A few weeks ago, Birches Group partnered with Renato Rovina from RewardsLab in Brazil to conduct a session with the International Comp & Ben Club of the Magellan Network (Cercle Magellan) in France. The session included a brief overview of the Latin America/Caribbean region, and an in-depth look at what’s happening right now in Brazil and the impact on compensation and benefits. Here are some highlights:
- Growth in the region has slowed. Projected GDP growth for 2016 is negative 1.3%. The trend over the last five years has been down for the region, but there are significant variations by country.
- Argentina (-3.4%), Brazil (-4.0%) and Venezuela are all facing economic challenges.
- Inflation is projected at 5.8% for the region in 2016 (excluding Venezuela). Argentina (40%), Brazil (8.9%) and Colombia (8.1%) are the highest in the region, while Chile (3.4%) and Mexico (2.7%) are stable.
- The median total compensation for a Working Level Professional (BG-9) in the region is $55,197. Haiti has the lowest rate ($31,298), while Barbados is the highest ($67,377).
In Brazil, 2016 has been a year of challenges. Political turmoil, inflation, negative GDP growth and record unemployment are all factors causing employers to be conservative with compensation increases. In fact, most collective agreements include increases below the rate of inflation, indicating a good understanding of the crisis from the unions (the majority of employees in Brazil are covered by a collective agreement).
Companies are examining their organizations, streamlining and reducing headcount. In addition, Programa de Proteção ao Emprego (PPE), a program which allows companies to reduce hours in order to preserve jobs, has resulted in 60,000 jobs preserved across 100 employers.
You can download a copy of the full presentation deck here.