View from the Ground
Colombia’s economy is forecast to grow by 2.4% in 2019. However, the economy and the employment market are currently facing big challenges, including external factors such as the global economy, the geopolitical landscape and the oil industry. The Government must overcome these by enacting measures such as undertaking a fiscal adjustment, promoting export diversification, developing mechanisms to protect oil wealth, addressing social tensions and promoting necessary reforms to the economy. Unemployment recently returned to two figures, the main explanation being a failure to create new jobs, in part due to poor productivity and a lack of investment. The productivity challenge can be tackled by improving the training of skilled workers.
Luis Fernando Martins, Managing Director, Hays Chile & Colombia
Key Skills in Demand
- Sales Managers
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- Plant/Operations Directors
- Developers (Front & Back End)
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The Colombian economy picked up in 2018, growing by 2.9%. In the medium term, the recovery from the sharp fall in oil prices in 2015-16 is forecast to strengthen, with the value of fuel exports increasing and investment in the fuel sector picking up. Labour market conditions are also expected to follow suit and improve, despite unemployment continuing to rise, reaching 9.1% in 2018, as the drag from lower oil prices continued to feed through in continued labour shedding.
The positive outlook for Colombia’s economy is driven in part by expectations that recent structural reforms aimed at promoting economic diversification and productivity will start to have a significant impact.
Payroll tax cuts and improvements in educational attainment have caused the informal labour market, in which employees work for unregistered firms, to shrink in the last decade. However, over 60% of workers remain in the informal sector, restricting the rate at which productivity increases and the economy expands.