Because there is still no regulation for part-time employment in Guatemala, textile businessmen estimate that the country loses between 40 and 70 thousand jobs.
For representatives of the Costume and Textile Commission (Vestex), the high operating and labor costs in Guatemala cause businessmen to send cut pieces to Honduras, El Salvador and Nicaragua to be assembled.
Informality, access to social services and lifelong learning are some of the aspects on which the region's economies must focus in order to improve labor market conditions.
Representatives of the International Labor Organization (ILO) presented in San José, Costa Rica, the report "Working for a brighter future", prepared by the World Commission on the Future of Work, which describes the factors that affect work in the countries of the region.
As reported for the first three months of the year, for the second quarter of 2019 14% of companies in the country expect to increase their payrolls.
Guatemalan employers report moderate hiring plans for the second quarter of 2019, with 14% of employers hoping to increase their workforces, 4% expect a decrease and 82% do not expect changes, reported Manpower.
The Guatemalan exporters' guild is proposing a plan for the creation of 981.000 formal jobs in the next four years to the government by 2020.
The plan is called "Returning on Course to Create Formal Employment," and was developed by the Guatemalan Exporters Association (Agexport). The proposal includes three cross-cutting strategic axes: investment attraction, human talent, infrastructure and business facilitation.
In Guatemala, the debate on the legalization of part-time employment was reactivated, but the regulation, which for years has been promised to be approved, is still not a reality.
The inflexibility of the Guatemalan labor market is an issue of concern to investors, since for years the authorities have been promising to support the necessary changes so that companies can hire staff for the periods they require and not always based on the standard schedule of eight or twelve hours.
Despite the location and the fiscal benefits that in some cases the countries of the region offer, the lack of education of the population will be the main barrier to continue attracting large investments.
The lack of guarantee of finding the competent and sustainable human capital necessary for the proper operation of companies is an issue that negatively influences the attraction of important investments in Central America.
The determination of how much and how the minimum wage should be regulated, something that occasionally seems to be done in an arbitrary manner and for political purposes, continues to be one of the factors that most confront Central American businessmen and governments.
In Costa Rica, a 3% increase in the minimum wage was approved for 2019; in El Salvador, an increase is expected to be discussed, and in Guatemala, the commission in charge of the issue reported that no increases will be made this year.
In the Central American region, the average unemployment rate for those aged between 15 and 24 is estimated to be around 11%, with lack of work experience being the main barrier to accessing the first job.
According to figures from the Central American Observatory of Social Development, Costa Rica and Panama are the countries in the region with the highest rates of youth unemployment, with 27% and 15%, respectively.
For agricultural businessmen, the proposal to change the minimum wage discussed nationwide jeopardizes the jobs and incomes of about 500,000 people working in agriculture.
In the first quarter of next year, 14% of the business sector in Guatemala plans to increase its contracting, mainly in the construction, services and manufacturing sectors.
From the ManPowerGroup report:
Guatemalan employers report positive hiring plans for the next quarter, with 14% of employers expecting to increase their workforces, 4% anticipating a decrease and 82% remaining unchanged, resulting in a Net Employment Trend of +10%.
Although new jobs will emerge, technological changes will have a strong impact in the Central American region, where there is a high proportion of jobs with a high risk of automation.
According to forecasts made by the Inter-American Development Bank (IDB), in 2018 it was estimated that 75% of workers in Guatemala and El Salvador are in high-risk automation jobs.
In Guatemala, the law regulating part-time work has already been reviewed by the Attorney General's Office and awaits the approval of the Council of Ministers.
Although in August 2017, the Morales administration had planned to approve the law before February 2018, the process has been lengthening, and a government agreement must be issued for it to take effect.
In the fourth quarter of the year, 16% of the business sector plans to hire more workers, mainly in the construction, agriculture and services sectors.
From a report by the ManpowerGroup:
Guatemalan employers report optimistic hiring plans for the next quarter, with 16% of employers expecting to increase their workforce, 3% foreseeing a decrease and 81% not anticipating changes, resulting in a Net Employment Outlook of + 13%.
In Guatemala between May 2017 and the same month in 2018, trade and services companies led the generation of new formal jobs, with 11,000 and 10,000 new positions, respectively.
According to figures from the Guatemalan Social Security Institute, the number of contributors in general has not changed significantly, since in May of this year 1,334,527 registered workers were counted, exceeding by just 0.3% the 1,329,656 employees registered up to the fifth month of 2017.
For the third quarter of the year, 10% of companies in Guatemala plan to increase their hirings and 85% believe they will not make any changes.
ManpowerGroup presented the Employment Expectations Survey corresponding to the III Quarter of the year, and highlighted in the results is the fact that 4% of companies consultedforesee that staff reductions will be made in the coming months.