Portugal Work Culture
To succeed in business in Portugal, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Icelandic work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Portugal to start your expansion well-informed.
Portugal has an Atlantic Ocean coastline to the west and is flanked by its Iberian neighbor Spain to the north and east. The 1,200km border between the nations is one of the oldest in the world, virtually unchanged since being set by the Treaty of Alcaňices in 1297.
Portugal’s geographical location has contributed to a rich history which includes being the first major maritime power in the 15th and 17th centuries, opening trade routes and colonial outposts in India and beyond to Japan, Korea, and East Asia in the Portuguese ‘age of discovery’.
Tourists and visitors are attracted by historical cities and architecture from those centuries, by Portugal’s beaches in the Algarve, seafood cuisine and Fado music, wine, mountains, and rugged landscapes. Lisbon is the capital, mixing heritage and culture with a vibrant lifestyle, while the former capital of Porto gave the country its name.
These are among the attractions for foreign jobseekers looking to find their perfect role in Portugal’s employment market. The Organization for Economic Cooperation and Development predicts Portugal’s economy will grow by 5.8% in 2022, building on 2021’s predicted Gross Domestic Product (GDP) of 251 billion US dollars to rank the nation 49th in the world.
Portugal has a mixed economy with the services sector, including tourism, accounting for over 65%. Speaking Portuguese and having other languages boosts opportunities for jobseekers, particularly in the service and tourism sectors – although this can be by-passed for those working online or in IT.
The opportunities are there, but alongside the exciting potential of making such a move comes many challenges. Incomers need to be up to speed to make their mark in this highly competitive environment.
Ready for the challenge? Now it is time to get down to business. So here are a few tips on taking the right steps and avoiding the pitfalls!
- Language: Portuguese, of course, is the official language but English is commonly used in the business environment, among other languages. Speak plainly though, avoiding colloquialisms, to avoid misunderstandings. If advised beforehand that your language is not fully understood, employ an interpreter
- Punctuality: Book the meeting a couple of weeks in advance, confirm at least once, and be on time or at least within five minutes, as the Portuguese are not so strict on this aspect as other nations
- Attitudes: Portuguese, naturally warm and welcoming, nevertheless tend to have a more formal attitude towards initial meetings. Compliments on the climate, cities, wine, and food will be appreciated; references to your own family and enquiries about theirs help to break the ice. Gentle humor and a smile help
- Business Environment: Much store is put by building relationships on trust. Employment contracts, for example, are not mandatory in Portugal … and a ‘Gentleman’s Agreement’ still counts. Beware … make your feelings known if agreed points are not being followed up
- Negotiations: Portuguese avoid an argumentative approach, being naturally friendly and tolerant, but if talks are meandering it is best to ask a direct question to get a satisfactory response. Your hosts will be slow to volunteer information and will not respond to high-pressure tactics. The business set-up is still largely hierarchical, so identify the main movers and display respect
- Greetings: Shake hands at the start of all meetings, including with a woman on the other team, but be prepared if a cheek is offered for a slight kiss. All graduates in Portugal have the prefix ‘Dr.’ so use that before the surname … unless you are corrected that the individual is a ‘Mr’
- Dress Code: Play safe – formal suits, jackets, and ties for men; dresses, skirts, blouses, and trouser suits for women
Portugal’s Minimum Wage
The national minimum wage was increased to €705 (US$798) per month from January 2022, up from the 2021 rate of €665 (US$752). Further, the government confirmed plans to increase the minimum to €750 (US$848) by the end of 2023.
Probation Periods in Portugal
Probation periods cannot exceed 240 days for senior managers; 180 days for other managers and the highly qualified; 90 days for others. Trial periods of 30 days are allowed for fixed-term contracts of six months or longer and 15 days in other cases.
Working Hours in Portugal
Under the Labor Code, working hours are restricted to eight per day and 40 a week, although they can be averaged over an agreed period. The average working week, including overtime, cannot exceed 48 hours over the agreed period, which cannot exceed 12 months. In the absence of an agreement the average period must not be more than four months. Collective agreements may provide for better entitlements. From January 2022, new legislation-imposed fines on employers texting or contacting remote or tele-workers after work hours on work-related matters.
Overtime in Portugal
Pay for extra work is 25% above the normal hourly rate for the first hour and an extra 37.5% for extra hours. Additionally, under the Labor Code, working overtime on rest days or vacation days is paid at 150% with a rest day on one of the following three days. Annual overtime maximums are 150 hours for companies employing more than 50 workers and 175 hours for companies employing fewer. Collective agreements may provide for better entitlements.