Help Wanted: Job Vacancies Demand a New Mindset

The Dutch government is concerned with reshaping the labour market, to make it future proof without sacrificing social security for workers. But well-intended efforts are coming up short in certain areas, making it impossible to truly revamp the labour market in the right way. What’s needed is a perception shift backed by the government, and attention to workforce trends that can catalyse employee engagement and productivity.

If work is essential, what’s not working?

Work, as a concept, is undeniably a crucial aspect of our society. It’s the driving force behind our economy, enabling innovation and promoting social cohesion by connecting people in their working lives. But work also brings meaning to the self, as the ideal platform for continuous learning and development throughout a person’s life. So, with all the vacant roles out there, what’s causing workers to opt out of applying?

As far as the Dutch Ministry of Social Affairs and Employment is concerned, the explanation lies in a labour market failure to bring equal opportunities to our society – fair rewards for work and support for those in need. The government has started several initiatives to address this, focusing on topics such as the platform economy, restructuring child daycare, changes to the minimum wage, and a diverse and inclusive workforce, plus exploring better employment models and work flexibility. However, these initiatives are largely not taking advantage of a few key workforce trends that can initiate a real change in the labour market.

Labour market pressures: Next-level complications

We’re experiencing an economic slowdown, high labour participation and low unemployment rates – most of the people who want to work are already working. But increasing the number of potential workers or worked hours is too simplistic; it ignores the several other points of pressure on the labour market:

• The potential labour supply is decreasing locally. This is being driven by a challenging demographic setup and an ageing workforce, not just in the Netherlands but across Europe, as well as in North America and Asia. The ratio of retirees to workers in the Netherlands in 2020 was 1:3, but is expected to hit 1:2 by 2070. Adding to the challenge is a dwindling local ‘supply’ of new workers on the horizon, as birth rates have fallen.
• Workforce desires are changing. Workers are increasingly opting for flexible employment arrangements, such as contract work, gig work, etc.
• There is a negative perception of flexible employment. Heard the term ‘excessive flexwork’? The Dutch government itself has influenced perceptions of contingent or flexible employment, by stepping into the conversation about labour conditions and rewards. The rhetoric has sometimes cast flexible employment as unfavourable, and some now view it as detrimental to workers’ social security and working experience. New labour market regulations are tightening rules around flexible employment but struggling to retain its positive impacts.
• New skills are in demand. Changes in work itself are being driven by technological advancements, but also the energy transition and other factors. The next generation of work requires new skill sets that aren’t being supplied to the extent needed.

In short: We simply don’t have the people to get the work done, assuming the labour market and workplace regulations remain as they are today. Redesigning the work itself, such as through automation and artificial intelligence, may bring some relief. But it won’t fix the labour shortage in the short term. And nor will widening the talent pool geographically, taking advantage of hybrid- and remote-work developments.

Flexible thinking: Reshaping work, the workforce and the labour market

What’s needed is a renewed labour market that empowers organisations to combine employment flexibility with the income security needed to support our society. Unfortunately, it seems the government impulse has been to instead regulate gig work so that it fits into the traditional mould of standard employment models.

Flexible employment can, and should, be a viable option in its own right, within the struggling labour market. This is especially valid as we observe some large trends unfolding in parallel within organisations, concerning flexibly matching people to work. Alternative employment arrangements should be viewed not as a detriment to social security, but as a lever that supports it – and even enhances it.

Breakthrough opportunities to ride the trends

Three main trends are driving the evolution of new opportunities. They revolve around a more flexible matching of people to work, and are the key to pushing a new perspective that will reverse the current crisis:

1. Skill-based labour markets:

Many vacancies require certifications, credentials and/or diplomas – indicators that a job applicant has the right skills and knowledge. But with advancements in AI and other technology, organisations can now assess individuals’ actual skills and knowledge, so applicants can be selected based on their skills and potential rather than their credentials. This opens up a wider talent pool, giving employers a better chance of finding workers with the right skill sets. It also provides more equal opportunities to the workforce, ranging from supporting skilled candidates without credentials or a diploma (e.g. due to life circumstances or inaccessible education) to providing opportunities to for example people that add a different perspective due to their neurodiversity or have more developed sensory skills (e.g. analysis or communication) due to hearing and/or visual impairment.

2. Skill-based internal talent marketplaces:

‘Talent marketplaces’ are platforms within an organisation, or an ecosystem of organisations, that break down jobs into sets of tasks and activities (e.g. projects, gigs) and match these to workers based on their skills, experience, interests, availability, etc. This provides the benefits of flexible employment without affecting job security. Moreover, as it refrains from matching workers to work only via official job descriptions, it is likely to unleash productivity and employee engagement, plus strengthen collaboration across siloes.

3. Leveraging the flexible workforce:

The supply side of the market is becoming more and more flexible; workers are increasingly working in alternative employment arrangements, such as becoming contractors or gig workers, or taking on multiple jobs. Organisations should take advantage of the non-traditional workforce as part of a deliberate strategy: Decide which skills you want to source and in what capacity (e.g. Which do I really want in a salaried position, and which do I prefer to find in a contractor or other non-traditional worker?). In the context of so many open vacancies, a deliberate strategy can make it easier to actually get the work done.

A new mindset to trigger change

Organisations are struggling to fill vacancies right now, but there is a clear avenue to reverse this situation: Change the nature of work by embracing flexible employment arrangements and expanding talent pools. This kind of forward thinking sends a positive message to the extended workforce – one that counters the negative perception of flexible work – and can significantly improve employee engagement and productivity. But new messaging is also needed from the government: The steps being taken to ‘fix’ the labour market should be adjusted, treating flexible work not as a threat to social security but an enabler of it.

Sources

¹ Karien van Gennip (Minister, Social Affairs and Employment, Netherlands), kamerbrief over voortgang uitwerking arbeidsmarktpakket, April 3, 2023.
² Ibid.
³ UWV, “Demografische veranderingen op de arbeidsmarkt: meer doen met minder mensen,” September 4, 2023; Centraal Bureau voor de Statistiek, “Bevolkingsprognose 2023-2070: minder geboorten, meer migratie,” December 15, 2023.
⁴ Centraal Bureau voor de Statistiek, “Bevolkingsprognose 2023-2070: minder geboorten, meer migratie,” December 15, 2023.
⁵ Centraal Bureau voor de Statistiek, “Geboorte; kerncijfers, 1950-2022,” November 23, 2023.
⁶ Centraal Bureau voor de Statistiek, “Hoeveel flexwerkers zijn er?.”
⁷ Ibid.