So the deficit could be even bigger. While it was already difficult to keep schools open five days a week, deliver the newspaper and run trains, now it appears that the demand for staff has increased even further in the past quarter.
There are now more than 1.4 vacancies for every unemployed person, according to new figures from Statistics Netherlands (CBS). In the first three months of this year, there were still 1.3. That was already unique: there are usually more unemployed than vacancies.
Also read: Why staff are scarce right now
Almost all entrepreneurs – 84 percent – suffer from the staff shortage, according to a CBS survey. Entrepreneurs are seeing an increase in staff workload almost everywhere. The number of vacancies rose by 44 percent to 467,000 last year. These are golden times for job seekers.
But for how long?
Economists warn of a contraction in the economy in the second half of this year. The United States has already entered a ‘technical recession’: two consecutive quarters of economic contraction. A recession can lead to job cuts or even layoffs. Entrepreneurs could already delete vacancies: how smart is it to recruit staff if you expect an economic contraction?
It is far from that, entrepreneurs think. For them, layoffs feel a long way off, even if a recession comes. They now have an acute problem: they have too few staff to handle all the demand.
Anything to attract staff
Retailers are more concerned about whether they can remain open on late night shopping and on all weekdays, says director of branch organization INretail Jan Meerman. He sees “no reluctance” on the part of shop owners to hire people. They pull out all the stops to attract staff: higher wages, permanent contracts and plenty of room to combine work with life outside of it.
Companies are not guided by abstract warnings about the economy, says Olaf van Vliet, professor of economics at Leiden University. “They mainly look at their own figures, their own growth and their own expectations.”
And they show that there is still plenty of consumption. There are more companies that saw too much demand for their products or services in July (over 17 percent) than companies that saw too little demand (8 percent), according to CBS. And only 1 in 7 businesses expect demand to decline in the coming quarter.
The technology industry is mainly “at a disadvantage” due to staff shortages, says a spokesperson for trade association FME. So no, she says: “We in no way expect the demand for staff to decline.”
The so-called ‘business confidence’ was still positive in July, according to CBS. but it did fall, most strongly in the hospitality industry. “In a recession, people are the first to save on more luxurious things such as the catering industry,” says chairman of Koninklijke Horeca Nederland Robèr Willemsen. “Then we will make less turnover, while costs continue to rise.”
But are you already anticipating a possible recession in personnel policy? He doesn’t see catering entrepreneurs doing that. “They are really not going to say: I don’t want any problems in six months, so I won’t hire people for a while.” Because the consequence of this is clear: staying closed more often.
Even if the economy starts to shrink, it doesn’t have to affect the labor market directly, says Van Vliet. “We’re seeing that now in the US: two quarters of contraction, and yet they added a record number of jobs last month.” The explanation: even if consumption decreases, the staff shortages will not disappear immediately, they will at most become smaller.
hoarding
In addition, employers are always reluctant to send staff away during an economic downturn. That’s called labor hoardingie: hoarding staff. “Employers still remember how much cost and energy they have invested in recruiting and training new people,” says Van Vliet. “Before they start firing people, they will first see the cat out of the tree.”
Moreover, you also need “good people” in a recession, says catering man Willemsen. Especially in a sector that is so focused on service. “I think it is wise to invest in staff.”
This does not mean that every entrepreneur can keep his staff. That will depend on how strong the economic downturn is, and what kind of business it is. Van Vliet: „Large companies can more easily suffer losses and take out substantial loans. It is different for small companies.”
In addition, entrepreneurs will have to repay their deferred taxes for the past corona years from 1 October. That can weigh heavily on entrepreneurs, says INretail director Meerman. “If consumers start spending even less, it will be a difficult autumn for retailers.”
Meerman thinks that perhaps one in ten stores will close soon. You can see that as bad news – these stores are not profitable – but it is good news for the remaining shop owners: they will be freed up staff. “This makes the problem a little more manageable.”
A version of this article also appeared in the newspaper of August 17, 2022