Belgian companies prefer to drop pay rise instead of staff, when cutting costs

Recent surveys in Belgium highlight that small and medium-sized enterprises (SME) have been facing hardships such as wage indexation, energy crisis, and supply chain issues. Nevertheless, Belgian employers are doing their best to save costs and employees.

Two surveys published highlighted that retaining staff is the key goal in Belgium. More than eight in 10 Belgian SMEs do not expect their workforce to shrink in the first half of 2023, showed a survey by HR services group Acerta and employers' organisations ETION and VKW Limburg.

In previous surveys carried out at the end of September, staff layoffs to save costs was a solution considered by one in six companies, with one in five SMEs (19.8%) noting they were replacing fewer or no employees when they leave the company.

A survey by HR services provider SD Worx showed that 13.50% of SMEs indicated they would be firing existing staff members. "Possibly entrepreneurs are waiting to see how the economic situation will evolve further," says Bernd Carette, Senior Manager at HR Liantis Consult.

The same survey showed that companies foreseeing a decrease in the number of employees has remained at 17% since last summer. "For many SMEs, eliminating labour shortages is just the priority of choice for the new year," the report remarks.

Hiring less and giving less pay raise

SD Worx's survey also highlighted that Belgian SMEs prefer to hire less (40%) and not to give a salary supplement on top of the indexation of wages. Moreover, a study published by Acerta this month showed that only 12% of SMEs intend to provide employees with financial support above what is legally required.

"Unfortunately, due to rising staff costs, salary mark-ups are only a realistic option for one in five (21.9%) SMEs," said Annelies Rottiers, SME advisor at SD Worx.

Meanwhile, companies are looking at other staff incentives such as team-building activities, investing in the workplace and working hours flexibility.



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