Regarding the minimum wage, 53.2% said they would “raise” it. Only 4.7% of businesses were able to pass the entire amount on to sales prices | Survey on minimum wage increases among small and medium-sized enterprises
*Net on*
Press release: September 17, 2024
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Regarding the minimum wage, 53.2% said they would “raise” it. Only 4.7% of businesses were able to pass the entire amount on to sales prices | Survey on minimum wage increases among small and medium-sized enterprises
* Neton Co., Ltd. (Headquarters: Kita-ku, Osaka, Representative Director and CEO: Kijima), which provides the recruitment marketing tool “Recruitment Section Chief”
Satoru (hereinafter referred to as NetOn) conducted a survey regarding the minimum wage increase targeting human resources and recruitment managers at small and medium-sized companies who are registered users of “Recruiting Section Chief”. *
-Survey results-
・53.2% responded that they would “raise the minimum wage.” “The rate has not decreased, but I plan to raise it” increased by 7.7 points from the previous year’s survey.
・The number one reason for the increase was “to respond to the minimum wage increase.” Approximately 90% feel that the minimum wage after the increase is a burden
・Less than 40% of respondents said they would “pass on” the increase in labor costs to the selling price. Of these, only 4.7% of
establishments were able to pass all of this on to the selling price (100%).
・Opinions raised regarding the increase in the minimum wage included, “In addition to the increase, we need to revise the system, such as abolishing deductions for dependents,” “It is difficult to pass on prices, making it difficult to continue business operations,” and “Even with the increase, it is difficult to secure human resources.” Ta
The minimum wage for 2024 will be revised by 50 yen on average nationwide, bringing it to 1,055 yen (weighted average). The amount of increase is the largest on record, updating last year’s level. The number of prefectures with over 1000 yen has expanded from 8 prefectures last year to 16 prefectures.
Although these developments are good news for the Japanese economy, they are a matter of life and death for small and medium-sized enterprises, which are struggling to secure funds for wage increases.
How will small and medium-sized enterprises respond to this year’s minimum wage revision?
Net-on Co., Ltd. conducted a survey targeting recruiters at small and medium-sized companies who are registered users of the recruitment marketing tool “Recruitment Section Chief” regarding plans for wage increases in line with the revision of the minimum wage.
-Survey overview-
Survey period: August 20, 2024 (Tuesday) to September 3, 2024 (Tuesday) Survey method: Internet survey
Survey target: Human resources and labor personnel at offices using “Recruitment Section Chief”
Number of valid answers: 173
-Notes on survey results-
When displaying percentages, the percentage is rounded to the second decimal place, so a single response may not equal 100%, and multiple responses may not match the total.
53.2% of establishments responded that they would “increase wages” First, when asked about plans for wage increases due to minimum wage revisions (n = 173), the most common response (46.8%) was that they had no plans to raise wages.
Regarding establishments that are increasing wages, 23.1% said “I am not below the minimum wage, but I am planning to raise it,” and 30.1% were “I am not below the minimum wage, but I am planning to raise it.” Overall, it was found that the majority (53.2%) of
establishments are planning to raise wages.
Compared to the previous survey (conducted in August 2023/n=210), the percentage of establishments planning to raise the wage (“I will raise the wage because it is below the minimum wage” “I will raise the wage even though it is not below the minimum wage”) was 10.1 points. Decrease. On the other hand, of the establishments planning to raise their rates, the percentage of establishments that said they were not below the level but would raise it increased by 7.7 points.
Although the proportion of companies planning to raise wages has decreased, the number of establishments that are raising wages more aggressively than last year was found to be higher.
The reason for the increase is “to respond to the minimum wage increase.” When we asked businesses that answered “planning to raise the wage” in Q1 about the reason (n=92), 71.7% answered “in response to the minimum wage increase.”
In second place and below were “To promote the recruitment of human resources advantageously” and “To improve (retain) employee retention rates.”
On the other hand, only 7.6% said “because business performance has recovered (growth).”
89.1% feel that the minimum wage after the increase is a burden When we asked business establishments that are planning to raise the minimum wage whether they feel the increased minimum wage is a burden (n = 92), 57.6% answered, “I feel it is extremely burdensome.” When combined with “I feel it is a bit of a burden (31.5%)”, 89.1% of establishments “I feel it is a burden”. It can be seen that the increase in the minimum wage has a significant impact on the management of small and medium-sized enterprises.
The occupation with the lowest wages is the “cooking” occupation. Average hourly wage is 1021 yen
We asked all business establishments about the occupations whose wages would be the lowest due to this minimum wage increase and their wages (hourly wage equivalent) (n = 173).
After the increase (as of October 1st), the type of job that will have the lowest wages will be the “cooking” position. The average wage (hourly wage equivalent) is 1021 yen.
Minimum wages vary by region, so it is difficult to make general statements, but this survey found wage differences of more than 500 yen between occupations.
Less than 40% of establishments “pass on the increase in personnel costs to sales prices”
When we asked business establishments that answered “planning to raise” in Q1 whether they would pass on the increase in labor costs to sales prices (n=173), 63.0% of establishments answered “we will not pass on the increase in labor costs to sales prices.” I answered. It has become clear that more than 60% of establishments are unable to pass on rising labor costs to prices, making the issue of raising wages clear.
Only 4.7% of business establishments were able to pass the entire amount (100%) on to the sales price.
When we asked business establishments that answered “Pass-on price transfer” or “Pass-on price” in Q5 about the percentage of the price they passed on to the sales price (n = 64), the most common answer was “10-30%” (73.4%). It was.
4.7% of establishments were able to pass on the entire increase (100%). This result shows that even if the increase can be passed on to the selling price, it is by no means easy to pass on the entire increase.
67.1% said there was no impact from the unstable stock market We asked all business establishments (n=173) about the impact of recent stock prices.
32.9% answered that it had an impact. Currently, the majority of business establishments are “not affected.”
There are many issues regarding price pass-through. There are also voices of concern about deteriorating business management.
When we asked respondents for their opinions and thoughts on raising the minimum wage, the responses we received centered on concerns about the management burden of raising wages, as well as opinions about systemic issues in price pass-through and securing human resources. Here we present some excerpts from the 58 responses (wording has been adjusted to improve readability).
-Free answers/partial excerpts- *In parentheses are industry type/employee size/location
* ■Opinions on raising the minimum wage*
・I don’t know what the appropriate level is, but I think life will continue to be difficult unless we raise wages more realistically, taking into account international competitiveness, etc. (Trading company/wholesale/30-49 people/Gunma Prefecture)
・I don’t want to be lumped together by prefecture. If wages are to be raised, employers also need subsidies (Retail/10-19 people/Aichi Prefecture)
・Small and medium-sized enterprises will be hit hard. I want continuous subsidies (no obligation to repay) (Food/beverage/5-9 people/Ibaraki Prefecture)
・Those who wish to work will not be able to work unless consideration is given to the elimination of spousal deductions, etc.
(Finance/Insurance/5-9 people/Nara Prefecture)
・I would like to know what the country thinks about reducing the working hours of people who work as dependents (Medical care/10-19 people/Ibaraki Prefecture)
* ■Issues related to price pass-through*
・Since prices cannot be changed due to franchise management, raising wages is quite a burden (Education/5-9 people/Osaka Prefecture)
– Medical fees are determined by the government, so prices cannot be manipulated. Under such circumstances, raising the minimum wage by 5% is extremely difficult (Medical/5 to 9 people/Osaka Prefecture)
・I would like nursing care fees to be increased (nursing
care/welfare/10-19 people/Okinawa Prefecture)
・In industries where the government sets service fees, income does not increase even if wages are increased (nursing care/welfare/10-19 people/Oita Prefecture)
・I don’t mind raising the minimum wage, but I would like a budget to be created to raise wages for industries where it is impossible to pass on the price. (Nursing care/welfare/10-19 people/Chiba
Prefecture)
* ■Concerns about business deterioration*
・Minimum wages are rising every year as price pass-through is difficult, making it difficult to continue business (Food &
Beverage/5-9 people/Osaka Prefecture)
・It is extremely difficult to raise wages due to this poor economy. I think the number of companies going out of business will increase (Other lifestyle-related services / 5-9 people / Tokyo)
・It is difficult to secure human resources even if the increase is increased (Medical/5 to 9 people/Kagoshima Prefecture)
* summary*
In this survey, we conducted a survey regarding the minimum wage hike that will be revised from October 2024. As a result, it was found that 53.2% of business establishments were planning to raise their tax rates. The number of establishments planning to raise wages has decreased by 10.1 points from the previous survey (conducted in October 2023/n=210), but the percentage of establishments that are “not lower than the minimum wage but are raising it” has increased by 7.7 points. .
Nearly 30% of businesses chose the second reason for a wage increase, “To promote better recruitment,” and the third reason, “To improve employee retention rates.” On the other hand, only 7.6% of
respondents said their business performance had recovered (growth), and from these points it can be seen that many establishments chose the so-called “defensive wage increase.”
In this survey, we also asked whether there was any price
pass-through. As a result, 63.0% of establishments answered that they do not pass on price changes. Among establishments that “passed on price”, only 4.7% were able to pass on all (100%) of the increase in labor costs. The free answers that mentioned the difficult business conditions suggest that productivity improvements are not making up for the increase that could not be passed on to prices.
In recent years, minimum wage increases have continued to reach record highs, and significant increases are likely to continue. Small and medium-sized enterprises are required to steer their management on the premise of sustainable wage increases, such as by appropriately passing on price increases, improving productivity, and making use of support systems.
Neton Co., Ltd. contributes to solving recruitment issues and contributing to the sustainable growth of small and medium-sized enterprises by providing the recruitment marketing tool “Recruitment Section Chief”.
* -About “Recruitment Section Manager”-*
It is a recruitment marketing tool specialized for use in small to medium-sized and local companies. A highly effective recruitment site can be completed in as little as 2 minutes, and it supports all aspects of recruitment operations, from recruitment branding to recruitment promotion. The created recruitment site can be
automatically linked and posted all at once on up to five job search engine sites with one click, making it possible to appeal to job seekers nationwide and improve customer attraction. Additionally, with the support of our professional staff, we can further increase the success rate of recruitment.
Official website: https://saiyo-kakaricho.com
* -About Neton-*
Since its founding in 2004, Neton has been engaged in the web marketing support business.With the desire to “create the best encounters between companies and job seekers,” in 2017, Neton began providing the service of the recruitment marketing tool “Recruitment Section Chief.” It has started. Since then, we have steadily increased our track record and grown to a service that is used by over 69,000 business establishments in Japan (*). Neton will continue to support corporate recruitment activities with the aim of resolving the nationwide recruitment difficulties and shortage of human resources, and will contribute to the creation of a society in which small and medium-sized enterprises and local businesses can play an active role. (*) As of September 2024
* -Company Profile-*
Representative Director and CEO: Satoshi Kishima
Location: 1F Umeda Park Building, 7-8 Nozakicho, Kita-ku, Osaka Company establishment: October 1, 2004
Business details: Development and operation of recruitment marketing tool “Recruitment Section Chief”
Capital: 736.28 million yen (including capital reserve)
Official website: https://neton.co.jp/