While corporate restructurings have dominated the news for the past month, the bigger picture is actually more nuanced. Belgium is witnessing net job creation but nevertheless faces multiple challenges linked to its willingness to adapt.
Grim headlines – 7,803 job losses have been announced since September 1 – have monopolized the news recently. Many workers across a spectrum of sectors, from the industrial to the financial services and agencies, have been hard hit. These restructurings demonstrate Belgium’s need to reform and adapt in order to prosper in an international and domestic fast-changing environment.
Recent restructurings in the banking and insurance sectors underline the urgency of implementing Belgium’s Digital Agenda. With digital disruption also comes opportunity for growth: investment in digital economy is projected to create 300,000 jobs in Belgium by 2020, according to the Boston Consulting Group. As the skills and competencies required by employers change, workers may need to retrain and reskill through lifelong learning programs in order to successfully (re)integrate into the labor market. Education and training systems must be continuously and swiftly updated in line with job market needs.
The manufacturing industry is also struggling with the changing times. Creating an ecosystem in which manufacturing companies are embedded is key to keeping production and jobs in Belgium. Binding headquarters, R&D, production, logistics and distribution with manufacturing activities can help foster interdependency and growth in a competitive global market.
Longstanding concerns also come at play in Belgium’s economic sectors. For example, labor costs have long been a hindrance to developing business and employment in the country. Government measures, such as reducing social security contributions to 25%, help create jobs – and this is reflected in the figures. The year 2016 is actually one of net job creation: according to the National Bank of Belgium, 42,800 net jobs will be created by the end of the year.
Reforms need to continue. AmCham Belgium encourages the government to continue closing Belgium’s wage gap with neighboring countries, reforming social charges and promoting a flexible labor market as these measures will spur job growth. A complementary measure to attract investments to Belgium, and therefore create more employment, is to lower the corporate tax rate to 20%.
Multiple company restructurings have overshadowed the undeniable net creation of jobs in Belgium. To improve Belgium’s employment situation in the long run, labor costs and corporate tax rate must be lowered and fully embracing digital skills and company ecosystems should be a top priority. AmCham Belgium looks forward to working with the different governments and other stakeholders to design policies that will further attract and retain foreign investment and decision centers, and therefore employment in Belgium.