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Most Dutch businesses keep pay rises despite Covid-19, but others report freezes in pay and hiring

August 27, 2020

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Risque de pandémie

AMSTERDAM, 27 August, 2020 — The global pandemic has not damaged the pay rises that Dutch businesses overall have given their staff this year, research by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking, and solutions company shows, although some sectors have fared very differently to others.

At the beginning of 2020, employers in the Netherlands were planning to give their staff an average annual pay rise of 2.8%. But following the start of the pandemic they have cut that figure by just 0.2% to 2.6%. With inflation at 0.5% for 2020, that gives a real-terms average pay rise for Dutch workers of 2.1%.

The overall situation looks similarly stable in 2021, as companies expect to offer average pay rises of 2.7%. Inflation is forecast to be slightly higher at 0.7% next year, leaving a real-terms rise of 2%.

257 Dutch firms took part in the global study about salary budgets and recruitment. It revealed almost one in five (19%) Dutch firms froze their pay increases for 2020 because of Covid-19, and a further 13% decided to postpone their pay rise to later in the year.

Asked about staff levels, 14% said they had already cut staff levels because of Covid-19, and 57% are planning to do so. 67% said they are planning on freezing or reducing hiring.

Mary Cloosterman, Head of Data Services Sales Benelux and Nordics at Willis Towers Watson:

“Dutch businesses, like many globally, have had to cut costs to survive by making difficult decisions around pay rises and recruitment. Despite that many have kept their plans to raise wages and are hopeful of awarding pay rises next year.

“The depth of pay rise cuts and hiring freezes depends on the business sector. Some companies have excelled during the pandemic, particularly those working in food retail and logistics, and those with online businesses. Many of these firms are looking to hire and have not changed their pay policies.

“Those in other areas, including hospitality, air travel and event management, are finding the economic environment much tougher. With 57% of firms still planning to cut staff levels, we do expect to see adjusted figures and further cuts later this year from those under the greatest pressure.”

Global comparisons

The Netherlands compares favourably with many major global economies where employers are planning for lower 2020 pay budgets due to the coronavirus. In Europe, employers in the UK, France, and Germany are anticipating their ‘recovered’ 2021 pay budgets will still be lower than their pre-pandemic planned 2020 budgets.

G8 Salary Budget increase comparison

*All figures given as a percentage.
Overall salary increases (median) 2020
Before Covid
2020
After Covid
2021
UK 3.0 2.7 2.8
France 2.5 2.3 2.4
Germany 3.0 2.7 2.9
Italy 2.5 2.4 2.5
United States 3.0 3.0 3.0
Canada 3.0 2.9 3.0
Japan 2.5 2.2 2.5
Russia 7.0 5.0 6.0

Notes to Editors

1 The Salary Budget Planning Report is compiled by Willis Towers Watson’s Data Services Practice. The survey was conducted in June 2020. Approximately 15,000 sets of responses were received from companies across 132 countries worldwide. 257 organizations in the Netherlands responded.

2 The report summarises the findings of Willis Towers Watson’s annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2020 and beyond.

3 Consumer Price Index (CPI) inflation figures are compiled by the Economist Intelligence Unit (EIU). Figures as at June 2020.

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