Three underexposed effects of the Dutch WAB for employers

Per January 2020 the Balanced Labour Market Act (WAB in Dutch) has entered into force in the Netherlands. The main principle of the WAB is to make it more attractive for employers to hire employees on a permanent basis by reducing the gap between permanent contracts and flexible employment.
Needless to say that the WAB has a firm impact on the position of temporary workers and on the costs of temporary work. Much has been written about the effect of the WAB on temporary employees and about the increasing costs of temporary workers for an employer.
But the impact goes beyond that. Everyone involved is looking for the best way to integrate the new legislation into their situation. That development will also influence the dynamics of the labour market. Time to highlight a few underexposed effects of the WAB.

Short and long term
Many employers – some helped by external advisors – have made an analysis of the impact of the WAB per January 2020: making an inventory of the number and type of temporary employment, costs of the impact on the current population and the necessary adjustments in planning and scheduling processes. All important if you want to avoid unexpected cost increase and claims.
But this short term impact should also be accompanied by a more strategic orientation: what are the opportunities and threats of the new regulations in the longer term? This will provide a different picture for different companies.

From flex to perm?
First of all, many now have the impression that the WAB makes flexible work so much more expensive that hiring permanent employees is a cheaper option. But that is only true in a limited number of situations. In most situations temporary work has become more expensive, but will still be cheaper than changing all flexible contracts to a permanent contracts.

New target groups
You may need to look for new target groups that allow your company to be sufficiently flexible at an acceptable cost level. You could consider hiring Old Age Pensioners. They can be deployed relatively cheaply and a number of flexibility-inhibiting effects of the WAB do not apply to them.

Differentiating offer
The WAB can be a reason to critically review the percentage of flexible contracts and the way in which flexibility is implemented in your organisation. Particularly for the scarce target groups it is important to remain an attractive employer through a distinctive offer. For example, by guaranteeing more hours, increasing the chances for permanent employment or maybe also by offering a permanent employment contract from the start.

In summary:
1. Despite the WAB, in many cases flexible forms of work are cheaper than work under permanent employment contracts.
2. The WAB impacts which target group will be deployed in a specific situation.
3. If you include the WAB in your strategic workforce management, it encourages you to formulate a stronger offer (Target Group Value Proposition) for your current and future employees.

So, it is important to also consider the long term impact of the WAB on your company!

About the author

Marc Viëtor is Managing Partner at TalentIn. Marc has worked over 25 in the HR industry and is highly experienced in advising organisations in choosing and implementing the right recruitment strategy.

TalentIn has extensive national and international experience in developing and improving strategies for the recruitment of your permanent and temporary staff. We know how these programmes can be designed and implemented successfully. We advise, but can also provide practical support. Are you interested? Please contact us for an appointment without obligation via www.talentin.eu, info@talentin.eu or +31103075422

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