European companies lay off staff due to late payments

European companies could hire substantially more staff if they could only secure timely payments for their invoices, a leading credit management company has said.

Intrum Justitia said its survey of 8,979 companies across Europe showed that one in three enterprises would hire more employees if debtors paid their bills faster.

The survey showed large geographical differences, with around four out of 10 companies in Southern and Eastern Europe saying they would hire more people.

In Northern Europe, 16% of companies said they would employ more people if bills were not delayed.

“There are 25m companies in the countries included in our survey.

“If we relate this to the fact that there are 23m people without a job in the EU, one can conclude that if every company employed one more the unemployment would be erased,” said Lars Wollung, the chief executive and president at Intrum Justitia.

“Our survey indicates that 8m 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,” he added.

The survey showed a clear link between late payments and employment levels. One in four companies said that late payments led to the need to lay off staff.

It showed 32% answered yes to the question “Would you hire more if you got the invoices paid faster?”

“This corresponds to 8m businesses in the countries surveyed,” Justitia said.

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