An employee with a permanent contract now has twice as much chance of ending up unemployed than before the employment reform

One of the consequences of the avalanche of signatures permanent contracts With the introduction of labor reform penalizing the use of temporary figures, companies and employers are looking for formulas to be able to adjust the size of their molds and adapt them to seasonal periods depending on the greater or lesser need for labour. location. There is a strong rebound in permanent contract terminations during the probationary period, which increased by more than 600% in 2022, going from 75,000 layoffs in 2021 to more than half a million recorded last year.

In addition, and according to the figures recorded by the analysis services of the main employment companies in the country, the average duration of the permanent contract in its various versions has decreased to a minimum during the past fifteen years, which indicates an increase in the levels of rotation function The constant that nicely resembles the historical volumes of contract volatility that got provisional numbers in the years after the PP labor reform of 2012 was largely repealed by the law the government has now passed a year and a half ago.

Specifically, the effect of permanent job losses “through the back door” is a significant reduction in the average duration of new firms. According to a recent study of AdeccoAll contracts, including temporary and permanent, averaged 51 days in the first quarter of the year. It is the lowest duration since 2006.

Permanent contract that ends with unemployment

Specifically, this reading of how the labor market has adapted to the difficulties in matching its needs to the usual temporary contract is one of the main analyzes that the study services are trying to reach in order to understand the true impact of the new regulations. at recent days , Bank of Spain It revealed a striking fact: in the past year the amount of permanent contracts that have been destroyed and ended up in unemployment has doubled.

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At first, the only explanation for the data might be that more permanent contracts were signed than before the pandemic, which is why more contracts end up in rolls when destroyed. September. The Superintendent points out in his annual report in the section where he gives a first equilibrium account of the labor reform that time is needed for the effects of the new reform to be fully reflected in the various economic variables and for the distinction of causation and structural effects.

However, in the first survey, the Bank of Spain also noted signs of increased labor turnover, especially among those with permanent contract employment. Specifically, it reaches this conclusion from the numbers it reveals Termination rates by type of contract registered in our country over the past year, which was reduced in 2022 to 0.56% from an average of 0.66% recorded in the period from 2015 to 2019.

As they explained to ABC from the supervisor, these prices are defined as “the result between monthly drawdowns by contract type and affiliates’ ‘inventory’ in each month for each contract type.” Thus, as casualties are published in terms of daily averages, the rates can be interpreted as Daily percentage of associates who lose their jobs (or become inactive) depending on your contract type.

Here, the most relevant observation emerges when analyzing discharge rates. Specifically, permanent contracts that were destroyed and moved directly to unemployment doubled in the covered period (2022 compared to the 2015 to 2019 average), starting in 0.14% to 0.26%. At the same time, the incidence of storms occurring in this circumstance was reduced from 1.82% to 1.77%. The economist also referred to this method Javier SantacruzThese percentages indicate a high turnover of contracts when they are at rates between 1.5% and 2%.

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“Although the most aggregated data indicates a decrease in the labor turnover rate in our country throughout 2022, when a more careful analysis is carried out by type of contract, it can be seen that during this period, there has been a significant increase in turnover rates. Exit towards unemployment from permanent jobs”explains the Bank of Spain.

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