Family companies expect a significant increase in wage costs

While in the past two years companies had to deal with high energy costs and skyrocketing raw material prices, today this is no longer the main difficulty. “As part of our K&H family companies club professional event, we assessed what domestic family-owned companies see as the biggest challenges for this year. Based on the results, wage costs are clearly the primary concern of more than half of the companies participating in the event,” said Ákos Ékes, head of the K&H family companies center. “The reason for this is that almost every company calculates with a salary increase. However, the companies are practically divided in terms of this. “One half of them is planning a wage increase of less than 10 percent, while the other half is between 10 and 20 percent,” the expert detailed the feedback.

The K&H large company growth index research – which examines the expectations for the next year not only of family companies, but also of Hungarian companies with an annual turnover of over two billion forints – also reveals that inflationary pressure is still present. 61 percent of family-owned companies indicated that the rise in consumer prices will mostly affect their profitability over the next 12 months, which even exceeds the average of the entire large company sector (59%), and is a spectacular jump compared to the one-third rate of the previous quarter. All in all, this put inflation in the first place among the factors most affecting profitability, even among large companies and family companies, ahead of supplier prices and domestic customers. This is significant because inflation has already moderated compared to last year’s typical double-digit price increase, but the cost-increasing and demand-reducing effect of high prices seems to be a problem for economic actors for a long time to come.