AMSTERDAM, July 20, 2023 — Dutch employers are planning to increase their budgets for pay rises by 4.2% in 2024 as they try to attract and retain staff amidst high inflation and a challenging labour market, according to research by WTW, a leading global advisory, broking, and solutions company.
WTW’s latest Salary Budget Planning Report, which got 703 responses in The Netherlands, found that the 4.2% increase for 2024 is lower than the 4.6% actual average increase in pay budgets given in 2023. A third (33%) of businesses said their pay budget is now higher than they thought it would be.
Employers are increasing pay budgets for three key reasons: 70% said inflationary pressure is the main reason, 54% said they are responding to a tighter labour market, and 22% said they want to improve the retention of existing staff.
“While we are seeing lower salary increases forecasted for next year, they’re still well above the ones we’ve seen for the last 10 years. This shows that companies are striving to stay competitive in a dynamic work climate”, said Mary Cloosterman, senior director, WTW Netherlands. “Those companies that have a clear compensation strategy as well as a good understanding of the factors affecting it will be more successful attracting and retaining employees while keeping pace with an evolving environment in which yesterday’s certainties no longer apply.”
Among Dutch firms, a third (33%) said that the outlook for their business is better than they had forecast, while 55% said it was in line with their expectations. 19% plan to increase their total headcount over the next 12 months. Six in ten (61%) of employers plan to recruit engineers in the next 12 months, while 55% are hiring in IT roles, and 49% want more sales people.
Cloosterman added: “It takes more than compensation to attract and keep great talent, and the past few years have pressed companies to be more resourceful. As workforces become more diverse, demanding and dynamic, the key is understanding their specific needs and preferences while providing the desired employee experience and careers within the company.”
The Salary Budget Planning Report is an authoritative global study about salary budgets and recruitment compiled by WTW’s Reward Data Intelligence practice. The survey was conducted in April and May 2023. Approximately 33,000 sets of responses were received from companies across 150 countries worldwide. In the Netherlands, 703 organisations responded.
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