10% of Peruvian multinationals would prefer to pay their workers in U.S.dollars

RIO DE JANEIRO, BRAZIL – It is nothing new for Peruvians to talk about the devaluation of the official currency, the sol, against strong currencies such as the dollar and the euro. Following the devaluation, many companies have been forced to close or reduce personnel, generating a higher poverty and unemployment rate in the country.

The price of essential household goods has increased, and the cost of fuel and useful tools for the development of their daily tasks.

However, a study shows that 10% of large companies headquartered in Peru would change the benefits provided to their workers from soles to dollars.

Read also: Check out our coverage on Peru

Employers have taken several risky measures since a large part of the human resources have opted to migrate to different companies that offer more significant benefits. If companies are thinking of changing salaries from soles to dollars, how sustainable is this decision, considering the unstable situation in which the country is immersed?

STUDIES

Following this unknown and the uncertainty of the companies, a study was carried out with more than 50 multinationals with a presence and headquarters in Peru, mainly in areas of high impact on the economy such as mining, energy, financial services, technology, among others.

The main result was that 96% of the companies are not making any changes to their compensation packages; however, 4% have made adjustments for their top executives and managers, both in base salary and bonuses and commissions.

Also, on the question of whether they would change some compensation concepts to dollars by 2022, it was found that 10% of large companies do plan to apply this change.

Among the main actions being evaluated (to change) are: to grant a bonus at the end of the year, to use the change to dollars in some concepts without distinction of career level, to apply currency change in bonuses or base salary for executives and key personnel. Likewise, create a fund to stabilize compensation in the event of a potential drop.

“That 10% told us that if the dollar stays above four soles, it is likely that they will begin to make some payments, whether performance bonuses or other items, in U.S. currency. Although it is widespread for executives to earn in dollars in Argentina and Venezuela, the reality in Peru is different for now,” says specialist Gabriel Regalado, CEO of the consulting firm Mercer Perú.

Finally, the specialist affirms that the devaluation of the national currency makes it more attractive to attract foreign talent since offers in other countries are made in dollars. What would happen is that foreign professionals would ask to move to other countries. This would affect the company and the level of competition of professionals in the country.