Salary increases – and even more than usual – employees ask or expect to ask 81% of them enterprises in Greece in order to regain the purchasing power they had lost in previous years, as well as in the last two years due to inflation. The above is another headache for company executives, given that in many cases they don’t have the “luxury” of not responding positively to a request for a pay rise, as they have difficulty finding the right staff.

As the latest report from claims management company Intrum shows “European Payments Report 2023”, which was made public yesterday, this phenomenon is not only not Greek, but manifests itself with much greater intensity in a number of European countries. At the level of the European Union, the corresponding percentage is 85%, while in more than 9 out of 10 companies in Finland, the UK and Hungary, employees have asked for a pay increase, and in fact it is much higher than before. After all, it is no coincidence that in a number of European countries, such as Germany and France, we saw in the previous period workers unions start mass mobilizations demanding higher wages.

Transactions

In the same time, energy inflationary crisisadded to by the pandemic and the financial crisis, once again highlights delays in paymentsboth in business-to-business transactions and between businesses and the public sector. According to the report, the average actual business-to-business payment time was 55 days, 15 days longer than the agreed-upon maturity of 40 days.

In the previous report, the deviation was 13 days, which means that the inflationary crisis worsened the terms of business operations. As for the state, it remains the largest “bad payer” of business, with the actual average repayment of debts to its suppliers is 67 days, which is 12 days more than agreed. It should, of course, be remembered that during the years of the financial crisis in Greece, the actual time of payment from the state was twice as long as today. The quickest to pay – after all, they don’t have many options – are ordinary consumers, who have an average maturity of 34 days to business, nine days longer than the contractual term of 25 days.

The effect of inflation on the deterioration of business ethics among enterprises is reflected in another element that is impressive, since it concerns not only small and medium-sized enterprises, but even more so large multinational enterprises.

According to an Intrum survey, employees of 8 out of 10 Greek companies are demanding or will demand higher wages.

According to Intrum’s report, 67% of businesses in Greece say their multinational business customers have asked them to agree to longer collection times than they would be comfortable with. The corresponding percentage was 65% last year and is much lower in 2021 at 49%.

52% of enterprises received a similar request from a SMB client, this percentage was also lower last year (49%), and 20% received such a request from a public sector company.

In addition to the fact that businesses now spend time and money “chasing” bad debts (an average of 10.89 hours per week or 78 days per year, see and “Daily” sheet from May 13, 2023), this situation has even more painful consequences: overall financing costs are rising, business development is being hampered, liquidity problems are arising, and some are going to layoffs.

The latter answer was actually given by 27% of Greek businesses that took part in the Intrum survey. For 24% of enterprises, untimely fundraising for them it is a threat to their survival, and for almost one in five it means that they cannot make the necessary expenses for their modernization.

Prepayment of orders

It is in order to avoid the above that some companies take their measures, and indeed, to a much greater extent than in the past. More than half, namely 52% versus 45% in 2022 and 40% in 2021, require orders to be paid in advance, which of course means for the market to work. 38% check the creditworthiness of customers and 22% insure the loan, while others request letters of guarantee from banks.