Labor Market in Peru 2023-2024

How is the Peruvian Labor Market in 2023 ► How is the Peruvian Talent?

• National employment is projected to grow by 2.4% and formal private employment by 3.2% in 2023. This means that there will be more job opportunities for Peruvians, especially in the formal sector, which offers better working conditions and social benefits.
• However, labor informality remains very high, reaching 70.1% of the economically active population (EAP) in the first quarter of 2023. This implies lower tax collection, greater labor precariousness, and lower productivity. In addition, informality hinders access to social security, health, and education for informal workers and their families.
• In order to reduce informality and promote formal employment, the Government has proposed some guidelines in Agenda 19, which include the regularization of outsourcing, the increase of the minimum wage ( 1.025 Peruvian Soles - 269.47 USD), and the elimination of the perfect suspension of work.
• On the other hand, the Peruvian labor market also offers some competitive advantages for investors, such as a young, diverse, and skilled labor force, especially in the manufacturing sector. Likewise, the Peruvian labor market has adapted to new global trends, such as remote work, sustainability strategies, and diversity and inclusion1. These factors can contribute to improving the reputation and performance of companies operating in the country.

What Industries Benefit Most from Hiring Talent in Peru?

►The banking sector leads the ranking of leading companies in terms of talent retention in 2023. This sector requires professionals with financial, digital, and commercial skills, capable of adapting to regulatory, technological, and market changes.

►The technology sector has experienced tremendous growth and demand from businesses and consumers, especially during the pandemic. This sector needs technically savvy, creative, and innovative professionals who can develop digital solutions for various economic and social sectors.

The adoption of emerging technologies such as artificial intelligence (AI), cloud computing, internet of things (IoT), big data, blockchain and 5G is increasing rapidly, as the leaders in digital transformation are committed to their innovation priorities and continue to generate value at a steady pace. AI is seen as the most important technology to achieve short-term goals.

The demand for storage and backup services is growing significantly, with a strong tendency towards immutability, which allows to protect the information from aggressive attacks such as ransomware. The latency will also play a very relevant role in terms of connectivity, as the users will require faster and more reliable access to data and applications.

►The mass consumption sector, includes companies that produce and distribute goods and services of daily use, such as food, beverages, hygiene, cleaning, etc. This sector demands professionals with management, marketing, logistics, and customer service skills, who can meet the needs and preferences of consumers.

What are the Primary Challenges Facing Peru's Labor Market?

• The high level of informality, affects the quality of employment and the social protection of workers. According to the National Institute of Statistics and Informatics (INEI), the informal employment rate reached 70.5 % in the first quarter of 2023, and it is expected to remain high in the following quarters.
• Some regions have a lack of competitiveness in the labor force, which limits the potential for economic growth and development. According to the World Economic Forum, Peru ranked 87th out of 141 countries in the Global Competitiveness Index 2022.
• The impact of climate change on the labor market, poses risks to the livelihoods and well-being of workers, especially in vulnerable sectors such as agriculture, fishing, and tourism. According to a study by the International Labour Organization (ILO), climate change could cause a loss of 2.4 % of total working hours in Peru by 2030, equivalent to 1.1 million full-time jobs.
• The lack of effective policies and programs to promote formalization, innovation, education, training, and social dialogue in the labor market. According to some experts, the current government’s agenda for labor reform is outdated and detrimental to the sector. They suggest that instead of imposing more rigid regulations and restrictions, the government should foster a more flexible and inclusive labor market that adapts to the changing needs and demands of the economy and society.

In summary, Peru's labor market holds immense potential. Nevertheless, it's crucial to have a comprehensive understanding of the challenges and intricacies within this landscape. If you have any lingering uncertainties, don't hesitate to reach out. Our team of experts in Peru stands ready to provide tailored guidance, ensuring you harness the full spectrum of opportunities it offers.

Contact us today for the insight you need to thrive. we invite you to download the official report of the Peruvian labor market. 

Recommended Report: Labor Report in Peru 2023 - 2024 [Spanish]