Spring/Summer 2024 Netherlands Labour Market Analysis: Navigating Increased Workforce Complexities

The Dutch economy is off to a bit of a rocky start so far this year, with Statistics Netherlands (CBS) reporting that 10 of the 13 factors in its Business Cycle Tracker performed below long-term trends in March 2024. With a variety of workforce laws and regulations to grapple with and slow economic growth expected the rest of the year, Dutch organizations are facing many challenges, but opportunities also abound in the potential to leverage technology/AI, data and analytics, and Managed Service Provider (MSP) partners to increase visibility into the workforce, navigate regulatory complexities and optimize talent management.

Our comprehensive "Spring/Summer 2024 Europe Labour Market Report” explores the intricate dynamics shaping the European market, including the Netherlands. Here’s a high-level look at the Dutch landscape:

Macro Environment

As of 2023, the Netherlands maintains a robust net employment rate of 73%, with a slightly higher rate for men (76%) than women (68%), reflecting the prevalence of part-time work. Gross domestic product increased by 0.1% in 2023 compared to 2022, with the slight economic growth attributed to increased household consumption and positive contributions from trade, investment, and public consumption. The unemployment rate also increased slightly from 3.5% in 2022 to 3.6% in 2023.

Various factors pose potential problems, including cooling global trade, geopolitical uncertainties, and domestic issues like the housing market downturn and nitrogen emissions problem. High inflation and a tight labour market also impact economic growth adversely.

The 18- to 25-year-old group has been most affected, with unemployment rising from 8.2% to 8.7%. In contrast, the rest of the population maintains an unemployment rate below 3%. Despite this increase, the Netherlands still boasts one of the lowest unemployment rates in the European Union.

Skills in Demand

In the Netherlands, employers highly value individuals with strong technology skills, such as AI, blockchain and data engineering. Proficiency in using open-source tools and LLM models is a key requirement. Also, knowledge of international law and the ability to automate legal processes are increasingly in demand. Other high-demand/desirable traits include:

• Familiarity with financial matters, including knowledge of new tax rates
  
• HR/recruitment skills
• Adaptability to a flexible work environment that includes both office and remote settings
• Expertise in green and clean technology
• Multilingual proficiency

In various industries, such as high voltage, the market is very tight and there are too few well-trained people. Candidates with the above attributes are well-positioned to meet employers’ demands.

Other Trends

The Dutch government's resignation in 2023 has cast doubt on planned labour market reforms, including changes to on-call contracts and fixed-term contracts. A decision on these reforms is pending in the House of Representatives, adding uncertainty to the Dutch labour market. In addition, two key legislative proposals have the potential to significantly impact the Dutch labor market in 2025:

• Clarification of Assessment of Employment Relationships and Legal Presumption (VBAR): Recently introduced by the Minister of Social Affairs and Employment in the Netherlands, this proposal addresses the ambiguity in distinguishing between self-employed individuals and employees.
• Authorisation for the Posting of Workers Act (WTTA): This proposal introduces an admission system with the aim of improving compliance with existing laws and regulations when hiring contingent workers via temporary work agencies.

For more on upcoming changes to Dutch workforce legislation, including key takeaways that organisations should consider, download Magnit’s “Q1 2024 Regulatory Newsletter.”

Get the Full Report

Our new “Spring/Summer 2024 Europe Labour Market Report” also includes bill rates for key job titles in the Netherlands, as well as exploration of high-level trends across Europe. Beyond this broader analysis, we also dig deeper into the economic landscape in the UK, Ireland, Sweden, Switzerland and Germany. For much more, download the report now.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.