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Before the pandemic, it was much more difficult for a country manager of a multinational in Argentina to explain to its parent company why salary updates should be made outside of what was budgeted in October of the previous year, when it was beginning to be projected year. Words like inflation, economic uncertainty, volatility and currency depreciation could be much more foreign to an executive sitting in a global position than they are today.
Now, in this post-Covid-19 era, and in the midst of the war in Europe, increases in prices and in the cost of living are not new for foreign capital companies operating in the country. For them, today it is easier to understand the situation in Argentina, although the scenario and the causes are very different.
Thus, quarterly adjustments became common currency in Argentina. Companies that grant only two increases a year fell behind against inflation, despite the fact that those that have the possibility of giving between four and five increases also run behind.
But of course, how sustainable is it for a company to sustain this rate of increase? In this framework, many firms opt for other strategies to protect the salary of executives. Increasingly, for those cases that can, a part of the salary is granted in dollars, although, according to consultants in the sector, in general it does not exceed 50 percent of income. Meanwhile, another tool to prevent the salary from being liquefied is to give the bonus in foreign currency.
To give a specific example, in the case of Los Grobo, one of the strategies to take care of the income of the executives was to advance 50 percent of the target bonus in August, which is usually delivered in September. `We are constantly doing spot monitoring with the consultants, and we zoom in on the Systems and Commercial areas, where we seek to compare with peer companies,` says Sandro Cosentino, the company's head of Human Resources, who also acknowledges that among the professionals of HR, the issue of compensation is at the top of mind in all local and international companies. In the agricultural firm, at the beginning of the year an increase of 53 percent was budgeted, which was later increased to 60 percent. `And we are going to have to modify this again, taking into account that the staff within the agreement is also pointing upwards. For example, in the Chemicals union they reopened the parity and it was set at 72 percent. Thus, there is an overlap, so we also have to increase the salary outside the agreement`, explains the head of HR at Los Grobo. In this way, so far the firm has given increases in two tranches, although a third is already stipulated in October and the fourth in January, since the fiscal year closes in June. → article published in the Printed Edition No. 345 of the Apertura magazine (Editorial El Cronista)
Automatic translation from spanish.