🦜 PerchPulse - The Netherlands Market Update January 2023 🦜

A warm welcome to the January issue of PerchPeek’s Netherlands Market Monthly update!

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Here’s where you’ll find the hottest updates around employee relocation and international talent strategy, insights from our experts on housing and cost-of-living news affecting your staff, the latest trends in global mobility, and tips and tricks on ways to support your teams.

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A fly-by summary

●     Rent caps are to be introduced on 300,000 properties in January 2024 - how this could affect your home-hunting employees and global mobility strategy

●     2023 childcare benefit payments to be higher than originally announced, but still not enough to cover rising costs - how to support your employees with children

●     Salary updates: wages rose by approx. 3.2% in 2022, and workers can expect to be €91 better off per month in 2023

●     House-sharing in the Netherlands - how it works and why it’s an attractive option for those on a more modest budget

●     From the cheapest supermarkets to bonus card schemes: how to help your employees save on food shopping!

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Home-finding: Rent caps to be introduced on 300,000 homes in Jan 2024 - how this could help drive your global mobility strategy forward in 2023

As a measure to tackle the crippling shortage of rental properties in the Netherlands, the government has announced that they’ll be introducing rent caps nationwide from January 2024.

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Here’s a summary of the changes to come:

●     Rental prices will be capped on over 300,000 homes to help middle-income tenants

●     The rental price of those properties will be cut by an average of €190 per month

●     The maximum rent of the properties will be approximately €1,100

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While the rent caps won’t be introduced until next year, it’s important to consider the effects the plan may have on the Dutch rental market in 2023, as it’ll impact your home-hunting employees.

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Landlords may take the opportunity to raise rent prices now, making the rental process even more difficult for tenants in the short term. Others may choose to sell up if they feel renting their property will no longer be viable, adding to the shortage of properties.

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On the other hand, future rent caps may positively impact your global mobility strategy. This significant shake-up to such a challenging market could make the Netherlands a more attractive prospect for candidates open to relocating, and therefore drive talent acquisition efforts forward!

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Cost of living: Increased childcare benefits still not enough vs. rising costs

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In our last issue we reported that childcare costs in the Netherlands were to rise by 8.5% in 2023, but child benefit payments helping working parents fund childcare (kinderopvangtoeslag) by only 5.6% - a worrying discrepancy for most families!

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The government has now announced that this allowance will rise by 6.54%, not 5.6%, since inflation has risen over twice as much as previously forecasted. The precise amount parents may receive depends on income and type of childcare.

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Yet it’s still not enough to compensate for rising costs, and it’s important to note that childcare in the Netherlands is already very expensive! According to Numbeo, private preschool costs are on average €1,500 per child per year, versus just €350 in Germany. There are reported plans to reduce Dutch childcare costs significantly, but not until 2025.

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How you can support your employees with children:

●     Make sure they’re aware of the child benefits system and that costs will be increasing

●     Advise where and how to claim benefits, and direct to other helpful resources

●     Review compensation packages regularly to keep in line with cost of living changes

●     Offer flexible and remote working options to help parents juggle responsibilities

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Talent strategy: 3.2% salary growth in 2022, and what’s to come in 2023

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As we get into the swing of the new year, we’re putting the spotlight on some significant updates around salaries and how these impact your employees in the Netherlands.

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Firstly, Statistics Netherlands (CBS) reports that Dutch salaries saw a record rise in 2022, increasing by an average of 3.2% versus the previous year. This is the highest rise since 2008.

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However, this increase still hasn’t been enough to compensate for rising living costs. With inflation reaching 10% in 2022, workers have ended up worse off in real terms. Now labour unions and the Dutch national bank are pushing for salaries to be increased further.

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Secondly - and on a more positive note! - 2023 tax system changes mean workers in the Netherlands will see their income increase by about €91 per month (based on those earning €3,086 per month - gross) according to payroll service provider ADP. 

These changes include increases in:

●     Labour tax credit

●     Tax-free travel allowance

●     Home working allowance

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Our advice is to make employees aware of tax changes and how they’ll benefit, and to review compensation packages regularly to ensure they're competitive and sufficient for a good standard of living during challenging times of high inflation.

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Home-finding: House-sharing - why it’s a great option for staff moving solo, and the pitfalls to avoid

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It’s important to be mindful of the extra challenge posed to employees relocating solo. PerchPeek’s Netherlands experts note that the monthly rent for a decent one-bedroom apartment has risen to €1,700 per month - of course, much more of a stretch when being funded by one salary as opposed to two!

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To get around this challenge, house- or flat-sharing could be an attractive option for your staff. As well as being a cheaper alternative to renting a whole property, having company at home might make it easier for newcomers to settle in. It may be invaluable to share the relocation experience and compare notes with someone who’s in the same boat!

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However, for three or more adults sharing, caution is advised. In the Netherlands these rules are quite strict - landlords must have a permit, and the property needs to be purpose-built, not a conversion. To keep things easier, it’s best to advise employees to stick to flatshares of two.

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To support staff relocating solo - especially junior employees on a modest budget - make sure they’re aware of Dutch restrictions around property-sharing (as it’s likely to be different from their previous experiences), and to help them buddy up for a flatshare!

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Support your talent: How to help your employees economise on food

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As we all know, the cost of food has risen significantly. Statistics Netherlands (CBS) states that food prices rose by a whopping 14 per cent year-on-year in 2022. And of course, groceries here were relatively expensive to begin with, which may be a shock to newcomers!

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Here are PerchPeek’s tips and tricks on how you can help your relocating employees save money on food and other staples in these trying times:

●     With many supermarkets to choose from, new arrivals to the country won’t be sure where to find the cheapest deals on food. We recommend Dirk (120 stores nationwide) and discount supermarkets Aldi and Lidl.

●     The biggest, best known chains Albert Heijn and Jumbo are more expensive on average (especially AH). However, both offer bonus card schemes (Albert Heijn Bonuskaart and Jumbo Extra’s), meaning there are still good deals to be had!

●     Shoppers should avoid smaller, ‘express’ versions of larger supermarket chains if possible, such as Albert Heijn To Go, since prices are higher than in larger branches.

●     Employees may like to know about apps like Too Good To Go. Users can purchase food items that are about to expire, and pick up at a time that suits them.

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We hope you enjoyed this month’s update, and that your 2023 is off to a great start!

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If you have any feedback, comments or questions about what's happening in your location, feel free to reach out via the form at the bottom of this page.

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Thanks for reading, and see you next month!

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