In recent years Dutch employers have had a fickle relationship with temporary staffing. But in 2022 it is clear that employers are favouring hiring permanent employees for their businesses, as opposed to temporary employees and contractors. Undoubtedly this is a long-term solution to retain talent, as people often value the security offered by a permanent role during uncertain times. However it isn’t always the right decision for every business.
Recent history of the Dutch labour market
To understand the implications of the current talent shortage in the Netherlands, we must review recent history. Back in 2007, labour market economists and policymakers were concerned that there would be shortages of workers in the Netherlands. The Maastricht research institute ROA predicted there would be a shortage of workers in sectors such as construction, finance, accounting and healthcare. They anticipated this shortage would continue to grow until at least 2012. However, the 2008 financial crash completely upturned all predictions from professionals.
Likewise, the pandemic tore through any predictions the economists had to offer. Throughout 2019, the Dutch economy was doing extremely well. Every organisation had huge growth plans and expected to report hefty profits. Much like the rest of the world, nobody expected the whole country to go into lockdown three months later, but it happened and had a huge impact on society and the economy.
Like many global economies during the pandemic, the Dutch economy experienced an extraordinary 3.7% contraction of gross domestic product (GDP) in 2020. However, 2021 painted a much brighter picture, particularly when you consider the Dutch private equity market, which is scorching hot. With the first three quarters of 2021 being the best environment for PE deal making ever, and this form is anticipated to continue well into 2022.
Dutch economic landscape in 2022
Perhaps drawing upon the 2008 financial crash and the COVID-19 pandemic is too extreme. But can a world defining event happen again in quick succession? I hope not, but I think everyone agrees that we are in an intense period of uncertainty. Whilst the Dutch economy is breaking records: record low unemployment rate, record breaking stock market, and record-breaking housing prices, there are a number of economic factors which could stunt our economic outlook.
According to the Institute of International Finance, global debt rose to record levels in 2021. In total, $303 trillion (€268,000 billion) worth of loans were outstanding from companies, households and governments. This represented an increase of $10trillion dollars from a year earlier. Also, during a press conference, the President of the European Central Bank, Christine Lagarde, talked about a sky-high inflation. Earlier this year, inflation in the Eurozone rose to 5.1%, a new record. But in the Netherlands, inflation is even higher at 7.6%. Certainly, this will have a tremendous impact on the disposable income available to consumers and the wider economy.
Moreover, experts warn that the cost of living and inflation are only going to intensify. Especially when you consider the impact of the conflict between Ukraine and Russia.
