Labour regulation, the high tax burden, and the scarcity of qualified workers are the main obstacles to the growth of Spanish companies compared to others in the major global economies.
This is reflected in the report “The Business Environment and the Private Sector in Spain” presented yesterday by the World Bank, after conducting a series of surveys in recent months among Spanish companies of all sizes and sectors. Especially those in the metallurgical, construction, food, and tourism industries.
The study published by the World Bank identifies the scarcity of workers with adequate training as the main obstacle for Spanish companies, with 35% of the responses. This problem is particularly important in the case of large companies, which suffer more from the shortage of highly qualified employees than medium and small ones.
According to the institution, labour regulation and legal uncertainty in this area are one of the main causes of this problem, even above the training of the workforce. In this regard, the seven weeks of salary that companies must assume, on average, when a dismissal occurs are higher than the five weeks recorded in high-income countries as a whole.
15% of companies have been involved in labour disputes during the last three years, well above the 6% recorded in the rest of the major economies. These trials also take an average of seven months to resolve, 60 days longer, on average, than in countries with a similar income level to Spain.
Norman Loayza, Director of the World Bank’s Global Indicators Group, explains that “the regulatory framework for hiring and firing in Spain makes it difficult for companies to attract talent by offering better salaries to the best-trained workers.”
Tax burdens are the third major concern shown by Spanish business owners consulted by the World Bank. In this section, while major economies report an effective rate of 20% for social security contributions and 17% for Corporation Tax, in Spain companies assume 26% and 24%, respectively. In total, about half of their income ends up in the state coffers.
