BRUSSELS, January 25, 2022 — Belgian companies significantly increased their expected pay rise budgets for 2022 in the second half of last year, as inflation and talent shortages created increasing wage pressure.
According to WTW’s (Willis Towers Watson) latest Salary Budget Planning Report, anticipated pay rise budgets for 2022 rose from an average of 2.7% in July last year, to 5.5% by December. This is an even steeper increase when compared to actual pay rises awarded in 2021, which averaged 2.3% in Belgium.
One of the main drivers of increased pay budgets has been the emergence of higher inflation, which is expected to average 3.8% this year, compared to 2.4% in 2021. Two out of five (39%) businesses in Belgium admitted that they were concerned about inflation and the rising cost of supplies.
Another factor contributing to increasing wages is a shortage of labour and increased competition for talent, with nearly two-thirds (63%) of Belgian companies claiming to have concerns over a tighter labour market this year.
Mary Cloosterman-Hughes, Benelux Rewards Data & Intelligence Leader, WTW, said: “There seems little doubt that costs, wages and prices are going up this year. A shortage of labour in some sectors is driving up demand for skilled workers, and a push for growth in others is igniting a war for talent as companies compete to attract and retain employees who have more choice than at any point in recent years.”
“Companies have responded quickly to these changes and it is rare to see anticipated pay budgets rise so sharply between July and December. In certain key technology focused industries, wage increases are even higher as employers try to take advantage of strong growth opportunities and a limited pool of highly specialised employees.”
The study shows that 38% of employers plan to recruit more staff in the coming 12 months, while 6% expect to cut headcount. Two thirds (66%) of firms are trying to fill roles in sales and over half (55%) are recruiting in engineering, while information technology (36%) and technical skilled trades (36%) are also hotspots.
Globally pay rises are anticipated to rise by 5.1% this year, up from an anticipated 4.7% in July 2021, with inflation set to hit 6.1%.
The Salary Budget Planning Report is compiled by WTW’s Data Services Practice. The survey was conducted in November and December 2021. Approximately 23,000 sets of responses were received from companies across 130 countries worldwide. 343 organisations in Belgium responded.
The report summarises the findings of WTW’s annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2022 and beyond. Consumer Price Index (CPI) inflation figures are compiled by the Economist Intelligence Unit (EIU). Figures as at December 2021.
