Labor Market

Labor market in Belgium

Invest in people

A well-functioning and flexible labor market is key to ensuring a strong economy and to attracting investment. The labor market is driven by supply and demand, connecting people with the right skills to jobs. The legal and administrative framework for attracting, rewarding and retaining employees should be simple, efficient and cost competitive. Despite Belgium’s strengths, its labor market is not always perceived to be competitive, flexible and attractive for either employers or employees.

Labor costs

Foreign investment generates a significant amount of direct and indirect employment in Belgium. Although international companies continue to invest here, they are creating fewer jobs in general, fueling the prospect of “jobless investments”.

While Belgium boasts a talented, highly skilled and multicultural workforce, the exceptionally high cost of labor is a deterrent to job creation. This concerns all job levels, but is especially pertinent for senior management and other high-profile positions, because there is no ceiling on social security contributions. Social charges in Belgium increase – without limit – in proportion to the salary. Moreover, Belgium’s pervasive wage indexation system further drives up the cost of employment and decreases overall competitiveness.

 

Talent and flexibility

In addition to the concern about cost competitiveness, digital technologies are changing both the way companies operate and what they look for in employees.

Belgium has a 3.5% job vacancy rate, the second highest in Europe, while at the same time companies often struggle to find the right talent. This points to a skills mismatch – jobseekers do not have the skills that are sought in today’s labor market. It is this talent shortage which drives the increasingly fierce competition between companies for qualified workers. With the rapid pace of technological change, countries will need to invest in STEM education and digital skills as well as reskilling and lifelong learning programs.

The growing importance of e-commerce, the so-called platform economy and other new business models is changing the organization of work. Belgium risks missing opportunities due the lack of flexibility in its labor market, such as around night work and weekend work.

Belgium in the ranks

AmCham Belgium recommends

To improve business and investment opportunities

  • Improve the flexibility of work organization and remuneration
  • Simplify talent acquisition
  • Introduce a ceiling for employer social security contributions
  • Adjust automatic wage indexation
Improve the flexibility of work organization and remuneration

Improve the flexibility of work organization and remuneration

  • Increase the possibility to organize work in a flexible manner, especially in terms of night, weekend and seasonal work. Combine with a simplification of employee timekeeping
  • Relax the rules on the lending of personnel
  • Create a platform economy credit
Simplify talent acquisition

Simplify talent acquisition

  • Invest in reskilling employees
  • Stimulate dual-learning
  • Increase the number of STEM graduates
  • Support cooperation between universities and companies
  • Further expand the partial exemption of the wage withholding tax for qualified researchers and reduce the administrative burden
  • Facilitate the immigration of qualified talent through an efficient implementation and execution of European immigration directives
Introduce a ceiling for employer social security contributions

Introduce a ceiling for employer social security contributions

  • Introduce a ceiling for employer social security contributions to attract more highly qualified people to Belgium, in line with neighboring countries
Adjust automatic wage indexation

Adjust automatic wage indexation

  • Adjust the automatic wage indexation to apply only up to an agreed salary level

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