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The rotation has caused the reduction of salary costs during the pandemic

While in the period prior to the health crisis the labor dynamism showed a slight deceleration, the health crisis of 2020 and the containment measures adopted drastically slowed it down. This is what emerges from the fourteenth edition of the report of the Labor Dynamism Index prepared annually by Cegid, to analyze the movements produced in the labor force in Spain that do not imply the creation or destruction of jobs.

Compared to the last report presented in October 2021, the «Cegid Meta4 IDL» indicator of labor dynamism begins to recover slowly, reaching in the first three months of 2022, the same levels registered before the crisis, standing at almost 5%.

On the other hand, the data on the variation in the size of the almost 800 companies analyzed show that neither the crisis nor the slow economic recovery After the months with tougher measures, they have had a medium-term effect on organizational size, if we do not consider the temporary employment regulation files. yes they have had it about template turnover analyzed by the IDL showing that the indicator reacts quickly to variations in the economic cycle.

Hiring and terminations begin to recover

The report also shows that while in the midst of the health crisis, both hiring and dismissals experienced a sharp decline due to confinement and the various measures adopted, as of July 2020 these levels began to recover, maintaining, however, notably by below the values ​​recorded before the pandemic.

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It is interesting to note how, while the patterns of job creation and destruction remain stable over time, the rotations measured by the IDL seem to reflect the movements of the economic cycle. An aspect that suggests that the accelerations and decelerations of the situation have more effect on rotations than on the effective creation and destruction of jobs.

Period of salary moderation

Understanding the evolution of the wage bill with respect to the rest of the market is key to Talent management. In this sense, another interesting fact that the study shows is that the changes in wages, despite being less evident than those experienced by the IDL, show an exceptional period in the labor market. If before the pandemic wages showed a growing pattern, the median salary grew between 2018 and 2019 from about 23,000 euros up to almost 27,000 euros gross per yearin March

2022 this is approximately 25,795 euros with a distribution skewed to the left. This would indicate that in the companies analyzed there would be many workers with rather low incomes of less than 18,000 euros gross per year and few relatively high salaries, less than 10% would receive 51,405 euros gross per year or more.

According to Marta Elvira, professor at IESE Business School, and director of IDL research since its inception: “Having real data on turnover and salaries for 4 years allows us to investigate in detail the evolution in the behavior of a notable sample of companies before and after the health crisis. An important piece of information to consider in future actions is that during the pandemic period, the median wages of new hires have been significantly lower than those of dismissals.”

For Patricia Santoni, general manager of Cegid Meta4 for Iberia, “After experiencing a crisis as serious as the one experienced by COVID-19, it is essential to have first-hand information that helps organizations analyze the behavior of the labor market to ensure strategic decision-making. The Cegid Meta4 IDL labor dynamism indicator is a very useful tool that allows HR Directors to have very valuable information about the current context and consequently design the best policies for the future».

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