by Willis Towers Watson, in which 276 national companies participated.
The projected increase represents an improvement of 2 percent compared to the average increase registered this year and, with inflation at 1.2 percent projected for 2022, this would result in a real term increase of one percent.
The number of companies that plan to completely freeze wages is expected to drop from 9.4 percent this year to 1.9 percent in 2022.
“Employers always face big challenges when it comes to salaries,” says Sandra Bento, talent and reward associate director of Willis Towers Watson, in a statement. “Despite the increases resulting from some economic recovery as the threat from Covid diminishes, companies need to continue to effectively manage their fixed costs during this recovery process. Some sectors are doing better than others, but the prospects in general are encouraging”, she said.
The average increases in 2022 are expected to be higher in the hitech, fintech and manufacturing sectors (increase of 2.4 percent), consumer products and retail (2.3 percent) and pharmaceuticals and health sciences (2.2 percent). Financial services workers are expected to be those to see the smallest increase (2.1 percent).
Motivating and retaining their best talent is, for Willis Towers Watson, the biggest challenge facing Portuguese companies, “rewarding the best performers with a salary increase 2.7 times higher than that granted to those who obtained lower performance ratings”.
“Attracting and retaining employees remains a major challenge for employers, although today the job market looks optimistic and prospects are better than many expected. Companies need to present a solid value proposition to their employees, backed by comprehensive total compensation programmes. In addition to competitive salaries, companies should focus their spending on a diverse set of health, well-being and career programmes to boost the level of commitment of their employees”, says Sandra Bento.
In terms of hiring, 26 percent of companies plan to recruit more employees in the next 12 months, while 10 percent plan to reduce the current number of members of their team. The available positions are mainly in the sales area, although engineering (36 percent), information technology (36 percent) and qualified technical functions (33 percent) are also critical functions for Portuguese companies.