Wages for employees in Germany are expected to rise significantly in 2023

Created: 12/23/2022 3:23 p.m

By: Lisa Mayerhofer

A study by the ifo Institute suggests that wages will rise in 2023.

In addition, a good third of the companies are planning to hire more staff in the coming six months.

Munich – Consumer prices are rising much faster than wages in Germany.

As a result, many employees have less money at their disposal.

That should change in the coming year.

HR managers in German companies expect a significant wage increase for their employees in 2023.

ifo Institute: Companies expect significant wage increases

In a study by the Ifo Institute and the personnel service provider Randstad, 81 percent of the HR managers surveyed stated that wages will rise – by an average of 5.5 percent.

19 percent expect wages to remain the same, and almost nobody expects wages to fall.

"Especially in small companies and in retail, individual companies expect even significantly higher wage increases," said the ifo Institute on Friday.

The wage increase in trade should average 5.9 percent and in the service sector 5.6 percent.

Industrial companies expect increases of 5.0 percent.

In addition, the smaller the company, the higher the expected increase.

According to the study, 42 percent of companies also want to pay a tax-free inflation premium in the coming year.

44 percent have not yet decided on it, 14 percent rule it out.

The federal government decided on the premium to compensate for inflation at the end of September.

Up to 3000 euros can be paid tax and duty-free.

This is possible until the end of 2024.

In industry, the premium is likely to be significantly higher than in retail, as the survey showed.

On average, the companies plan to exhaust 71 percent of the bonus.

A third of companies would like to hire more staff

A good third of the companies would also like to hire more staff in the coming six months.

For example, 31 percent of the companies stated that their staff would increase slightly, while five percent said it was likely to "increase sharply".

Almost half are planning to keep their staffing levels about the same, 16 percent expect a reduction and two percent expect a sharp drop.

The vast majority of companies are affected by the shortage of skilled workers.

A good 80 percent of the HR managers surveyed stated that they would also be affected in the coming year, with industry and the service sector being even more affected at 85 and 84 percent, respectively.

In retail it was 71 percent.

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Around 1,000 HR managers in German companies were surveyed.

The selection includes companies from the manufacturing industry, wholesale and retail trade and the service sector.