French wages increased in 2022 by 3%, compared to around 1% in previous years. But prices continue to soar and make these increases insufficient to maintain purchasing power. Companies must therefore navigate between two pitfalls: satisfying their employees and preserving their competitiveness.
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The equation can be complex in some small and medium-sized businesses. At Etna France, manufacturer of lifts and hoists in the Eure, the hundred or so employees are used to being increased every year by around 2%. It is therefore less than inflation and the boss Vincent Bronze assures him, he cannot do more: “The brutality of the stratospheric increases in the materials that make up 45% of our prices, completely eat away at our margins and leave almost no possibility of doing more from a salary point of view. This is something that, ultimately, is new. L inflation, we had hardly any for almost 20 years. So what is happening to us is a novelty to which we have to adapt.”
To adapt, the business manager favored the transport bonus: 40 euros net per day and per employee. “An employee who comes to work five days a week received a bonus of 200 euros in September, indicates Vincent Bronze. It’s a single bonus, but it’s the little margin we have left to give employees a hand. At the same time, employees are fully aware of the difficulties their companies are encountering. Employees who listen to the news are aware of this.”
Wage increases, exceptional bonuses, salary savings… Bosses still have several tools to improve the purchasing power of their employees. You have to find the right cocktail, explains Olivier Tricon. He is the manager of a vineyard in Burgundy with about twenty employees. “At the beginning of the year, we took the opportunity to make the Macron bonusessays Olivier Tricon. Then, in June, there was a salary increase of 3.5 to 5%. And then, we are looking to make a new bonus, not this year, but perhaps at the very beginning of the year.
“We don’t have unions. There really is a two-way listening. And me, being able to do it, I tried to make my employees benefit from it.”
Olivier Tricon, manager of a winery in Burgundyat franceinfo
The purchasing power of employees is not the only motivation. Managers also try to limit turnover in their company. These salary increases are therefore also a means of retaining employees and recruiting the right profiles.
On the side of the large groups, the timetables for wage negotiations have been disrupted. Usually, management and social partners negotiate once a year during the mandatory annual negotiations (NAO). But this year 2022, in the face of inflation and pressure from unions, many companies have been forced to reopen negotiations and grant additional raises. There is for example Carrefour, Michelin or Air France.
“What we see is that many companies have anticipated the NAO 2023, that they have started to negotiate as early as September or as early as Octoberexplains Rodolphe Delacroix, specialist in compensation policies at Alixio, a consulting group for companies. We now have a lot of companies that have signed agreements with value sharing bonuses, which is an old ‘Macron bonus’. It makes it possible to send a sign to employees and trade unions, that purchasing power is taken into account and then to prepare negotiations on higher bases than the previous ones.
But for the unions, these bonuses are insufficient. They continue to demand wage increases in line with inflation. “Paradoxically, when companies are doing very well like TotalÉnergies, when they make a lot of profits, social dialogue is more difficult because appetites are greaterexplains Rodolphe Delacroix. And you have companies that have more peaceful social climates. It is very difficult to generalize. But what we see is still on the side of the HRDs a real awareness of the need not to wait and to do things quickly.
But with prices that will continue to rise, inflation stronger than expected in 2023, the next wage negotiations promise to be hectic.