For almost thirty years, the relationships on the Dutch labor market were very clear. Employers and clients were in charge on all fronts. They determined the salaries and whether someone was given a permanent contract or stuck in a series of temporary contracts or hiring assignments. Even in times of economic boom, there was more than enough supply to absorb demand. More women went to work, the retirement age rose and more jobseekers came from within the European Union.
The result: very limited wage increases and an increasing group of workers who were forced to be self-employed. Companies could easily get rid of this staff, despite many attempts by successive cabinets to introduce stricter regulations. Companies had the great advantage that this allowed them to move relatively smoothly with the economy.
That luxury position now seems to be over. The shortage on the Dutch labor market remains unprecedentedly high, according to figures presented by Statistics Netherlands (CBS) on Tuesday. “After a slight easing in the third quarter, the labor market tightened slightly again in the fourth quarter of 2022,” writes CBS. There were 123 vacancies for every 100 unemployed, which means that there is much more demand than can be filled by the current supply.
The fear of a recession, which has certainly increased since the war in Ukraine, has not translated into a contraction in the labor market this time. The reverse even. Last year, 441,000 jobs were added in the Netherlands (full-time and part-time), bringing the number to more than 11.5 million jobs at the end of 2022. Calculated from the third quarter of 2020, the growth amounts to 956,000 jobs.
Organizations now have to make a lot more effort to recruit staff, temporary employment agency Randstad also notes on Tuesday the results for 2022 brought out. With a turnover increase of 12 percent to 27.6 billion euros and 18 percent growth in gross profit to 5.8 billion euros, chairman of the board Sander van ‘t Noordende was satisfied with the results, although demand for temporary employment services declined in the fourth quarter , including in the United States. According to Van ‘t Noordende, American employers now more often offer their temporary workers a permanent job because they are otherwise afraid of losing that staff. According to the Randstad CEO, the reports of mass layoffs at companies such as Meta (Instagram, Facebook) and Amazon are limited to the tech sector and are a result of exuberant recruitment during the corona period.
There were 123 vacancies for every 100 unemployed
Temporary workers are also more often offered a job in the Netherlands. But there are also more and more working people who give up their job through the employment agency – or their permanent job – to do the same work as a self-employed person. CBS reports on Tuesday that in the fourth quarter the group of flex workers who switched from on-call or temporary worker to self-employed person increased by 70 percent compared to the same quarter last year, to 16,000. According to Randstad Groep Nederland, which held a presentation on the Dutch labor market in addition to the group results on Tuesday, there are now about 1.2 million people who work as a self-employed person. Strong growth has been seen in healthcare, IT, management and logistics in particular.
Hardly any rights
“From that employee in care you understand the transition to the self-employed. You get paid better and you can organize your work yourself. But for the employer, the costs go up. And the workload of other colleagues too, because they have to keep filling the rosters,” says Jeroen Tiel, CEO of Randstad Group Netherlands.
The FNV trade union is also not enthusiastic about this development: “It is too crazy for words that you can still be employed one day, for example in healthcare, and start at the same workplace as a self-employed person the next day,” says the FNV in response to the CBS figures. The union is concerned about the appeal of this construction to young people: you get more money in your bank account, but you hardly accrue rights.
“The direction on the labor market is lost,” says Tiel. In itself there is nothing wrong with the self-employed contract form, “but there are now too many adverse consequences, for example that an increasing group of people is less insured and that young people certainly do not build up a pension either.” Like the FNV, he wants the cabinet to ensure that there is clarity about what is and what is not allowed.
Will the labor market expand again in the coming years? “No, the growth in the number of workers will not keep up with demand,” says Tiel. If no solution is found, this will be at the expense of the productivity of companies and the growth of the Dutch economy. Like employers’ association VNO-NCW, Tiel sees the greatest benefit in robotization, attracting employees from abroad and better deployment of people with a distance to the labor market. “What we now see in practice is that companies bring in scarce personnel before they really need these employees.” For example, payment platform Adyen announced last week that they are now investing extra in staff, with a view to future growth. Tiel: “That is actually a form of hoarding”.