Dutch, Danish 'flexicurity' keeps unemployment low

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Dutch, Danish 'flexicurity' keeps unemployment low

Dutch, Danish 'flexicurity' keeps unemployment low
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The city of Den Bosch in the south of the Netherlands is a hotbed of private job recruitment. Its agencies play a key role in the country’s successful flexible employment system.

The Dutch jobless rate has even undercut Denmark’s. In the Netherlands, unemployment is 3.3% – the lowest in the EU.

In comparing the two countries, one of the biggest differences is that the Danes finance their system almost entirely from taxes. It is not the same in the Netherlands.

Labour market consultant Martijn van Velsen explains that the commercial agencies act as middle-men between companies that need flexibility and workers; The state does not intervene much.

The Danish have a system of rapid hire and fire, with the state ever-present. It provides wages, social security payments to people who have been laid off and training. In the Netherlands, flexi-workers tend to have permanent contracts with private temping agencies. These centres feed human resources to companies that need workers on a short-term basis.

Professor Tom Vilthagen at Tilburg University says that those workers known as ‘non-standard’ often enjoy neither standard employment nor social security. He points out that in some EU countries only ‘insiders’ (people with fixed long-term contracts) benefit from strong protection. Outsiders (people with either short-term contracts or none at all) receive only minimal protection. “(And yet) that is not the Dutch system.”

Training is part of the flexicurity backbone. It is costly, but provides a strong defence against social dumping, says Belgian professor André Sapir: “We can’t afford not to do this; education equips people to be competitive — to be human capital. A system that doesn’t do this will not be able to withstand pressures from emerging countries.”

As training can take a big bite out of private companies’ operating budgets, the Dutch commercial agencies are partly public-funded.

Manpower manager Edwin Zonder explains: “We have subsidies in the Netherlands. National subsidies and the European Social Fund give us (the companies) money that goes towards educating (training) the temporary workers.”

Some experts consider that the Danish system has an advantage over the Dutch in that it encourages people to change their professional activity at any time in their career. This appears well-geared to ageing populations and guards against over-heating pensions.