Extending vacations will raise payroll costs by 2%, they forecast

The cost of labor will increase 2% once the reform on “decent vacations” enters into force, said Alberto Alesi, director of ManpowerGroup for Mexico, Central America and the Caribbean, after pointing out that it was essential for Mexico to review its legislation on the matter, since Even Latin American countries have had 30-day vacation periods for 50 years.

The executive maintained that the costs that employers must assume will take an average of a year and a half to reach equilibrium; “It is a fact that (the reform) is approved, we see that all the parties in Congress are in favor of this increase from 6 to 12 days of progressive vacation, accumulated and with pay, which will make it 2% more expensive the total cost of labor, that in a general way; but (the approval) we see it well because this will help a lot to improve productivity, ”he explained.

It is a reality that workers are currently looking for sustainable jobs, that agree with their values, that have belonging, and “part of this is definitely a function of improving that sense of belonging, in the case of Mexico going from 6 to 12 would seem like a lot, but if we review Latin American countries for more than 50 years, they have 20 or 30 days of vacation,” he said.

He explained that it will depend on the sector or size of the company as to whether there is a greater impact or not, especially in small and medium-sized companies that take a little longer to adapt to legislative changes; “We would have to see how its implementation unfolds. If it comes into force in January, it is important to monitor the amount of employment registered with the IMSS and whether this had an impact on formal hiring. As we know from the pandemic, informality increased.”

Alesi exemplified that in the technology sector that has profitability levels of up to 60%, then 2% of the cost for vacations means nothing; but in those that cannot absorb the entire cost, “then we could see an impact on final prices.”

Mexico is one of the countries with one of the shortest vacation periods guaranteed by law and, in fact, after the reform it will still be behind the 18-day term recommended by the International Labor Organization (ILO).

Alesi, who was accompanied by the managers of the ManpowerGrouup company brands: Manpower, Talent Solution and Experis TI, presented the new business strategy focused on specialized talent, since after the outsourcing reform, the different business areas suffered a strong impact.

pilar.martinez@eleconomista.mx