SMEs very happy with expat workers

29th March 2006, Comments 0 comments

29 March 2006, AMSTERDAM — Most small and medium businesses (SME) in the Netherlands are pleased with their expat workers, but many bosses would gladly see an end to the Dutch work permit system, a new study by ING bank has found.

29 March 2006

AMSTERDAM — Most small and medium businesses (SME) in the Netherlands are pleased with their expat workers, but many bosses would gladly see an end to the Dutch work permit system, a new study by ING bank has found.

The ING report 'Internationaliseringaperspectieven voor her MKB' looks at the potential and lessons learned from internationalisation efforts within the small and medium enterprise sectors in the Netherlands, Flanders (Belgium) and Poland.

The study focuses specifically on businesses involved in Industry, Transport and Logistics and Construction in each of the three target regions. Internationalisation is defined as opening a branch in another country, foreign partnerships, expat workers and offshore outsourcing.

Approximately 10 percent of small companies (20 to 50 employees) and a quarter of medium-sized businesses (50 to 200 workers) in the Netherlands have foreign workers (expats) on the payroll. ING excluded recently naturalised Dutch citizens from the study.

Expat workers employed in the Netherlands mainly come from Western Europe. But ING said all three sectors see the greatest opportunities coming from Central and Eastern Europe in the years ahead.

The Industry and Transport and Logistic sectors had the highest percentage of foreign workers (1.6 percent and 1.8 percent respectively). About 15 percent of the transport companies surveyed had 20 percent or more foreign workers. The construction industry had the lowest (0.5 percent)

The two main reasons in the Netherlands for hiring foreign workers are scarcity in the Dutch labour market and to cut costs. Given their small percentage in the total workforce, expats have a limited impact on overall profitability within the three sectors surveyed.

The lower cost associated with foreign workers is the chief reason for the construction and transport businesses to 'import' workers from abroad. "SME businesses find foreign workers are more prepared to take low-skilled and heavy work for which it is hard to find Dutch people," the report said.

For Industry, by contrast, the most important consideration when hiring foreigners is to bring 'knowhow' into the firm "given that there is a shortage of personnel for technical functions in the Netherlands".

Smaller firms place a higher importance on expat workers are a means of obtaining ‘knowhow’, while lowering costs and increasing productivity are more important for middle-sized companies.

Dutch employers also see foreign employees as useful to meet the cultural and language requirements of their clients. And ING says, "some firms expect, moreover, that the flexibility and attitude correspondent better than that of Dutch employees to the needs of the business".

The overwhelming majority of the businesses surveyed are full of praise for their experience of hiring expat workers. The critical success factors, according to the participants, are communication, support of the foreign personnel, the reliability of the expats and knowledge of the laws and fiscal barriers.

"The work permit system was seen as by far the most obstructive factor in hiring foreign labour. Most employers who discussed this issue would prefer to see the permits disappear," ING said.

Restrictions imposed by the Netherlands, Belgium and other western European countries on hiring workers from the newer EU member states in Central and Eastern Europe can remain in place to 2011 at the latest.

Dutch junior Social Affairs minister Henk van Hoof is pushing the Dutch cabinet to drop the protectionist measure by 1 May this year.

He thought he had convinced his colleagues earlier this month to drop the restriction but the Cabinet delayed a decision. Van Hoof hopes he can still get agreement on his proposal within days.

The ING report says that when the movement of labour is freed up the net effects will not alter much: jobs for Dutch people may be lost in some areas, while the influx of foreign workers into a greying society will be solace in the tightening labour market.

[Copyright Expatica News + ANP 2006]

Subject: Dutch news

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