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8 million companies in Europe would hire more employees if they got faster payment from debtors Print E-mail
Tuesday, 26 May 2015

Every third company in Europe would be able to hire more employees if they got paid faster by their debtors. 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.

Every other European company state 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 out of 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.

(Source - Intrum Justitia European Payment Report 2015)  

 

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