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Thanks to the labor reform, one in three contracts is already indefinite.

The labor reform recently approved is changing the Spanish contracting market in a single blow.

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Thanks to the labor reform, one in three contracts is already indefinite.

The labor reform recently approved is changing the Spanish contracting market in a single blow. It is happening even faster than we expected. According to Randstad Human Resources, this Thursday's report shows that permanent contracts are growing at a faster rate than temporary contracts.

Since the beginning of 2022, the weight of permanent contracts has been increasing steadily: it was 13% in January, 21.9% in February, and close to half in April, when labor reform took effect. However, it did moderate slightly in May. In May, one third of all contracts had been signed was indefinite (32%) whereas it was just one in ten in the same time last year.

Valentin Bote, Randstad Research director, said, "We are verifying that the entry into effect of the labor reform has positive results for labor market,". He praised the fact that employers can cover the same needs using another contract format so contracts of longer duration are possible than in previous years. Bote stated that his prediction is that companies will resort to the fixed-term discontinuous contract in order to meet temporary needs in certain sectors and activities, as well as the current summer campaign.

Agriculture saw the greatest growth, at 368.5%. Construction was next with 286.4%. Services sector (213.3%) -at the top in terms of volume of firms: over 1.8 million- and industry (126.1%) are already showing more moderate growth.

The hotel industry, which has 535,320 contracts, is the sector with the highest number of permanent contracts. It also experienced the greatest economic activity growth (587.1%). Trade (351,676 and an increase 164.5%) are the more discrete figures. Construction (230,328, 286.4%), and primary sector (240.558 and 368.5%) are also included. Administrative and auxiliary activities (205.923 and 212.7%) are less visible.

The indefinite contracts with young people aged under 25 years were the most popular. They grew by almost 400% from last year to nearly half a million. This means they have grown fivefold.

The 25-45 year old age group signed the most permanent contracts, 1,358,162 contracts up to May. This is 194.3% more than the number of contracts signed in the same time period in 2021. The first five months saw the signing of 45 691 231 fixed contracts, which is 197.9% more than in 2021.

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