8 million companies in Europe would hire more employees if they got paid faster
According to every third European company (32 percent), faster payments from customers would make it possible to hire more employees. It is equivalent to 8 million businesses*.
* The figures are based on that there are in total 25.3 million businesses in the countries surveyed , according to official data. Source: Eurostat SBS Nace rev 2
Every fourth company in Europe (24 percent) also stated that there is a correlation between late payments and the need to lay off staff.
6 out of 10 companies estimate that late payments are part of a deliberate strategy of their debtors. This applies to B2B companies and means that corporate debt strategies contribute to fewer jobs.
Half of the companies surveyed say they have been asked to accept longer payment period than they are comfortable with.
Every third company in Europe would be able to hire more employees if they got paid faster. It appears from the debt collection company Intrum Justitia's European Payment Report 2015, based on questions about payment answered by 8979 companies in 29 countries. 32 percent answered yes to the question "Would you hire more if you got the invoices paid faster?" This corresponds to 8 million businesses in the countries surveyed.
” There are 25 million companies in the countries included in our survey. If we relate this to the fact that there are 23 million people without a job in the EU, one can conclude that if every company employed one more the unemployment would be erased - a theoretical yet interesting assumption. Our survey indicates that 8 million companies would probably employ at least one more if they received faster payments. This example illustrates the great importance of payment issues and payment management”, comments Lars Wollung, CEO & President of Intrum Justitia.
The geographical differences are relatively large. In southern European countries it is four out of ten companies and in Eastern European countries, 44 percent, who believe themselves to be able to hire more if they got paid faster. In northern Europe, the figure is 16 percent.
Would faster payments from your debtors enable your company to hire more employees?
Every other European company states that they have been asked to accept longer payment period than they are comfortable with. When asked about the consequences of late payments, the connection to employment is clear: Every third company sees a clear connection to not being able to hire more and one in four companies (24 percent) also stated that late payments contribute to the need to lay off staff. Among companies with more than 50 employees it is 19 per cent who see a correlation between late payments and having to terminate employees.
Intrum Justitia has also asked about what the main causes are to customers paying late. It turns out that 6 of the 10 judges that "deliberately late payments" are a principal cause. This also applies to companies which have only business customers and it means that conscious strategies to pay late contributes to reduced liquidity, which in turn contributes to fewer jobs.
What are the main causes of late payment of your own customers?
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About Intrum Justitia
Intrum Justitia is Europe’s leading Credit Management Services (CMS) group, offering comprehensive services, including purchase of receivables, designed to measurably improve clients’ cash flows and long-term profitability. Founded in 1923, Intrum Justitia has some 3,800 employees in 20 markets. Consolidated revenues amounted to about SEK 5.2 billion in 2014. Intrum Justitia AB is listed on Nasdaq Stockholm since 2002. For further information, please visit www.intrum.com
About Intrum Justitia European Payment Report
The European Payment Report 2015 is based on a survey that was conducted simultaneously in 29 European countries between February and April 2015. In this report Intrum Justitia gathers data from thousands of companies in Europe to gain insights in the payment behavior and financial health of European businesses.
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