BeNeLux Digest 2020

February 25, 2020

Within this report, we aim to bring you some insight regarding the greater changes coming to Belgium, the Netherlands, and Luxembourg following a highly mercurial year and with no sign of the market becoming any less unpredictable.
Europe generally is no exemption from this global uncertainty, with the UK making its first real steps on leaving the EU and moving into a withdrawal transition period at the close of January 2020. While the greater economic impacts of this move have been endlessly debated over the last 4 years, the UK’s partnership with Europe remains ambiguous as the UK focuses on a successful trade deal for the future. 
Casting our gaze further afield, the potential for Europe to feel further economic pressure could increase as we see a surplus of political, social and economic turmoil especially in the regions of the US and China. The lynchpin around these events being the ongoing trade conflicts between both countries with little sign of hostilities receding, further exacerbated by The UK’s controversial decision granting Huawei access to their 5G network. 
The Netherlands 
While the Netherlands has been consistently above average regarding overall growth and employment rates in comparison to the rest of the Eurozone (Dutch GDP in Q4 up by 0.4% in comparison to EUZ 0.2%, forecasted for 2020 is 1.5%, 0.3% higher than EUZ) there is a small but visible decline moving into 2020. This drop stems mostly from uncertainties carried over from the end of 2019 such as the Nitrogen crisis in October and a shortage of investment due to various global trade uncertainties. With that said the majority of economic commentary agree that this slight dip will give way to a steady rise throughout the rest of the year. 
Employment rates in the Netherlands similarly continue to rise (with one in five companies suffering from staff shortages) albeit more slowly. This rise however promises to finally reach the same level of employment seen previous to the global financial crisis.  Whilst employment within manufacturing is still set to fall, we will see and overall increase within business services, transportation and construction. Between 30-35% of these opportunities will be for white collar professionals. Furthermore, we will see a continuous rise to employees with high level qualifications. 
Due to the Netherlands’ tight labour market we will see a continuation to the increase in contractual salaries (from 2.0% > 2.5% in 2019 and set to grow further). Upon reflection however these increases are surprisingly low in comparison to the reliable employment figures.
In a similar fashion, Belgium shares the ambiguities facing the Netherlands. The fulcrum of Brexit can swing either way, with the more positive potential of creating opportunity via new business expansion or negatively with an impact on Belgium’s export market to the UK (which already fell by 12.27% in Q2 2019). 
Belgium are the worst affected by unemployment across the region at 5.6% (NL 3.5%, LUX 5.4%). This is however steadily improving (down from 6.4% in 2018) and continuing to fall. These figures can be attributed to a list of factors but the more prominent such as scaling up the creation of new jobs for low-skilled workers. 
Providing the resources to allow members of the workforce to re-skill/educate is a growing necessity in a labour market where skilled fields are becoming increasingly complex and numerous. This would grant the added benefit of providing an additional means for the long-term unemployed an opening back into the labour market. 
Analysis around unemployment figures also criticise the design of the benefits system currently in place. While providing income support some critique that this further discourages re-entry into the labour force for the long-term unemployed. 
An unusual additional factor into Belgium’s growth challenges stem from an extremely high congestion rate around Belgium’s main cities (and in turn the most concentrated zones of employment). Outside of the detrimental effects this has environmentally, reducing the levels of traffic in and out of Belgium’s major cities would greatly benefit the accessibility for near and far alike, reducing the skill gap. Ideas on how to achieve this take the shape of cutting down on corporate cars, a highly sought after benefit that reflects more upon the status this brings than convenience. This would allow employers to invest into alternative benefits more rewarding to the modern day employee. Investment into Belgium’s public transport has traditionally not been the highest priority, increasing the volume and diversity of public transport could alleviate some pressure mentioned above and increase the sphere of influence these cities have on future employees. 
Luxembourg has always been unique to analyse with its focus almost entirely around the financial and business services market, or the fact that the population doubles during the work week (out of the roughly 440,000 employed professionals 200,000 are cross-border workers). It can often be hard to compare in contrast with its peers. 
Luxembourg has been looking to diversify their markets over the last few years. As such there has been signs of growth in the areas of communication and information tech, bio-technologies, promoting investment especially into research & development within these fields.
Within these diversified sectors, Luxembourg has seen a shift in hiring with their developing IT and comms sector has seen a growth of more than 30% in the last couple of years. Overall employment is still growing but at a slower rate this year (3.2% down from 3.7%). In comparison unemployment in Luxembourg is staying roughly fixed at 5.3% for 2020. Much like the Netherlands wages are forecasted to grow by another 2.6%. While this figure is lower than previous years the general consensus predict this a result of an overall slowdown this year.  
Other news
Brexit has, and will continue to affect the EU over the next few years. BeNeLux is no exception to the rule and Luxembourg in particular finds itself benefiting from some of the financial fallout in the last year. The fear of Brexit’s aftermath on businesses based in the UK has caused some companies to move their headquarters and/or expand outside of the UK, constructing a safety net for their ongoing success.
The greatest concentration of upheaval was to Dublin with 115 firms so far opening post-Brexit branches. Luxembourg came in second with over 70 financial institutions making a partial or full relocation. Close behind also comes Amsterdam with 40 (and likely to keep rising). These include only those companies who’ve publicly announced their relocation decision and the total figure, 2020 will likely showcase a greater number as possible relocations become a reality.
Frazer Jones activity in 2019 was very exciting for us in Amsterdam, our BeNeLux hub. Frazer Jones itself grew by another six experienced consultants and we saw the successful launch of Taylor Root, our legal & compliance arm, grow into a team of six.
We handled some great assignments, partnering with leading local and global clients. On the senior side of the market we have been particularly busy with global and regional head of HR roles, global reward leadership roles, head of talent acquisition roles and various appointments within the talent space.
Our highly specialise interim management team has worked on some large scale projects including staffing an entire HR department for an acquisition and placing multiple interim leaders into a variety of change related roles.
Diversity & Inclusion 
Last year – as part of Frazer Jones’ social purpose strategy – we hosted an evening with the Global Chief HR Officers of ING & Endemol Shine, Global Heads of Inclusion & Diversity of Heineken, Philips and Vodafone in Amsterdam. During the evening we used a panel discussion and networking to discuss gender equality. 
This year in October we will host a full day conference in Amsterdam covering all major areas of D&I. Workshop leaders at the event will be CHRO’s of global businesses together with Heads of D&I. Attendees at the event will be HR leaders from across Europe. 
Traditionally each year January finds itself much lonelier in comparison to the rest. We ended 2019 with a great deal of uncertainty and February has not shown us a great deal of change as of yet. Regardless, the HR market remains very active and short of candidates especially within the specialist functions such as talent acquisition and rewards. 
With that said the lows are accompanied by the highs and the scent of opportunity and change is in the air. Especially Amsterdam is increasingly becoming the location of choice for HQ moves, start-ups and scale ups.