why are SMEs and VSEs reluctant to increase salaries in 2024?

Less than two thirds of small and medium-sized enterprises (SMEs) and very small enterprises (VSEs) plan to give a boost to remuneration this year: 64% of managers surveyed will do so if they can, compared to 72 % in 2023 at the same time. If there are wage increases, they should reach 2.6% on average. This is what emerges from the quarterly barometer, published Tuesday February 27, and established by Bpifrance Le Lab and the Rexecode economic institute, two economic research companies.

SMEs encounter several difficulties. First of all, demand is not there and production is stagnating. Treasurys are not exhausted – they have even increased very slightly according to the survey – but small bosses remain cautious in the face of an uncertain economic situation. And then another important factor in the current debate on purchasing power, almost half of French SMEs and VSEs are faced with the impact of automatic increases in the minimum wage, which takes into account inflation.

If it is less problematic for large companies, catching up with low salaries by increasing the minimum wage is much more complicated for small structures, because SMEs and VSEs do not have the same capacity to increase their employees without taking a hit. on their margins. To which must be added the increase in labor costs with the elimination of reductions in employer contributions.

The fear of raising prices too much

The few salary increases planned this year are not the only consequence of this wait-and-see attitude of small bosses. The other effect is found in the pricing policy. Faced with stagnant demand, the managers of SMEs and VSEs interviewed by Rexecode and Bpifrance Le Lab do not want to increase their prices too much, for fear of curbing this demand even further. Certainly, this will contribute to disinflation (the long-awaited drop in prices for certain consumer goods), but we can see how complicated the situation remains to manage.