Portugal’s much-hailed ‘economic recovery’ is finally having a positive effect on salaries – bosses’ salaries, that is.
A new study entitled Total Compensation Report 2014 by consulting firm Mercer has shown that while people working high-ranking jobs have seen their salaries increase between 1.14% and 3.31% this year, the working class has suffered pay cuts of between 0.14% and 1.41%.
“The recovery is noticeable in jobs where there is more responsibility and content,” Tiago Borges, market study specialist from Mercer, explains.
He added that it was a “normal tendency” for higher-ranking workers to have their salaries increased, as they were “the most affected” by salary cuts during the crisis.
Borges also said that in previous years, it was easier for companies to pay lower salaries as unemployment was increasing.
Now that it has been dropping continuously for 15 months, companies are no longer able to lower salaries to the same extent, but none of this spells good news for the ‘common Joe’.
“Salary increases are normally directly tied to inflation, which is still at very low levels. However, salaries will most likely accompany inflation so that there isn’t a drop in purchasing power,” Tiago Borges explained.
Going into detail about what makes companies raise salaries, the study names the company’s “financial results” and the “performance of each individual worker” as the main factors.
On the other hand, the “number of years a worker has worked at the company” or the “hierarchy of the worker” are considered the least influential factors.
Additionally, the study found that 22% of companies pay salaries in advance or offer loans to workers who are financially struggling, mostly due to “emergencies”, “hospital bills” and “education”.
And although the percentage dropped compared to previous years – such as in 2012, when it was 27% – most companies are keeping workers’ benefits.
Around 90% of companies offer medical coverage, while 56% allow workers to take more holidays than is obliged by law and 38% grant an additional subsidy for illnesses.
It is also said that 73% of companies plan to keep their staff employed for the rest of this year.
