Permanent contracts on the rise due to scarcity of employees

Edition 28 December 2017, by Stephen Swai

With the scarcity of employees in the job market and improved economy, many employers are giving permanent contracts more than in previous years. According to a recent interview conducted by the employers’ association AWVN, 1 out 3 employers are giving permanent contracts than in previous years. This has been seen in roles that are hard to fi ll and positions where employers would like to keep the employee for a longer period of time. In fi gures, the number of permanent contracts has increased by 57,000 since the third quarter of 2016, this being the biggest increase since 2009. This is according to the information released by the Central Bureau of Statistics.

On the other hand, the number of workers has increased by 177,000 during the same period, while the number of those with the prospect of a permanent contract has increased by 77,000. Most of the permanent contracts include fulltime employees. 2 out of the 3 employers have indicated that they have a hard time fi nding suitable candidates compared to two years ago. This problem is not just in technical fi elds where it was hard to recruit. Now, it is hard to fi nd commercial and administrative staff, lawyers, production staff, health personnel, fi nancial workers, waiters and workers in similar fi elds. In order to deal with the shortage in the labor market, employers have turned to fl exible and freelance workers. In fact, the number of employees with fl exible employment, including employees with the prospect of a permanent job has increased by 98,000 in the past year. The number of freelancers has also increased by 27,000. The practice of giving more permanent contracts is seen as a move to attract and retain employees in the competitive job market with a shortage of employees. The CEO of the engineering company Movares, Sander Eijgenraam was recorded saying, “good engineers are increasingly scarce and the competition is high. Because of the permanent contract we give, people now specifi cally apply to us.” The increase in permanent contracts has also been attributed to the improved economy, which has boosted the confi dence of employers. This was said by the Chief Economist Peter Hein van Mulligen. He added that, employers are trying to attract talent and there is an increase in annual contracts with the prospect of becoming permanent contracts.

According to the Central Bureau of Statistics, employment growth is expected to continue rising, following the increase in the number of jobs by 51,000 in the past quarter, which led to a record high of 10.2 million. In terms of vacancies, 213,000 vacancies were open at the end of September. This was considered an increase although it was lower than the two previous quarters. In order to determine the perception of employees in regard to permanent contracts, a recent National Labor Market Survey of TNO was conducted. The results showed that, 47.9 percent of respondents said that they found permanent contracts to be “very important” while 43.2 percent found them to be “important”. Millennials, who have always been regarded as a group that is not attached to the job security that comes with permanent contracts, have also indicated that they like permanent contracts, with 81 percent indicating that they would like to have permanent contract. This is against the 29 percent that currently have them. It has also been reported that the practice of outsourcing is performed to a lesser extent nowadays, with employers opting for robotization, automation, recruiting other similar candidates for the position and putting more emphasis into sustainable employment. Permanent contracts are further expected to rise after the Third Rutte Cabinet agreed to encourage small companies to give permanent contracts to employees.