The report Salary Evolution 2017-2024 Balearic Islands, prepared by the consultancy ICSA Grupo and PIMEM, places employees of small and medium-sized enterprises in the Balearic Islands in 12th position in terms of salaries, with an average remuneration of €24,161 per year. Although this figure is still 12% lower than the national average, which stands at €27,087, it represents a 2.58% increase compared to the previous year. These figures place workers in the Balearic Islands ahead of only those in the Canary Islands, Castilla y León, Castilla-La Mancha, La Rioja, and Extremadura, but far behind the €29,330 average in Madrid.
In the case of middle management, the Balearic Islands rank fifth, with an average salary of €41,804, representing a 4.4% increase compared to 2023, although still slightly below the national average of €42,177. Meanwhile, executives in the islands rank ninth, with an average salary of €84,287, a 2.6% increase from 2023, but still below the national average of €88,832.
Historical data from 2017 to 2024
From 2017 to 2024, salaried employees in small and medium-sized enterprises in the Balearic Islands have seen their annual remuneration increase from €20,294 to €24,161, representing a growth of 19.05%. Meanwhile, middle management salaries have increased by 12.52%, rising from €37,153 to €41,804, and executive salaries have grown by 14.04% (from €73,911 in 2017 to €84,287 in 2024). However, the average remuneration for these three major categories has not kept pace with inflation, which has risen by 22.20% over the same period. A turning point occurred in 2021, coinciding with the COVID-19 pandemic, when salaries began to rise at a slower rate than the prices of goods and services.
Furthermore, 2021 recorded the only decline in year-on-year salary growth, but by 2023, salaries had begun to surpass pre-pandemic levels.
The need to diversify the economy
PIMEM has highlighted that, although the Balearic Islands remain average in salary terms, their heavy reliance on the service sector poses a risk to maintaining the pace of salary growth. In this regard, the business association insists on the importance of strengthening the primary and industrial sectors to advance towards economic diversification.
Economist Ernest Poveda, director of the study, emphasised that “it is necessary to start thinking about a higher value-added economy and ensuring that innovation plays an increasingly significant role in the creation of new and diverse industries.”
Meanwhile, PIMEM president Jordi Mora has highlighted the role of small and medium-sized enterprises in salary evolution: “If SMEs are capable of showing these numbers, they have earned the right to participate in national agreements on crucial matters such as increases in the minimum wage (SMI) and the reduction of working hours.”
Factors influencing salary growth
One of the issues highlighted in the report is the difficulty in attracting qualified talent due to the lack of infrastructure and housing for executives and workers. Additionally, the report warns of the loss of purchasing power accumulated since 2007 as a result of inflation peaks and various economic crises.
The report also emphasises the importance of adapting salary compensation models. “Linear salary increases should be discarded because, without productivity growth, they only lead to a loss of business competitiveness,” Poveda stated. In this regard, both PIMEM and ICSA Grupo advocate for more flexible and sustainable models, oriented towards objectives that help reduce staff turnover and absenteeism.
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