Semi-annually until 2023 and quarterly since 2024, Grant Thornton interviews around 10,000 mid-market business leaders, gathering data on companies' perceptions of overall economic optimism, salaries, and what factors will drive companies and which ones will limit their growth over the next 12 months.
From the second half of 2023, in addition to the base questions asked to executives in all countries, the IBR includes three specific questions for the Argentine mid-market. These refer to issues specific to the Argentine context and inquire about the most relevant factors when making executive decisions, talent attraction and retention strategies, and communication with collaborators and clients.
When asked about the economic factor that most significantly impacts decision-making, 62% agree that the inflation rate is the main cause that influences decisions. Although it represents a 4% decrease compared to the previous quarter (68%), it is still 10 percentage points (p.p.) above the first wave in the second half of 2023 (50%).
16% of mid-market executives find the exchange rate the greatest influence. After a 15pp drop from the second half of 2023 (27%) to the first quarter of 2024 (12%), in the second quarter of 2024 this factor influenced 15% of executives (+3pp).
The third economic factor that most impacts decision-making is financial interest, being pointed out by 13% of respondents and reaching its maximum, after two quarters of decline: 11% in the second half of 2023, 8% in the first quarter of 2024 and 5% in the second.
The rate of salary increases required in their industry was reported by 4% of mid-market executives. This number represents a 50% decrease compared to the previous quarter, when 8% of respondents considered it an impact factor. However, it has not yet reached the minimum reported in the first quarter of 2024 (3%). Finally, the target profit margin is taken into account by 3%, maintaining the trend of the second half of 2024.
Keeping employees and clients motivated and encouraged in a context of economic uncertainty is key to business success. Therefore, the IBR asks executives what the most relevant corporate message is.
The latest data reveal that, unlike the previous quarter, a large part of the executives (36%) finds the main message in the collective value of the teams and the know-how of the collaborators (+8pp). While the company's commercial success went from being the most delivered message in the second quarter of 2024 (40%) to being the third most chosen by executives (-18pp).
The firm's financial stability is the second most relevant corporate message (23%), reaching the same level as in the second half of 2023 after two quarters of decline (17% and 12%). The experience and know-how of the leaders is in fourth place with 17%, dropping 3pp compared to the second quarter of 2024 (20%), but maintaining a higher level than the second half of 2023 and the first quarter of 2024 (16%).
Attracting and retaining talent is a critical component to the success of a business and the growth of a company. Continuous investment in people strengthens growth within the mid-market in a sustainable way. Companies use different strategies that range from economic to emotional salary and the IBR reveals which are the most implemented in the Argentine mid-market.
More than half (53%) offer training and professional development to their collaborators (-4pp) and 45% offer salaries higher than market rates (+9pp). Additional leave/time off (12%), benefits programmes (10%), and performance-related monetary rewards (22%) have been the actions that business leaders have stopped implementing the most, suffering drops of 13, 9 and 7 percent points respectively. Improvements in health and mental health programmes remain constant in the 16% of companies that carry them out.
Expectations and limitations to business growth, future investment intentions and expected salary changes are other variables that the IBR measures and allow us to know the perspective that the middle market has for the next 12 months.
All these results are in line with the optimism index in Argentina, which is at 65% and suffered a drop of 4pp after constant growth since the first quarter of 2023, when it hit a historical minimum of 24%. Learn more about national, regional and global mid-market trends in our International Business Report.
Download Grant Thornton's International Business Report (IBR) and learn more about the trends in the Argentine, Latin American and global mid-markets.
