2021, the year after the economic shutdown caused by Covid-19, burst with a widespread increase in prices, ending with an unusually high inflation of 6.5%, much higher than what we were used to in recent decades.
The core inflation, which is obtained after deducting the increase in energy and unprocessed food prices, stood at 2.1%. The increase in energy prices and the shock in the transport of goods and supplies have only aggravated the problem. No international organization agrees on whether this increase in prices is a one-off effect of the economic acceleration after the pandemic shutdown or whether it is a more structural effect. The Spanish Executive admits that the inflation rate is "high", although it expects it to be corrected throughout 2022.
In the business world, this inflationary rebound has caused a dilemma on how to face salary increases in January of this year. The consulting firm KPMG conducted a study at the end of last year asking companies how they see the situation and what part of this reality they are going to transfer to salaries. Their survey on salary increases and compensation trends 2022 interviewed 44 companies from various sectors, number of employees and turnover.
Regarding their perception of reality, companies maintain optimism because the vast majority (93.2%) believe that 2022 will be the same or better than the previous year practically equally. Only 6.8% of those surveyed think that the year will be worse than 2021.
88.37% of them expect to make salary increases, this figure being significantly higher than 70.45% in 2021. These increases will be around 2.0%, with a considerable increase compared to the previous year (60%), which will not prevent workers from losing purchasing power. This intention expressed by the businessmen surveyed by KPMG coincides with the salary increase that civil servants will experience in 2022.
Collective agreements reflect an average increase of 1.5%
This obligation to update salaries at the beginning of the year obliges companies that have established it in their collective agreement. As La Vanguardia reports, the average salary increase agreed in collective agreements was 1.47%, which means the lowest salary increase in the last four years, just when inflation is at record levels in three decades.
According to data published by the Ministry of Labor on collective agreements, only 15% of workers in Spain have a salary increase linked to the CPI.