A survey of 1,000 employers carried out by the HR services provider Liantis has found that the sharp index-linked pay rises in 2023 that came about due to high inflation in 2022 left little room for above inflation pay rises, bonusses or recruitment last year.
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Sharp index-linked increases left less room for above inflation pay rises, bonusses or recruitment in 2023
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High inflation meant that many people saw their salaries rise significantly at the start of last year. In Belgium salaries are pegged to inflation and in the private sector are increased accordingly. For example, more than half a million white collar staff saw their salaries increase by more than 11% at the beginning of 2023.
The scale of the index-linked pay rise had consequences. Half of the employers surveyed indicated that there was either no or less room for any additional pay rises. Meanwhile, 30.1% said that they had hired fewer people than they otherwise would have done due to high wage costs. 31% of employers said that no longer saw any margin for them to be able to offer collective bonusses to their staff.
A different situation soon?
This year’s automatic index-linked pay increase for white collar staff is 1.48%. This might open options for employers to recruit extra staff or to offer existing employees a little bit more. Mattias Dessein is a senior manager at Liantis Consult. He told the press agency Belga that "The modest index-linked increase is undoubtedly a windfall for a lot of SME employers. It will after all, eases the pressure on the wage bill and in turn create more room to grant individual wage increases and collective wage bonuses. Moreover, in addition to financial perks, it also potentially makes the recruitment of additional staff a possibility again."