The social balance sheet 2003

The first part of the article sets out the provisional results of the analysis of the social balance sheets for the year 2003. Since not all the social balance sheets are available for that year as yet, the study is based on a reduced population constructed according to the constant sample principle, comprising 40,630 enterprises employing around 1,372,000 workers in 2003. The main results of the analysis of that reduced population are as follows. Employment declined at an annual average rate of 0.8 p.c. in 2003, but the rate of job losses slowed down slightly at the end of the year. While the number of full-time workers declined, the number of part-timers increased once again. Net staff departures slowed down between 2002 and 2003, particularly in the case of workers with primary or secondary school level skills. On the other hand, net recruitment of highly skilled staff remained below the levels recorded the previous year. Results confirm that employers have tried to use the most socially acceptable ways of implementing job cuts, as there was only a small rise in redundancies between 2002 and 2003, in contrast to the numbers taking normal or early retirement and the numbers whose fixed-term contracts were not renewed. At the same time, there was little change in the structure of employment by type of contract, where permanent contracts predominate by a long way, as the numbers of both fixed-term and permanent contracts declined. On the other hand, there was an increase in the use of agency workers, providing evidence of the steady improvement in the situation of enterprises in the reduced population. Staff costs were up by 1.6 p.c. between 2002 and 2003. Since employment in terms of full-time equivalents (FTEs) was down by 1 p.c. on average and the working hours per FTE remained unchanged, costs per hour worked increased by 2.7 p.c. Regarding the training policy, participation rates stagnated in 2003, as did the percentage of working hours devoted to acquiring skills or keeping them up to standard. The indicator of the amount spent on training declined : it represented just 1.2 p.c. of the wage bill. This renewed fall negates the efforts made here in the late 1990s, so that altogether, between 1998 and 2003, there has been no progress towards the objective of 1.9 p.c. fixed in the 1998 interprofessional agreement. The second part of the article analyses the characteristics of the enterprises according to their geographical location ; firms operating in only one region were distinguished from those with establishments in more than one region. In the latest case, the social balance sheets were allocated into the three regions of the country according to the one in which the largest number of jobs was recorded by the National Social Security Office. The analysis presented is an initial appraisal of the regional characteristics of firms which have to submit a social balance sheet. The average working hours recorded in the six groups of enterprises, namely single-region and multi-regional enterprises operating in Brussels, Flanders and Wallonia, reflects the differences in the structure of activity, since working hours within the actual branches of activity are relatively uniform in the different regions. That is less true of staff costs, in any case for single-regional enterprises, as hourly costs are systematically lower in Wallonian enterprises, for each branch of activity, and higher in Brussels enterprises, even though the firms are of the same average size. As regards the training policy, single-regional Wallonian enterprises are still lagging behind their counterparts in the other two regions, despite the progress made in terms of participation rates. For multi-regional enterprises, the weaker results in Wallonia are probably due in part to the smaller average size of the firms, and the preponderance of industrial enterprises. The latest devote fewer resources to their training policy than the financial, real estate and business services branches, for example, which account for 55 p.c. of the staff employed by Brussels multi-regional enterprises, and than the trade, transport and communications branches which represent over half of the workforce of multi-regional enterprises in Flanders.employment, staff costs, vocational training, working hours employment contract, full-time, part-time, region

Poverty in Belgium

The EU Statistics on Income and Living Conditions (SILC) surveys gives a harmonised source of data making it possible to get a good idea of inequality and poverty, at both the Belgian and European levels. Disposable income distribution appears to be slightly more egalitarian in Belgium than the EU15 average, and around 15 p.c. of the population lives below the poverty line in our country, compared with 16 p.c. in the EU15 as a whole Poverty can be defined in many different ways. The rate of monetary poverty corresponds to the percentage of the population with an income below the poverty line. The European Union has conventionally set this threshold at 60 p.c. of the median income. Other approaches (such as that based on material deprivation and the subjective approach, subjective in the sense that it relies on the personal perception of the people being surveyed) contribute to a better understanding of the true nature of poverty but they are not a perfect match. The perceived rate of poverty is thus higher in Belgium and France than the poverty rate based on relative income, whereas the reverse is true in the United Kingdom. The monetary poverty indicators calculated on the basis of the SILC surveys are given preference in this article, even though they are not immune to problems. In particular, disposable income as calculated from the SILC surveys does not take account of several components, including the imputed rent for households that own their home. For households with members of working age, employment offers good protection against poverty, provided a high enough number of hours are worked at an adequate wage level. In Belgium, the minimum wage tends to limit the number of working poor. So, households with a full 100 p.c. work intensity rate in our country enjoy the lowest poverty rate in the EU15, regardless of whether or not they have children in the home. Single parents make up the category of households at the highest risk of poverty. The proportion of retirees living below the poverty line is also higher than that among the population of working age. The situation as regards the elderly nevertheless needs to be put into perspective because proportionally more of these people own their home than among the rest of the population. Education is a key factor for employment. A high level of education goes hand in hand with a lower likelihood of both falling into poverty and remaining poor for long periods of time. Ensuring access to quality education for all is thus essential for promoting equal opportunities. Longitudinal data show that, at any given moment, a large number of people are falling into or getting out of poverty. By comparison with other European countries, Belgium has a very low poverty entry rate, but it also has a fairly low poverty exit rate.poverty, SILC, Belgium, EU

The social balance sheet 2005

Each year, the National Bank examines the provisional results of the social balance sheets of Belgian enterprises. As the social balance sheets are not yet all available for 2005, the study is based on a limited population of enterprises, compiled according to the principle of a constant sample. This population is made up of 48,976 enterprises employing around 4,441,000 workers in 2005. The main results of the analysis are as follows. As an average, employment increased by 0.5 p.c. between 2004 and 2005. Although the year-end growth rate was also 0.5 p.c. for these two years, the rate of increase in the volume of labour expressed in full-time equivalent slowed down during the year. Net staff recruitment also declined during 2005, falling to only half the previous year’s level. In fact, employment expanded in small and medium-sized enterprises while large companies recorded staff cuts. In industry, the workforce contracted once again. It remained stable in trade, transport and communications whereas it increased in the other branches, especially in other services and construction. The female workforce grew by around 8,400 units between year-end 2004 and 2005, representing 37.7 p.c. of total employment at 31 December 2005 ; the number of male employees declined by around 1,400 units. Net staff recruitment is proportionately greater for full-time workers. However, because of the changes in the working arrangements of existing staff, the rate of part-time working increased by almost 4 p.c. Part of this rise is due to the development of the time credit scheme, increasingly used to reconcile work and family life, but also to facilitate the transition between working life and retirement. Enterprises filing full-format accounts supply more details on staff movements during the year. There has been an increase in the number of workers with higher education qualifications, while the number of staff with low and medium skills has declined. However the majority of the workers taken on still fall into these last categories of staff. New part-time employees have lower qualifications than those recruited as full-time staff. The male full-time workers recruited are on average less skilled than new female full-time workers. Despite the large net intake of temporary workers, the total for the latter varies only very slightly, since some of these workers are offered a permanent contract while other temporary jobs are subject to a high rate of turnover. However, the turnover of employees on permanent contracts is also quite significant, since 12.8 p.c. of them left their employer in 2005. Finally, the number of staff leaving declined between 2004 and 2005, mainly because of a reduction in the use of early retirement schemes and redundancies. The full-format accounts also contain information on the use of agency workers and persons on secondment from an outside firm. It is therefore possible to assess the relative importance of all temporary contracts which, in these companies, altogether represent 9.2 p.c. of workers. Small organisations use more agency workers, while larger ones prefer fixed-term contracts. Manufacturing industry and the construction sector use primarily agency workers while the service branches make more use of fixed-term contracts. Persons on secondment and substitution contracts are found mainly in the service branches. Hourly labour costs increased by an average of 3.6 p.c. between 2004 and 2005 in enterprises of the limited population. The article shows that, while the level of hourly labour costs differs significantly between branches, the dispersion of these costs is also considerable : the ratio between the average costs recorded in firms with the lowest costs and the average calculated for those with the highest costs varies by a factor of 2 to 5 between branches. Finally, in regard to training, the financial effort indicator declined once again in 2005. The training budget is estimated to be 1.05 p.c. of staff costs in 2005, against 1.13 p.c. in 2004 and a peak of 1.42 p.c. in 2000. However, there was a slight increase in the rate of employees’ participation in training : 36 p.c. of workers had access to training in 2005, one percentage point more than at the beginning of the decade. These performances still fall well short of the targets set by the inter-generation solidarity pact adopted at the end of December 2005, which – in line with earlier agreements – stipulates that the first indicator should reach 1.9 p.c. in 2006 and the second 50 p.c. by 2010.employment, staff costs, training, working hours, employment contract, full-time, part-time, skills, temporary worker

Results of the Bank’s survey of wage-setting in Belgian firms

The analysis presented is the outcome of a survey conducted by the Bank and forming the Belgian component of an initiative launched by the Wage Dynamics Network (WDN), in order to accompany the empirical analysis based on individual employees’ wage data obtained, for instance, from administrative data banks. The survey contains questions on the wage-setting process, the existence of downward rigidity and the reasons for it, the reaction of firms to shocks, and the frequency and timing of wage and price adjustments. The survey reveals that almost all firms in Belgium are covered by a sector agreement, and just over a quarter apply an additional collective wage agreement at the firm level. Such firm-level collective agreements are more common in large firms. The results also show that just over half of firms apply a wage indexation mechanism with a threshold index, while just under half operate in an environment where indexation takes place at fixed intervals. The latter system is more common in large firms, so that the weighted results indicate that this mechanism applies to the majority of employees. The level of wages of new employees depends mainly on what is specified in collective agreements and on the wage level of comparable employees in the firm. However, the wages which the firm actually pays to its staff may deviate from the pay scales specified in the sectoral agreements. In a significant number of firms, especially for white-collar workers and skilled staff, actual wages paid exceed the sectoral pay scales. Such a wage cushion, forming a buffer between the actual wages and the collectively agreed lower limits, is more common in large firms. Overall, firms seldom respond to adverse shocks by cutting basic wages or using alternative ways of reducing labour costs per employee. Certainly in large firms, costs are reduced mainly via the employment channel, i.e. by reducing the number of primarily permanent staff, and to a lesser extent temporary workers. Reductions in non-wage costs are also important, while variable pay components are only cut in a small number of cases. Only a quarter of firms state that they adjust their prices more than once a year. Time-dependent price adjustments, in which the time of the adjustment does not depend on economic conditions (as opposed to state-dependent adjustments), occur in 22 p.c. of firms and are noticeably common in the business service sector. Combined with the low frequency of price adjustments, this indicates price rigidity in that sector. The frequency and timing of wage adjustments are closely linked to the indexation mechanism applied. Most firms adjust their wages no more than once a year. Time-dependent wage adjustments in a specific month apply to 61 p.c. of firms, and – like price adjustments – wage adjustments are concentrated in the month of January. Another peak occurs in July, and there is some concentration at the beginning of the second and fourth quarters, particularly in the case of wage adjustments.Survey, wages, prices, employment

The social balance sheet 2008

There was an average annual increase in employment of 1.7 p.c. in 2008, according to the statistics gleaned from a reduced population of enterprises that filed their social balance sheet by 16 September 2009 at the latest. End-of-year results (+0.8 p.c.) point to a significant slowdown in growth during the course of the year, reflecting the economic downturn which began at the end of 2007. Full-time staff numbers stabilised, but the number of part-time workers continued to grow. The expansion of this part-time working arrangement is not only attributable to the recruitment of workers on shorter hours ; shifts between full-time and part-time working arrangements have also been observed, especially in large firms that have restructured. As a result of the economic downturn, the share of temporary work has fallen. In firms filing a full-format social balance sheet, a reduction in the use of temporary agency workers has also been noted. The overall wage bill in the firms included in the reduced population grew by 5.3 p.c. in 2008. At the same time, the volume of labour expanded by 1.6 p.c., so that costs per hour worked increased by 3.7 p.c. on average. This article includes an assessment, by branch of activity, of how closely the indicative wage norm set for the period 2006-2008 has been followed. This survey was carried out on the basis of a population of firms that had filed a social balance sheet for the three consecutive years. For the first time ever, thanks to the introduction of a new version of the social balance sheet, it has been possible to have a breakdown of staff numbers by educational level. On average, women tend to have a more intensive level of training than men. Workers’ educational requirements vary considerably according to the branch of activity. Since the year 2008, training activities have been broken down between formal and informal vocational training and initial training, whereas before only formal training and a very small proportion of informal training had been taken into account. Participation rates for these three types of training come to respectively 37, 21 and 1 p.c. of the workforce. Budgets for training accounted for a total of 1.7 p.c. of staff expenses, including 1.2 p.c. for formal training alone, which is still well below the target for the private sector that had been set at 1.9 p.c. for 2006. Major differences in training policy can be observed in firms classified by size and branch of activity, whether it is a question of ranging from the volume of training activities, the size of budget, or type of training selected. An analysis of individual data shows that the probability for an enterprise to provide formal or informal training depends above all on its size, with the branch of activity ranking second. Whether it is linked to a non-resident firm and the composition of the workforce (notably the relative share of staff with higher education qualifications) also play a significant role. Within firms that do offer training, the dispersion of training costs depends very much on firm-specific factors, which cannot be taken into consideration by a general model.employment, staff costs, training, working hours, employment contract, full-time, part-time, skills, temporary worker

The social balance sheet 2006

According to the 2006 social balance sheets of Belgian enterprises, employment on average increased by 1.3 p.c. between 2005 and 2006. It expanded mainly in small and medium-sized enterprises while remaining unchanged in large companies. Employment grew in all branches of activity except in industry. A marked rise was recorded in the number of part-time workers, too. Consequently, the part-time employment rate increased again, the rise being especially strong for the male workforce. Staff movements were larger than in 2005, but net recruitment fell to only half of the previous year’s level. A strong increase in the staff turnover rate was observed in some industrial branches. Hourly labour costs rose by an average of 3.1 p.c. between 2005 and 2006, to 33.1 euro. Their level differs significantly between enterprises according to their branch of activity and their size. Labour costs are higher in enterprises operating in several regions than in single-region firms. In the latter, hourly labour costs are weaker in Wallonia than in the two other regions. Performance in the field of training still fell well short of the targets of 1.9 p.c. in 2006 for the financial effort indicator and 50 p.c. by 2010 for the employee participation rate. The first indicator, that is, the training budget as a percentage of staff costs, was estimated at 1.2 p.c. in 2006. There was a further but small increase in the rate of employee participation in training : only 36.4 p.c. of workers had access to training in 2006. In Wallonia, the percentage of training firms is lower and the indicators calculated solely for training firms remain systematically weaker than in Brussels and Flanders. Finally, the Belgian results of the Continuing Vocational Training Survey (CVTS) for 2005 were compared with those of the social balance sheets. The proportion of training firms is far higher in CVTS, probably because of the intensive follow-up provided to firms involved in the survey. On the other hand, the worker participation rate and the time spent on training as a percentage of working hours are similar in both statistics. As for the financial effort indicator, the results are very different, respectively 1.6 p.c. in CVTS and 1.3 p.c. in the social balance sheets, while they were quite similar in 1999 when the previous survey was carried out.employment, staff costs, training, working hours, employment contract, full-time, part-time, skills, temporary worker

The social balance sheet 2007

According to the results of the social balance sheets available in September 2008, employment rose by 2.3 p.c. in 2007. The increase concerned both full-time as well as part-time workers. The rise in part-time working is only partially explained by the hiring of part-time workers : this year again, medium-sized and large enterprises also saw numerous changes in working arrangements. Although women still account for the bulk of part-time workers, the increase in the part-time rate was greater for men than for women. The analysis shows that part-time working is spread unevenly in the various branches of activity. As in previous years, the article studies staff movements and the characteristics of workers joining and leaving companies filing full-format accounts. It also examines reasons for leaving and the external turnover of workers by comparing the results from the various groups of enterprises categorised according to their size or their branch of activity. The analysis also highlights the further advance in 2007 of temporary employment contracts – whose proportion is tending to become more uniform in the various categories of company size – and the increased use of agency work in companies filing full-format accounts. Recourse to these contracts as instruments for workforce adjustments varies considerably from one branch of activity to the other. The total wage bill rose by 5.1 p.c. between 2006 and 2007 in the reduced population of companies. Over the same period there was a 2.3 p.c. growth in the number of hours worked, so that hourly labour costs grew by 2.8 p.c. on average. The rise was more pronounced for full-time than for part-time workers. Major differences in levels are still discernible in terms of hourly costs, depending on the size and branch of activity of the companies. In terms of training, the results for 2006 still fall well short of the set targets : training costs accounted for 1.17 p.c. of the total wage bill whereas the target specified in the Generation Pact for this same year was 1.9 p.c. At the same time, the participation rate in training was only 35.2 p.c. whereas a target has been set of 50 p.c. by 2010. Growth was nevertheless recorded between 2006 and 2007 within a favourable economic context : the cost indicator for training grew by 4 p.c. and the participation rate by 0.2 p.c. If these increases were applied to the level observed in 2006, these same indicators should amount to 1.22 and 35.3 p.c. respectively for 2007.employment, staff costs, training, working hours, employment contract, full-time, part-time, skills, temporary worker

Downward Wage Rigidity for Different Workers and Firms: An Evaluation for Belgium Using the IWFP Procedure

This paper evaluates the extent of downward nominal and real wage rigidity for different categories of workers and firms using the methodology recently developed by the International Wage Flexibility Project (Dickens and Goette, 2006). The analysis is based on an administrative data set on individual earnings, covering one-third of employees of the private sector in Belgium over the period 1990-2002. Our results show that Belgium is characterised by strong real wage rigidity and very low nominal wage rigidity, consistent with the Belgian wage formation system of full indexation. Real rigidity is stronger for white-collar workers than for blue-collar workers. Real rigidity decreases with age and wage level. Wage rigidity appears to be lower in firms experiencing downturns. Finally, smaller firms and firms with lower job quit rates appear to have more rigid wages. Our results are robust to alternative measures of rigidit