Lydian has surveyed and analysed the impact of recent government measures
on company HR policies.
Brussels, 15 February 2012 – Companies are finding it very difficult to deal with the tsunami of HR-related measures they have been confronted with since the start of this year. More specifically, insufficient information and increasing complexity seem to be particularly important concerns regarding these measures aimed at, amongst other things, securing a balanced budget, tackling the ageing workforce and a level of economic activity that is too low, and putting on to the statute books the IPA-law (Interprofessional Agreement).
When questioned about wage indexation, many HR managers believe that if they are to be better positioned to deal with the very challenging economic situation, the wage indexing mechanism must be adjusted. Interestingly, managers are calling for adjustment and not abolition.
These findings represent the conclusions that can be drawn from an important survey undertaken by Lydian in January 2012 in which 100 HR managers were questioned about their perception of recent government measures affecting their HR policy.
2012 began with a wave of government measures impacting employers and employees through company HR policies. The fact this all occurs in a recession increases the pressure on companies considerably. As a result, the managers interviewed were found to be very critical of government policy as it impacts company HR.
Government economic measures under fire
As the graph below shows the economic measures announced by the government since the start of the year have been criticised by many HR managers. Those interviewed cited the lack of adequate information and answers to questions regarding the feasibility and the efficiency of a lot of the measures, as their grounds for criticism.
Click here to see graph re: perception of government measures
HR managers are much more positively inclined towards the measures linked to increasing the level of economic activity in the country and that deal with the ageing workforce. As such only 24% of those interviewed doubt the feasibility of reducing the early retirement age and only 19% find there to be a problem in increasing the age for early retirement towards the age of 62. A good 92% of respondents are convinced that limiting the unemployment compensation will, in time, push greater numbers of unemployed to seek and take up employment again.
The survey also reveals that it is about time that companies take the necessary actions themselves to tackle ageing issues internally and many managers believe this will boost employment. As the graph below shows many HR managers believe that their companies are not yet prepared for dealing with their aging workforces in a satisfactory way.
Tailor wage indexation more to economic reality
As regards the need to revise automatic wage indexation, 82% of the managers who participated in the survey are in favour.
However, interestingly, participants do not seek the abolishment of wage indexation but, rather want to see a better-balanced system that takes account of economic reality. Tailoring the index to economic growth and salary movements in neighbouring countries is preferred (32%), followed by indexing the net pay, without applying the NOSS-contributions (25%), indexing through a fixed amount and not in terms of percentage (20%), only indexing the minimum wage rates (12%) and applying an index without a component for energy costs (9%).
Jan Hofkens, employment law lawyer, said: “Recent press reports confirm the results of our survey. The pressure on employment will only increase in 2012. Furthermore, the HR managers we interviewed are not in the least convinced of the efficiency and feasibility of the measures taken so far. Will older employees have to work longer and more or are we heading for a Generation pact “bis”? After all the HR managers consider the reform of the government policy with respect to salaries as a priority and they are willing to go along with an innovative indexing mechanism. Our daily contact with HR managers across a wide spectrum of Belgian companies, large and small, confirms these results.”
“Furthermore as lawyers we are particularly concerned about any increase in legal uncertainty for employers. Increasing complexity and poorly drafted legislative texts are absolutely to be avoided. The announced “repairs” to the legislation that has been adopted makes us assume a worst-case scenario”,said Isabel Plets, employment law lawyer at Lydian.