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© Sculpture: Jos Dirix
© Sculpture: Jos Dirix

Decreasing flexibility in the labour market?

Pieter de Kiewit 04-09-2020 12:15 PM
Categories: Labour Market, Treasury

In a very short period of time three treasurers, who worked on an interim assignment through our services, were hired by our client on a permanent contract. As we do recruitment for both interim as well as permanent roles, this is not an issue for us: the solution the client and candidate are happy with, is the best one. But this does not happen too often. Does this indicate a shift in labour market relations or is it just a coincidence? Team Treasurer Search brainstormed and came up with the following.

Flexible labour relations have been a hot topic in (Dutch) politics for a long time. On one hand you have politicians who facilitate free entrepreneurship. Their politics include tax deductions for small & starting entrepreneurs, making it easy to let employees go and allow temp agencies & payrolling companies to operate the way they do. On the other hand you have politicians that worry about retirement plans, disability plans and too low payments for people who have a weak position in the labour market. Not to mention missed tax income.

Without being comprehensive in our analysis, we see that the market works well for many but also too many examples of things going wrong. For example, the tight labour market for teachers and nurses combined with fiscal rulings creates a flow of employed steering into being a contractor (ZZP-er) creating a lot of extra cost at the tax payers expense and unstable hospitals and schools. Meal delivery employees are doing their work uninsured, not contributing to a social system that is built upon solidarity.

Back to our three candidates. This is what is what happened:

  1. A seasoned interim manager with a very long track record stepped into an opening created by a treasurer suddenly leaving. Plan is to stay until replacement is found. The client and the candidate loved working together. The client wanted to save cost, the candidate was open for “a last longer stint” in his career and they decided to stick together;
  2. A multi billion company was carved out from an even larger one, a new headquarter is established. Many consultants and interim managers help to build. Most of them leave at the end of the building process, some of them stay. As the labour market is uncertain in covid-19 times, candidates are more keen to stay. As the client is looking for stable and more affordable solutions, a permanent contract is better. Parties find each other;
  3. An exotic company establishes an entity in The Netherlands, facilitated by consultants and auditors. To create a more stable, cost effective solution, the company recruits also using a payrolling solution. A candidate from an even more exotic country joins her spouse who already works in The Netherlands. To get to know the Dutch labour market, she chooses a flexible solution. After a trial period, both parties know they want to continue with each other, an agreement is reached.

Overseeing this and other cases, I think the basis is a fairly simple one. Flexibility is available at higher cost. But also in parallel, the price depends on supply and demand. With candidates I observe (due to covid-19) a willingness to steer into permanent contracts, thus creating a more stable basis. With clients I do not see an increase in demand for flexible contracts. Apparently the uncertain times are not that uncertain that companies are willing to pay a higher price for a temporary solution. And treasury is an essential function that large companies cannot do without. As to the political discussion, I think all parties are kind of right and should stop searching for a “one size fits all solution”. Unemployment has not risen in the treasury labour market so far. I hope it will not either.

I will continue following the market for you and look forward to your input,

 

Pieter de Kiewit

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