‘We all need to work more’

An additional 450,000 people are needed until 2027

While the Netherlands currently has a serious labour shortage and unemployment is historically low, there are also many people who, for various reasons, either don’t work or work much less than they could or would like to do. In other words, there's a potential labour supply that’s currently not being tapped into. The PwC study shows that some 450,000 extra people will be needed for the labour market between 2023 and 2027. 

It also shows that increasing the employment rate of older people or those with an occupational disability would already contribute significantly to increasing the labour supply. But the biggest impact as regards closing the gap between supply and demand would be for part-timers to increase the number of hours they work.

Tight labour market curbs productivity and growth

'The tight labour market curbs productivity and growth, the quality of public services – for example healthcare, the police, education, and public transport – and also the necessary transformation of the economy’, says Bastiaan Starink, People & Organisation specialist at PwC. 

‘But discussion of working more almost always leads to a fierce response. You’ve got people who’ve used the COVID-19 crisis as a period for reflection, and who've started working less because they no longer want to be part of the 'rat race'. There are also people who are distanced from the labour market for whatever reason who simply can’t find a job and who become discouraged and ultimately just give up. And some people – whether or not under pressure of circumstances – who have opted for a particular division of care and work.'

The Netherlands, champion in working part-time

The PwC study only considered the statistics, not labour market frictions and the reasons why other countries are more successful in getting certain groups into work. 'If we look at the overall picture', says PwC chief economist Jan Willem Velthuijsen, 'then the Netherlands is doing very well, comparable to Scandinavian countries, but it’s very different as regards the average number of hours worked. In this country, you can run a household on a 1.5 income. That's far more difficult in many of the countries around us. We really are a champion in working part-time, much more so than other countries, because we can (still) afford it. It’s part of our culture. But over the long term, cohorts leaving the labour market outnumber those entering it. So we’ll have to organise things differently. That's an idea that everyone will need to get used to.'

Encourage the transition to working full-time

With almost half the population working part-time, we could make a big impact in the Netherlands if part-timers increased their number of working hours. At first glance, that may seem like a radical change, but in fact it’s not. 'In the Netherlands', says Velthuijsen, 'the average part-timer works 21 hours a week. In Romania, Sweden, and Belgium – the top-performing countries in this regard – the part-time average is 25 hours. By encouraging part-timers to increase their weekly total by four hours, we could add about 425,000 FTEs to the labour market, which would almost completely solve the country's labour shortage.’

'Transitioning from part-time to full-time work has even more potential. About three per cent of Dutch part-timers switch to full-time work each year. If we manage to increase that figure to 29 per cent – the rate in the top-performing EU countries – it would mean almost 490,000 extra FTEs in the first year. That way, we would completely overcome the labour shortage.'