The increases will average 4.4%, when the inflation forecast is around 5.6%, and in 46% of companies they will be below inflation, according to KPMG
94.12% of Spanish companies plan to raise wages in 2023, although they will do so below inflation, with an average increase of 4.4%, according to the study on ‘Salary Trends and Salary Increases 2023’, conducted between September and October by KPMG Abogados. This means that the percentage of companies that will increase salaries will be higher than this year (91.8% according to the KPMG survey), but the increase will be five-tenths lower than this year. In addition, in 46% of companies the salary increase for next year will be below inflation, while 36.5% will adjust to what their applicable collective agreement stipulates. The Bank of Spain’s inflation forecast for next year is 5.6%. Based on the median salary, the increase for 2023, predicted by the companies surveyed, is 4%.
For Mónica San Nicolás, Director of General Compensation, Directors and Managers at KPMG Abogados, “the proposed increases for 2023 are conservative as they are mostly below the increase in CPI. This indicates that companies are cautious and hope that the current inflation situation is temporary.
In fact, according to KPMG, Spanish companies maintain a certain optimism, albeit in moderation. Specifically, 84% of companies believe that the situation will be the same or better in 2023, while 16% of those surveyed are more pessimistic about the future.
But wage increases are not the main compensation challenge for Spanish companies. One in four companies see talent attraction and retention as the top HR issue in 2023, and 26% of respondents see it as their top compensation challenge.
“Attracting and retaining talent is already a sustainability issue for companies. Rotation occurs mainly at the mid-levels of the organization, in key groups such as middle managers and supervisors, and at significant percentages that can affect operations and the business. We are facing a paradigm shift in people management,” emphasizes San Nicolás.
According to KPMG, the average turnover in companies in 2022 was 12.4% of employees, mainly supervisors/technicians (9.9%), administrative/operators (8.1%) and sales personnel (7.6%). The sectors with the highest turnover are tourism and leisure (37%), construction and infrastructure (23%) and telecommunications (15%).
According to the companies surveyed by the company, the main reasons explaining these revenue levels are the shortage of talent (29.11%) and the lack of salary competitiveness compared to the market (26.58%).
On the other hand, salary structures are becoming tighter and there are fewer and fewer pay differences in the scale of work. The companies agree that there is a problem of band narrowing, especially in the middle management. As for the most common long-term incentives, these are cash bonuses subject to targets. Middle managers and senior professionals are present in 14% of companies.
The KPMG Abogados ‘Remuneration Trends and Salary Increases 2023’ study was conducted through a survey of 85 companies from different industries, with a number of employees ranging from less than 50 to more than 2,000 and a turnover of less than EUR 100 million to more than 5,000 million euros.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
