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Only two out of ten companies believe that the labor reform has positive effects

Date: June 3, 2023 Time: 23:27:02

The labor reform approved at the end of 2021, after a long negotiation that gathered the support of unions and employers, did not take full effect until the last day of March 2022, so it has just completed its first year. The Government has stressed on different occasions that the repeal of most of the changes introduced by the Executive of Mariano Rajoy has meant a paradigm shift in the labor market and this is also appreciated by study centers and employers. However, not all of them share the assessment of success expressed by the Ministry of Inclusion, Social Security and Migrations and the Ministry of Labor and Social Economy.

According to the survey carried out this March by Barely 18% consider that the effects have been positive or very positive, while detractors reach 40%. Two out of ten companies have a very negative opinion of the standard, while that of another two is negative. Although, a relevant percentage of firms are indifferent to the changes introduced by the law, up to 43% of them. This score does not value substantially based on the size of the companies, although the negative impact decreases to 43% in the case of workforces with fewer than 50 workers.

However, these views do not translate evenly into their prospects for employment and, specifically, hiring. The job announcements platform has compiled the impressions of the Human Resources managers or hiring decision makers of each of these companies, who show a slight pessimism regarding the evolution of employment in the short and medium term. Looking ahead to the next six months, 54% of companies think that employment will be maintained, while another 34% expect that it will worsen -a percentage that rises to 38% in the case of SMEs- and only 13% Hope it gets better nationally.

The first-person perspective of these companies does not present important differences for the short and medium term. 40% of the companies surveyed plan to add new profiles to their workforces before the fourth quarter, 51% estimate that they will maintain the current composition and only 9% will consider reducing it by September. Although their forecasts are more positive a year from now, when despite the uncertainty surrounding the evolution of prices and the conflict in Ukraine, one in two Human Resources managers will increase their hiring and only 7% believe you’ll have to cut back by then.

34% have indicated the increase in costs or the fact of having discontinuous permanent staff as factors that have altered their recruitment plan. In addition, it stands out that one in ten companies has opted for subcontracting to cover personnel needs, while another 16% of Human Resources departments affirm that they have had to modify their selection processes or allocate more resources to find labor, a fact that has occurred especially in sectors with little labor such as construction or restoration.

The average labor cost per worker, which takes salary and contributions into account, rose 4.2% in the last four months of 2022, adding up to eight consecutive quarters of increases. After the labor reform extends the business quota for fixed-term contracts of less than 30 days and the first part of the pension reform introduced the Intergenerational Equity Mechanism (MEI), with the aim of feeding the reserve fund of the Social Security that will begin to be used from 2032 to cover the pensions of the ‘babyboomers’ who will access retirement in the next decade. Now, in the second part of the reform, it has been decided to double the MEI to 1.2% and the companies will take over most of it.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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