The importance of analyzing the effect of wage increases on operating and financial costs in organizations.

The minimum wage is a tool used by governments around the world to address poverty and inequality among the sectors of a country. However, in Venezuela, due to the strong economic crisis facing the nation, there are economic measures taken by the national executive, such as constant salary increases, which have had a severe impact on organizations, hindering operations and reducing profits, certainly benefiting the employee but affecting the company.

Likewise, for companies to produce and remain active in the market is a daily challenge, due to the prevailing and galloping hyperinflation in the country, the economic situation and the lack of supplies. This has undoubtedly led the organizations to readjust their processes and adjust the salary of most of the workers in accordance with the minimum wage, in order to be able to comply with the other labor obligations.

Therefore, when there are wage increases such as the one that is approaching, due to the strikes that exist because of the economic crisis and the drop in purchasing power, this further complicates the situation for organizations, since they must assume these changes without harming the company's operations, avoiding incurring in labor liabilities and future penalties; being essential to project labor costs in such a way that the company's profitability is not compromised.

From this perspective, it is very important and fundamental to know the effect of salary increases on operating and financial costs, since these are part of the most important financial indicators for decision making, making it possible to project and guide the company positively or negatively, with the intention of serving as a source of financial information that allows readjusting cash expenditures according to the needs of the company without causing risk factors such as indebtedness that lead to bankruptcy.

To conclude, it is very important for management to be able to analyze the effect of salary increases on operating and financial costs in companies, in order to project a source of information that promotes a reference that allows to face salary adjustments and changes that may arise in the company to continue operating in a complete manner.