Salaries in 2023: Will we settle for just the salary indexation?

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Inflation climbed to a staggering 12.27% in October 2022. That also means an increase in salaries, due to the automatic salary indexation we have in Belgium. In some sectors, this amounts to an increase of more than 11%. Despite this historically high wage indexation, employees appear to have high expectations in terms of salary evolution.

Every year, international recruitment firm Robert Walters surveys professionals and executives in their network about their salary expectations for the coming year. This reveals that 47% of employees hope to get a pay rise in early 2023. Feeling the pressure of the tight labour market, employers plan to accommodate their employees: 62% plan to give a pay rise on top of indexation.  

Els Van Der Veken, director at Robert Walters, explains the main findings of this survey.

A little extra

Inflation is making life more and more expensive. Consequently, two in three employees are convinced that their employer will take the rising cost of living into account when deciding whether to give them a salary increase. 47% of professionals surveyed by Robert Walters hope to get a pay rise, and preferably as much as possible: 56% want a salary increase of 6-10% on top of January's automatic wage indexation.  

Hard work should be rewarded, it seems: over one in two expect to receive a bonus, as a token of appreciation. Again, expectations are high: almost one in three would like a bonus of 6-10% of the gross annual salary. One in five hopes for a bonus of 11-15%.   

Fortunately, 4 in 10 employees are satisfied with a salary increase in line with automatic indexation. They do not plan to negotiate extra pay from their employer, mainly because they feel their salary is in line with the work they do, or because their employer is still suffering financial consequences from the pandemic. 14% indicate they do not plan to ask for a salary increase for fear of losing their job.  

Salary more important than job security  

According to Robert Walters, as many as 58% of surveyed employees indicate that making the most of their salary potential is currently more important than job security. If that means changing jobs to do so, 4 in 10 workers are willing to do so. The confidence to easily find a new job is there, so organizations have every interest in taking their employees' expectations into account if they want to keep top talent on board.   

Els: "If offering a pay rise on top of indexation is financially difficult to achieve, alternative ways of remuneration can also be considered. Think, for example, of extending the package of fringe benefits, offering additional training or allowing employees more flexibility in terms of working hours and workplace."  

Employers are accommodating employees  

The same survey by Robert Walters shows that most employers (90%) are concerned about the talent shortage in their sector, mainly at senior/team leader level. Fortunately, they are aware that salary plays an important role now: 62% therefore plan to offer their employees a pay rise on top of indexation, hoping this will convince employees to stay on board. In terms of bonuses, employees need not fear either: 70% of the organizations surveyed do plan to thank their employees financially by giving a bonus.

"Besides the lack of applications, employers fear they will miss out on potential talent due to the current 'war for talent'. It is therefore increasingly common for organizations to bid against each other to convince applicants to choose their organization anyway. Never have organizations had to deal to this extent with applicants receiving a counteroffer from their current employer, hoping that they will not leave after all when they resign," says Els.  

New joiners can cause frustration in the workplace  

Job seekers choose companies. It seems like the upside-down world, but the fact is that organizations must put more and more effort into convincing talent to choose their organization. "Often employers have to dig deep to bring new employees on board. That sounds like a dream for job seekers, but it can cause a lot of frustration in the workplace. No matter how you spin it: people talk about their salary, even with colleagues. When it then turns out that - often younger - new employees earn almost as much as those who have been with the company for several years, the working atmosphere can suffer, or worse: be the reason why experienced employees resign.”

 

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