Staff shortages limiting job opportunities in the Netherlands: benefits agency

Employment opportunities in the Netherlands will grow this year and next, but the growth of new jobs will be considerably lower than in previous years, benefits agency UWV expects. That is partly because of lower economic growth than in previous years, but widespread staff shortages also play a big role. Many companies want to grow but can’t find the necessary staff to expand.

The UWV expects moderate job growth of 0.8 percent (88,000 jobs) in 2024 and 0.7 percent (85,000) in 2025. The expected job growth in these two years is almost equal to the job growth in 2023 alone, Rob Witjes, head of the labor market information and advice department at the UWV, told RTL Nieuws. “The growth is there, but it is slowing down.”

The number of jobs will increase rapidly in sectors like healthcare, welfare, and specialist business services. Job numbers are stagnating or even decreasing in agriculture, construction, public administration, industry, and transport and storage. Job growth refers to new jobs created due to more demand - a company needing to hire an extra person because there is more work than their current staff can handle. That is different from vacancies, which can also arise because someone is leaving a company.

Part of the stagnation in job growth is the current slow economy. But another major factor is the persistent tightness in the labor market, Witjes said. “We see it in more and more sectors: companies want to grow, but they can’t find the people to do that.”

There have been more vacancies than unemployed people for 2.5 years. “Unique from a historical perspective,” Witjes said. “Companies feel pain from this. The longer it lasts, the more it affects them. And the more creative they have to be.”

The UWV also expects vacancies to grow by 0.7 percent in 2024 and 0.8 percent in 2025. That amounts to around 1.5 million vacancies per year, about 15 percent more than in 2019, the last full year before the coronavirus pandemic.

Staff shortages will continue in the coming years, Witjes expects. Employees are becoming scarcer due to an aging population and a smaller supply of graduates. The new coalition’s ambitions to limit immigration will also not help.

Witjes suggests that companies adjust their growth ambitions downward or look for alternatives, like automation. He acknowledged that this is not always feasible for sectors like healthcare and education, two sectors with significant staff shortages and high expected job growth in the coming years.