threat to growth.
(Photo: Blend Images/Getty Images)
Conducting salary negotiations is now a pleasant thing. After two years of the crisis, employees’ wish lists have become significantly longer. And most of the demands from annual interviews and job interviews should be met. After all, there is a shortage of skilled workers.
Germany’s companies are planning an average salary increase of five percent this year. There is hardly an industry that does not benefit. This is undoubtedly good news for workers.
It is bad news for companies: In addition to raw materials, energy and transport, personnel are also becoming more and more expensive. For example, before Corona, an IT system architect was almost 20,000 euros cheaper than today. This cannot be explained with diligence stars and inflation alone.
A salary bubble has long since emerged among specialized professionals. IT, controlling or marketing talents have been earning up to a quarter more since the pandemic. You don’t have to be an economist to imagine that this wage increase for top executives will trigger a domino effect within the workforce.
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This development is dangerous for companies. The risk that individual employees will be absent increases with income. In addition, some medium-sized companies will have to ask themselves in the next few years whether and how many well-paid experts they can or want to afford. That slows down innovation.
Increasingly important: Alternatives to the increase in salary
For Germany’s economy, the overbidding competition for salaries is becoming a threat to its own business model. Goods and services “made in Germany” are becoming even more expensive due to rising wages. The result: demand falls. Added value is destroyed. As an export nation, that hurts twice.
It is correct: Many employees worked hard during the crisis. More money is always justified where the burden was great and the performance all the greater. However, companies are well advised to look for creative alternatives to regular and permanent salary increases in times of high inflation – such as one-off payments, more vacation or even more flexible working hours.
In addition to the European Central Bank, which has to react to inflation, the trade unions also have a responsibility not to allow wages to rise too quickly.
In the fall, one of the biggest collective bargaining rounds of the year is due to take place in the metal and electrical industry. IG Metall boss Jörg Hofmann announced at the weekend that one-off payments were not enough for him in view of the high inflation.
One must ensure that employees do not lose purchasing power. The bubble grows.
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