Reducing hours and withholding wages is not very sustainable in Panama

The pandemic marked before and after in work environment in Panama and in the worldespecially in boosting the numbers in some sectors such as remote work and reduced working hours.

However, this work dynamic does not seem to convince employers, according to the latest study entitled Reduced working hours of the Konzert where HR experts were consulted on sustainability reduction of working hours and retention of the same wages.

62% of specialists in Human resources consulted in Panama, believes that it is possible to reduce the working day and keep the same wages, but this trend is reduced by 19 percentage points compared to 2022, where 81% of specialists believed it was feasible.

For those who were consulted, the main difficulties for this work model are the reduction of productivity and the lack of time for the execution of tasks by the collaborators.

Although Panama today has some provisions that allow flexibilization of the working day, this must be approved in an agreed manner between the company and the associate. Only in special cases and cases of force majeure to ensure business continuity, such as happened during the Covid-19 pandemic and due to the crisis the state recently went through due to Law 406, these types of measures are used.

Panama’s results are not far from those of the region, Peru is the country where human resources experts consider it more sustainable to reduce the working day and keep the same wages with 73%, followed by Chile with 67%; Argentina with 66%, Panama with 62% and finally Ecuador, where only 25% believe it is feasible.

Peru, like Argentina, believes that the main difficulty of shortening the working day is its implementation without reducing wages.

Panama and Ecuador They also share a common difficulty, with HR professionals finding that lack of time to complete tasks would be their main difficulty. Panama also adds another important difficulty such as falling productivity.

While in Chile, the first prominent problem is the increase in labor costs.

The main benefits of reducing hours according to HR experts are a better work-life balance; time optimization; increasing talent motivation; reduction of absenteeism; increase in physical and mental rest; productivity growth; reducing stress levels and reducing talent turnover and resignations.

In the same order, they list the main difficulties, among which they stand out: lack of time to complete tasks; decrease in productivity (63%); implement without reducing wages; preserve the structure of the organization; increasing labor costs and decreasing wages.

Panama
Panama has a 48-hour work week. However, there is Executive Order 101 July 2020 which allows the implementation of some measures to make the working day more flexible as long as the parties agree; and Article 159 of the Labor Act which indicates that, in cases of economic crisis, fortuitous event or force majeure duly confirmed by the administrative authorities for work, it will be allowed, temporarily, to change or reduce the working hours or the weekly working day.

60% of Panamanian HR professionals consider a possible reduction in working hours in their organizations.

The preference for the possibility of implementing a reduction in working hours in Panama shows a decline compared to the previous study, while in 2022 62% of HR professionals believed it was possible, this year 60% said it was possible. considered, 2 points below last year.

Although the majority believes that it is possible to implement a reduction in working hours, 59% of specialists in the country do not plan to implement it.

Of those who are thinking about its implementation, 83% plan to reduce the number of working hours per day, while 17% state that working days will be reduced to 4.

In the previous version of the study from 2022, 100% intended to reduce the number of working hours per day. In contrast, this year we see that a small percentage (17%) of employers are already thinking about reducing working days to 4.

Although 59% do not plan to reduce working hours, 88% of specialists in Human Resources of Panama believes that companies with part-time working hours are more attractive to new talent, compared to 12% who do not think so.