The labor market reports a structural change, as fewer and fewer people are being paid a fixed salary for their work, while at the same time the number of employees earning per project is increasing.
Although the trend has been reported globally for several years, the pandemic accelerated this process, as the economic crisis generated by the Covid-19 outbreak destroyed thousands of formal jobs.
Due to the precariousness of the English language, in recent years’ companies in the Contact Center & BPO sector have decided to close thousands of jobs in the region and relocate their investments to other markets where they have no difficulty in recruiting qualified personnel.
Reports at a global level show that the command of English is one of the weaknesses at a Central American level.
Faced with the sudden change that the new normal generated in companies, employees are challenged to increase their skills to work remotely, adapt to more flexible contracts and refine their technological skills and cognitive qualities.
Telecommuting has become an everyday occurrence among companies in the region, which have had to adjust to the restrictions imposed by governments due to the outbreak of covid-19.
In the context of the health and economic crisis in the country, some 54% of the country's companies have suspended work due to lack of market demand.
The results of a survey carried out by the Superior Council of Private Enterprise (COSEP) and the International Labor Organization (ILO), indicate that in this scenario of economic contraction, in the Nicaraguan market 33% of the companies surveyed have had to lay off workers and there are 40% who are also thinking of laying off workers.
Eliminating "tax harassment", suspending threatening messages to the private sector, such as lifting bank secrecy, and stopping persecuting the formal employer is part of what Costa Rican entrepreneurs are proposing to generate more jobs in the next two years.
In Costa Rica, the business sector presented the Alvarado administration with a proposal of 113 actions to generate new jobs in the next two years.
Given the threat of a deepening economic recession in the country, resulting from the outbreak of covid-19, it is estimated that by the end of the year the open unemployment rate could rise to 9.2%.
In the context of the health crisis, an increase in poverty levels will also be reported, and the GDP per capita indicator will decrease, explains the "Informe de Coyuntura, Abril 2020", prepared by the Nicaraguan Foundation for Economic and Social Development (Funides).
Businessmen in the industrial sector in Nicaragua say that since the tax reform was implemented in the first quarter of the year, employment has fallen between 30% and 35%.
On February 27, 2019 was approved the amendment to the Law of Tax Concertation, which consists of raising from 1% to 2% income tax for medium enterprises with higher income. Another of the measures contemplated by the reform is to raise the income tax of large taxpayers from 1% to 3%.
In recent years, the sector in Guatemala has lost nearly 30,000 jobs, because the high costs resulting from having one of the highest minimum wages in the region, makes it more profitable only to export raw materials, rather than making them in the country.
Vestex figures show that in recent years several jobs have been lost in the sector, given that between 2006 and 2018 the industry lost a considerable number of jobs, going from 82,109 to 53,636 places, equivalent to a 35% decrease.
The decline in the number of companies in Nicaragua's free trade zones partly explains the loss of nearly 1,700 jobs in the first two months of the year.
Figures from the Central Bank of Nicaragua (BCN) show that between December 2018 and February 2019, the number of workers decreased by 1,697, from 125,550 to 123,853.
The number of companies in free trade zones also fell at the beginning of the year, from 194 in December 2018 to 187 in February 2019.
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.
A drastic fall in productive activity, outflows of investments and the disappearance of thousands of formal jobs are some of the consequences a year after the political and economic crisis in Nicaragua.
In March 2018, CentralAmericaData reported the figures that reflected the economic boom that Nicaragua was experiencing: formal employment grew at a year-on-year rate of close to 3%, economic activity each month recorded year-on-year growth rates of between 4% and 5%, while consumption and imports increased. Only a month later, on Friday, April 19, a series of events occurred that determined a radical change in the trend observed until then. The announcement of the reform of the Nicaraguan Social Security Institute triggered a social, political and economic crisis that the country is suffering so far.
In accordance with the decreases reported last year, in February 2019 there were 755,908 social security workers, 17% less than in the same month of 2018.
The reduction in the number of workers registered with the Nicaraguan Institute of Social Security (INSS) is caused by the behavior of the employment level in the activities of commerce, construction, finance and transport, storage and communications, reported the Central Bank of Nicaragua (BCN).
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.
Between December 2017 and the same month last year, the number of workers enrolled in Social Security fell 17%, because of the impact of the crisis affecting the country since April last year.
The latest report from the Central Bank of Nicaragua (BCN) details that between the last month of 2017 and December last year, the number of workers enrolled in Social Security went from 913,797 to 755,874, equivalent to a 17% decline.
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.