Strong wage growth is expected in Belgium this year, following three consecutive years of falling real wages. This will increase pressure on employers’ wage bills.
A rise in job vacancies as a share of employment, and a growing long-term unemployment rate, suggests growing skills mismatches in Belgium.
Firms seeking to grow their workforce may face increased pressure as participation growth rates slow. Youth participation rates have declined every year since 2007.
Managing Director, Hays Belgium
We are seeing sustained growth of the economy – even though it’s limited to 1.6% – and as a result there is increased business and consumer confidence. These positive developments are encouraging companies to recruit more people and candidates to make the jump to a new job. Despite this, companies are still having trouble recruiting due to a lack of candidates, evidenced by a continuously increasing talent mismatch score. Belgium has a low unemployment rate, but those out of work are not always employable due to a lack of the right skills. Furthermore, ‘job hopping’ pushes companies to rethink their retention strategies and puts even more pressure on wages. On a positive note, the tax incentives enacted by the Government are stimulating job creation.
Robby Vanuxem, Managing Director, Hays Belgium
In 2017, the numbers employed increased by 1.4% and the unemployment rate fell by 0.8 percentage points to 7.1%.
The improvement partly reflected reforms to pensions, taxes on labour and eff orts to contain wage growth. Many of the newly created jobs went to older workers.
But there remain problems in the Belgian labour market. Youth unemployment, at 19% in 2017, is above the average in the European Union. This may have a negative impact on those young people’s future pay, long-term probability of being unemployed, and opportunities in life. There are also marked differences in regional unemployment rates.