The latest figures from Intelligence Group show that the Dutch labor market remains tight despite signs of cooling in the second quarter of 2024. This has important implications for both job seekers and employers.
The tight labor market: what does it say?
Labor market activity has increased, meaning there is more supply. There is a slight decrease in the number of job changes and the market seems to be slightly less tight. Still, many signs continue to point to continued tightness: unemployment remains low, and entrepreneurs are still experiencing major obstacles due to staff shortages. Never before have so many permanent contracts been handed out, indicating that employers are still looking hard for staff and want to retain them.
Supply and demand
Labor demand remains high while supply is relatively low. The economic outlook suggests moderate growth and a slight increase in unemployment, but labor demand is unlikely to decrease significantly and supply will not increase significantly. This leads to continued tightness, especially given the increasing aging population. Although the Central Planning Office predicts annual growth of about one percent in labor productivity starting in 2025, this is likely to be insufficient to really ease the tightness.
Innovation through scarcity
However, scarcity can lead to innovation. The greater and more prolonged the scarcity, the more employers feel compelled to innovate and implement labor-saving technologies. Rising labor costs may also encourage employers to cut back on labor deployment.
Update second quarter 2024: cooling labor market not very convincing
In our previous update, we wrote that the labor market was tilting, but wondered if this would be short-lived. Despite some signs of cooling, such as an increase in labor market activity and a slight decline in job changes, there is no clear turnaround. More people are being approached for jobs, unemployment remains low and the number of permanent contracts handed out has never been higher. The continuing tightness requires constant adjustments and innovations by employers.
Figures in detail:
- Labor market activity: Grew from 8.1% to 9.1% of workers.
- Job changes: Decreased by 14 thousand compared to the previous quarter and by 93 thousand compared to the same quarter last year.
- Sourcing pressure: Rose to 41.5%, with an average number of approaches of 8.6 times per year.
- Unemployment: Remained stable at 3.6% in June 2024, with a slight increase to 3.7% expected in 2024.
- Permanent contracts: 46.0% of the job finders received permanent contracts immediately, a new record.
What does this mean to you?
For job seekers, this tightness offers opportunities to find work quickly, often with favorable terms such as permanent contracts. For employers, it means that they must be creative in their hiring strategies and may need to invest in technology and training to retain their staff and work efficiently.
At JobPoint, we are ready to help both job seekers and employers support in this dynamic job market. Whether you are looking for the perfect job or the right candidate, we are happy to help you with customized solutions that match your needs and ambitions.
Stay tuned for more information on how we can help you in these challenging times.
