Not only national small and medium-sized companies do not want to increase wages this year, more and more people are thinking about reducing the wages of their employees.

The proportion of small and medium-sized businesses thinking about raising wages dropped dramatically in the latest K&H SME Confidence Index data sheet. While in the previous quarter, 70 percent of companies planned to increase wages, currently only four out of 10.

By contrast, the share of those thinking about downsizing has risen to 12 percent, which hasn’t been the case for years.

In general, the next period will be stuck in earnings, and almost half of companies will not change wages to date. Almost half of employers plan to provide cafeteria benefits to their employees, the most popular of which is reimbursement for transportation costs.

According to the latest data from the Central Statistical Office (CSO), average gross income increased 9.4 percent to HUF 398,800 in May this year compared to the same period last year. “The wage growth momentum may be broken in the coming year as a significant shift in average wages is expected based on the results of the K&H SME Confidence Index. Compared to the previous quarter, 28 percent less, 42 percent of national executives plan to increase salaries only, and almost half of SMEs (45 percent) do not plan to change salaries in the next year. In addition, the proportion of those who expect a reduction in income has increased significantly, and almost one in ten SMEs (12%) has this, ”summarized the results, Roland Kökény, director of marketing for SMEs at K&H.

Still less, micro-enterprises (39 percent) and companies operating in the service sector (38 percent) consider wage increases to be realistic. In agriculture alone, the share of those forecasting a wage increase has not dramatically decreased.

Cafeteria benefits continue to be popular, with nearly half (45 percent) of companies planning in some way, 6 percentage points more than in the previous quarter. When it comes to cafeteria items, the rebate for going to work is the most popular even though it will be taxed as income starting in 2019: almost one in four companies (22 percent) would use this form in the next year.

The popularity of the food contribution on the SZÉP card and the leisure cafeteria elements on the SZÉP card increased slightly compared to the previous quarter: the food contribution from 8% to 11% and the leisure and accommodation subaccount 5% to 7%.

The K&H Quarterly SME Confidence Index, which has been continuously compiled since 2004, is compiled by interviewing business decision makers from 400 Hungary-based companies with an annual turnover of less than HUF 2 billion .



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