Should the Netherlands make its workforce more flexible? The Dutch government has been looking into ways of making it easier for employers in the Netherlands to fire people.

The Dutch government has been looking into ways of making it easier for employers in the Netherlands to fire people.  

However a proposal to this effect met strong opposition and a few months ago the cabinet almost fell. A long-awaited report by a special commission made up of politicians and entrepreneurs barely mentioned ways of making it easier to dismiss employees, even though this was supposed to have been the report's central theme.

The problem

Although Dutch employers are having trouble filling vacancies, at the same time they hesitate to take on new employees. They argue that it is hard to get rid of workers when the economy slows down. Firing employees is always a matter for the courts. They would like to see a reduction in job security.

 
Trade unions and the Labour Party, on the other hand, want to preserve workers' rights. This flies in the face of the prevailing market-economy wisdom that the rigid economies of continental Europe should loosen up.

 
Happy workers
Economist Alfred Kleinknecht says the Netherlands should not make its labour force more flexible. Reducing job security may help to create jobs in the short run, but he believes that in the long run it is a bad idea. The Netherlands is one of a number of European economies facing an imminent labour shortage, and Mr Kleinknecht says that it is a better idea to increase productivity rather than create more jobs. He says this is where a high level of security comes in. Employees with high job security perform better; the happy worker is a productive worker. Mr Kleinknecht says people are motivated to work well because they like the work they do, not because they make money doing it.. He is convinced that increased productivity per worker will keep European economies growing, even as the populations age and the number of workers declines.

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