It promises to be a difficult year for employers and employees. Many will lose their enthusiasm for work
In 2024, there will be a record increase in the minimum wage so far. According to some experts, such a financial injection for the lowest earners will affect all Poles. It will have a negative impact on employee sentiment, lead to the impoverishment of the middle class and further increases in the prices of products and services.
Raising the national minimum wage twice in 2024, to PLN 4242 gross from January and to PLN 4300 gross from July, and the hourly rate to PLN 27.70 and PLN 28.10 respectively, will be a big challenge for entrepreneurs. Especially from the SME sector, where the minimum wage already exceeds 50 percent of the average wage.
“From January 2024, the total cost of maintaining one employee on the minimum wage will be 20% higher than at the beginning of this year. However, if we go back to 2022, we are already dealing with an over 40 percent increase in costs incurred by the employer – sums up Hubert Laśkiewicz, Business Development Manager at LeasingTeam Group.
It should be remembered that in addition to the gross amount that the employee sees on the employment contract, the employer must pay a number of other contributions. The total cost of hiring an employee for the lowest national wage from January 2024 will therefore be just over PLN 5,100, and in the second half of the year almost PLN 5,200. Along with the increase in the minimum wage, other benefits will also increase, such as the allowance for night work or the basis for calculating sickness benefit.
The manufacturing industry, cleaning and security services will suffer
As you can see, entrepreneurs will have to dig much deeper into their pockets than some may think. Naturally, the most sensitive to changes are those areas of the economy where the average salary is the lowest and small local companies providing their services outside the largest urban agglomerations, in regions where purchasing power is weaker.
“This will be felt most strongly by industries that rely on the work of low-skilled employees, as well as those in which the profitability of the business is largely dependent on the level of salaries. The increase in the basic wage will therefore be a significant blow to cleaning and security companies or the entire food processing sector, where after this year’s wage increases the average salary oscillates around the minimum wage. However, in my opinion, small, often family-run businesses, for which running a business at some point may even cease to be profitable, will suffer the most – says Mariusz Pyśk, Business Development Manager at LeasingTeam Group.
Entrepreneurs, in order to avoid job cuts, must find space in the budget for pay rises. However, in the long run, companies in the manufacturing sector in particular will start to invest more heavily in the development of process automation.
“For example, the call center industry has already been heavily automated, which has translated into a reduction in employment and flattening salaries in customer service departments. In the future, a similar situation may befall the technology industry. Despite fairly high salaries, we can expect a flattening of salaries in lower-level positions – forecasts Edyta Kowalczyk, Key Account Director at LeasingTeam Group.
Wage pressure and a decrease in motivation
According to labour market experts, wage pressure will intensify in 2024. In many companies, especially from the SME sector, there will be a bizarre situation in which people who do not have specialist knowledge and are just starting their professional adventure will earn almost as much as their more experienced colleagues in higher positions.
“Specialists with higher competences and skills want to feel that they are properly remunerated. When this is not provided, they will start looking for a new, better-paid job. On the other hand, people who do not decide to make this move and stay with their current employer may experience a decrease in motivation and a decrease in the quality of work – notes Sylwia Michałowska, Business Development Manager at LeasingTeam Group.
Flattening wages will also be a big challenge for the hotel, restaurant, warehouse logistics and production industries. It will certainly stabilize the level of salaries in entry-level positions, where the scope of activities is usually similar and does not require major qualifications. However, experts warn that in some cases, an increase in the national minimum wage may also reduce the motivation to work among the lowest earners.
“It is worth noting that the minimum wage is often the base amount. Many companies have various incentive and bonus systems, linking the level of remuneration to the results of work. The workplace regulations set a certain percentage of the basic salary, and reward, for example, the employee’s performance and lack of absenteeism. It may turn out that due to the increase in labor costs, bonus allowances will be included in the base salary, and this in turn may reduce the quality of work – says Mariusz Pyśk, Business Development Manager at LeasingTeam Group.
Certainly, in 2024, entrepreneurs will start looking for ways to reduce labor costs. Unfortunately, this may lead to a reduction in the number of employees or the flourishing of the “shadow economy”. One thing is certain. The end result of the changes being introduced, which will affect each of us, will be an increase in the prices of services and products.
Doświadczony analityk rynku pracy, specjalizuje się w badaniach nad trendami zatrudnienia i zmianami w strukturze zawodowej. Jego artykuły, publikowane w renomowanych czasopismach branżowych, pomagają czytelnikom zrozumieć dynamikę rynku pracy.
