Temporary unemployment in Belgium rises again - staff at risk of leaving

With the energy crisis, the use ​ of the temporary unemployment system is growing once again. A study by Acerta now shows that workers put on temporary unemployment for more than 60 days are more likely to leave the company.

In Belgium, an employer can declare an employee temporarily unemployed. That measure can be invoked in crisis situations, such as during Corona or because of the energy crisis. It prevents employers' costs from increasing any further when production cannot continue or is reduced. Workers then receive state benefits.

During Corona, more than 100,000 people were put on temporary unemployment. Since early October, employers can now also call in the high energy costs as a reason to put their workers on temporary unemployment. 784 companies have since taken that step for a total of 41,226 workers in Belgium, RVA figures show. "It is the indicator that the economy is stalling. And ultimately that a recession is imminent."

"Companies are not doing this for fun. Cutting back or shutting down production is very drastic," says labour economist Stijn Baert (UGent). "But they go through the exercise: what is still profitable and what is not? Especially in industry this is a problem, where we also have to stand up to international companies that are not groaning under the energy crisis."

Staff leaves

The expansion of the temporary unemployment system - first during corona, now due to the energy crisis - has had a striking impact on that 'non-natural staff turnover' among companies. Companies that put their staff temporarily unemployed at home for more than 60 days over the past two years saw twice as many workers leave than those that did not use temporary unemployment, learns a survey hr services company Acerta based on data from 260,000 employees in 40,000 Belgian companies.

In recent years, on average between 6 and 10 per cent of workers leave their employers. The natural outflow in companies has fluctuated around 2 per cent for years. The bulk of non-natural attrition is employees resigning or being fired.

This year, 7.3 per cent of workers left if they were temporarily unemployed for more than 60 days. Among workers who were in temporary unemployment for less than 60 days, it was only 5.6 per cent. Among those without temporary unemployment, that percentage drops to 3.7 per cent. ​ There was a similar trend in 2021, with 10 in 100 workers leaving the firm if they were temporarily unemployed for more than 60 days, compared with five in 100 workers left in firms without temporary unemployment.

"If people are put on temporary unemployment for too long, they are gone after that. The system of temporary unemployment is welcome for many companies, but it does make employees think about their professional future, perhaps also partly because of the loss of income," said Dirk Vanderhoydonck of Acerta Consult. This is true in all sectors and among white-collar and blue-collar workers alike. "Temporary unemployment is a necessary lifeline for a lot of companies, but it should not become a passe-partout."



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