From rising labour costs and finding new talent to employee health, a recent survey by HR services provider SD Worx has analysed the main challenges and concerns for Belgian companies. But how will these affect employees?
Small and medium-sized enterprises (SMEs) in Belgium represent around 99% of the total number of Belgian companies. Recent figures highlight that many have been struggling with the current economic climate and excessive red tape for some time. In 2023, this resulted in a "notable" rise in business closures. The growth of new companies also slowed.
Belgian SMEs are facing several challenges, according to a survey of 557 SME company managers by SD Worx in December 2024. "Controlling rising wage costs is without doubt the most important challenge facing our Belgian SMEs," said SD Worx SME consultancy director, Annelies Rottiers.
These rising costs are driven by automatic wage indexation. This system is unique to Belgium and Luxembourg and sees both public and private wages increase alongside inflation. This obliges employers to adjust wages upwards along with the increase in the cost of living.
Regional differences
In January 2025, around one million people saw their wages rise by almost 3.6%. "Due to automatic wage indexation, gross wages have increased by 20% in the last four years alone," said Rottiers.
While companies in all regions are worried about the impact of these high labour costs, concerns are highest in Flanders: half of Flemish SMEs (49%) put it in their top three HR challenges.
Finding new talent is also a key issue here. As a result, more Flemish SMEs (one in five) are deploying flexible working. The Dutch-speaking region's third major challenge is increasing employee satisfaction and engagement.
Increasing employee satisfaction is a concern for SMEs in all regions. Credit: Belga
Rising labour costs are also the main concern for SMEs in Brussels, where 45% of companies indicated this was an issue. In second place is increasing employee satisfaction and engagement, which two in five SMEs deem a challenge. Finally, it was the only region that listed retaining employees as one of the biggest challenges.
Both in Brussels and Flanders, health and well-being at work were listed as the fourth-biggest concern. Meanwhile, in Wallonia, it is the main challenge (47% of SMEs indicated this was the case).
In Wallonia, rising labour costs come in second place, followed by increasing employee satisfaction and engagement. Timely and correct payment of wages is also more of a challenge here (20%) than in Flanders (13%) and Brussels (12%).
Effect on employees
To better control labour costs, companies may increase their analysis of hidden costs, including filling vacancies or people off on (short-term) sick leave. They may also consider different, cheaper ways to reward employees, such as a profit bonus. This sees companies allocate (part of) the profits to employees.
In all regions, retaining employees remains an important objective in 2025, due to the tight labour market. "As a result, more attention is being paid to improving employee experience and well-being," said Rottiers.
Related News
- Holidays in 2025: How to maximise time off work
- A year of mass layoffs: Belgium's auto sector hardest hit in nationwide spate of job losses
For this purpose and to improve employee satisfaction, more companies are working with the Flex Income Plan. This gives employees more autonomy in the composition of their pay package, and adjusts it to their personal preferences. Employers will likely be advised to listen more to employees about their needs through surveys and personal conversations.
Finally, companies are also increasingly asking how employees are doing, ensuring people take time off, using tools to create a balanced workforce planning and offering more flexibility, such as the option to work from home and flexible hours.
