Labor reform makes full-time permanent contracts more volatile

In this first year of the labor reform coming into force, the data shows that full-time permanent contracts are more volatile, since in the last 12 months they have gone from accounting for 62% to 42% of the total, representing almost a third less.

3/20/2023

The data shows this, since for example during the month of January of this new 2023, 1,151,747 initial contracts were signed, of which 481,304 were permanent, and this is triple what was registered the previous year in this same period.

But what is striking is that not even 4 out of 10 were full-time, therefore 2022 has been the first year in history, in which this type of contracts represent less than 50% of the total, a figure that shows that the transformation of the labor market is sustained by giving much more weight to part-time contracts.

In this whole situation, a series of considerations must be taken into account, the first is that the partiality between temporary contracts has not increased, it continues to represent six out of ten contracts, but, at the same time, full-time continues to represent 70% of the total.

And the second consideration is that this relative decline in full-time work does not respond to a greater weight of ordinary permanent part-time contracts (they have fallen from 25% to 21%), but to the emergence of discontinuous permanent contracts on the job market.

In this scenario, the rate of permanent full-time contracts recorded the greatest drop from March, which was the month in which the “vacatio legis” of the labor reform to eliminate temporary contracts for work and service ended.

The impact of this modality has been of such magnitude that for some months it has exceeded that of new permanent full-time contracts, which demonstrates the interest of companies in new hiring decisions, especially among temporary employment agencies, which account for 40% of them.

Indefinite contracts

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