Employers not putting enough effort into retention
Salaried workers are now almost twice as likely to change employers (external mobility) as in 2015. While a similar number of people change positions with their existing employer (internal mobility) as in 2015. This is despite the fact that internal advancement has proven benefits such as higher employee satisfaction and productivity and lower recruitment and onboarding costs. This is according to the latest Talent Monitor from labor market data specialist Intelligence Group and HR - tech service provider HeadFirst Group.
In fact, external mobility is currently almost twice as high as internal mobility. In the first quarter of 2023, this ratio was almost 2:1, meaning: when three people change jobs, two out of three times it is with a different employer. This shows that employers are not sufficiently committed to internal careers and advancement opportunities and are mainly focusing
on recruiting new staff.
Retention is the new recruiting
Staff turnover rates are increasing rapidly, which can be seen in all age groups. Young people under 25 take the crown, where the average turnaround time is 2.7 years. 36.5% found a new employer last year. This average increases with age, peaking at 17 years among those over 60. Most of the current labor market mobility is explained by the group up to 35 years of age.
Geert-Jan Waasdorp, director and founder of Intelligence Group: "The principle of 'retention is the new recruitment' has hardly penetrated employers. They keep pushing for external recruitment, while internal mobility is not yet sufficiently on the agenda. Despite the benefits of internal mobility. 2023 should be the year of the turnaround in this area."
Low labor market activity requires different recruitment approach
If we look at the flexible labor market - more specifically independent professionals and secondees in highly skilled roles - assignments in 2022 lasted an average of one year (363 days). In 2020, this was 395 days. This shows a small decline, but not nearly as large as the decline in the length of tenure of permanent staff.
We can say that the duration of the average assignment of one year is getting closer and closer to the declining average of the length of time a young person is employed by an employer, which is now well under three years. Marion van Happen: "To what extent is permanent still fixed and flex still flex? Flexibility is growing among people with permanent jobs. Add to this the fact that recent figures from Intelligence Group show that only 10% of self-employed people are considering going back into paid employment, where in 2015 it was 18%. These are irreversible trends. I ask the policymakers and politicians in The Hague not to stop these developments with legislation, but rather to embrace it and to regulate the
things around it especially well."
The full Talent Monitor 'Fixed is getting more mobile and flex is getting more sustainable' can be read here.
About HeadFirst Group
HeadFirst Group is a leading, international HR technology service provider and the largest platform for professionals in the Netherlands. The organization offers a diversity of HR solutions, such as Managed Service Providing, Recruitment Process Outsourcing, intermediary services (matchmaking, contracting) and HR consulting. An average of twenty thousand professionals work daily for over four hundred clients in Europe, with which HeadFirst Group realizes an annual turnover of over 2 billion euros. The main brands of HeadFirst Group are the intermediaries HeadFirst and Between, MSP service provider Staffing Management Services and RPO and recruitment specialist Sterksen.
About Intelligence Group
Intelligence Group is an International Data & Tech company in the field of labor market and recruitment data. Intelligence Group focuses on the collection, storage and enrichment of labor market related data for the purpose of improving the recruitment of personnel (or employees) by employers and the employability/labor market opportunities of employees. This data is made available to clients in a wide variety, via reports, dashboards and APIs.
Note to editors
Do you have any questions or comments in response to this press release? Please contact Maud Raaphorst, spokesperson at HeadFirst Group, reachable at 06 - 51 10 70 77 or marketing@headfirst.nl
Talent Monitor: Fixed is getting more mobile and flex is getting more sustainable
Fixed is becoming more mobile and flex more sustainable
In this Talent Monitor, we took a closer look at the duration of jobs and assignments of workers. In doing so, we explicitly looked for the overlap and correlation between permanent and flex in the inflow and labor market activity and zoom in on retention and retention.
Staff retention is the new recruiting
Labor market activity - which involves actively looking for a job/assignment yourself - is historically low for both permanent and flex workers. In contrast, external mobility is at a record high, which for salaried workers means they are almost twice as likely to change employers as in 2015. This is almost twice the rate of internal mobility. Employers are hardly betting on internal careers and advancement opportunities, instead focusing primarily on recruitment in the external labor market. This is a major driver of costs and the loss of productivity and job happiness.
Key findings
- Labor market activity (actively looking for a job/assignment yourself) is historically low for both permanent and flex, prompted by the tightness in the labor market. This puts more emphasis on sourcing and active mediation by intermediaries and secondments.
- In contrast, external mobility is at a record high, which for salaried workers means that they are changing employers almost twice as fast as in 2015. In early 2023, the duration of a salaried job for the entire Dutch labor force will be less than five years, down from eight years in 2015.
- It is almost twice as large as internal mobility. Which means, concretely, that employers are hardly betting on internal careers and advancement opportunities, but are concentrating mainly on recruitment in the external labor market. This is a major driver of costs and the loss of productivity and job happiness.
- Whereas employees are employed for shorter and shorter periods, the initial assignment duration of contractors - independent professionals and secondees - is steadily increasing to an average of 205 days. In the process, the percentage of assignments that are renewed after the initial assignment is also increasing again, to 61% in 2022.
- Not paying or charging a market-based labor market rate according to professional group and level of experience lowers the likelihood of renewing an assignment, both from the client and contractor's perspective. It also increases the need for greater transparency and increases the call for independent data-driven rate information.
- The probability of being renewed and the duration of the contract - in addition to the rate - also depends on type of position (embedding), type of project (head-to-head), initial duration (the longer, the lower the probability of being renewed) and the industry (tendered/not tendered).
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Successful first edition of the Labor Market Gateway
On Wednesday, April 19, the first edition of the ArbeidsmarktPoort was scheduled in Nieuwspoort. The ArbeidsmarktPoort is an initiative of the Bovib (branch association for intermediaries and brokers), the VvDN (branch association for secondment companies) and ONL voor Ondernemers. The ArbeidsmarktPoort is a discussion and meeting platform where politicians, journalists, civil servants, industry associations, market parties and other stakeholders exchange views. As a member of the Bovib and cooperation partner of ONL for Entrepreneurs, HeadFirst Group has contributed to the creation of this Labor Market Gate. We welcome discussion and debate on issues and themes related to the labor market and find it important that the public-social debate is taken to a higher level.
The first Labor Market Gate was dominated by the Borstlap Commission report and the parliamentary letter from Minister Van Gennip (Social Affairs and Employment) on Monday, April 3. In this letter, the minister comes up with firm plans to reduce flexible labor. The Borstlap Commission report in January 2020 came with a number of recommendations and proposals to thoroughly reform the labor market to make it future-proof.
Hans Borstlap, former top official and former chairman of the committee, opened the first edition of Labor Market Gate. Borstlap shed light on Minister Van Gennip's plans, the lightning-fast developments in the labor market and his committee's previous recommendations. Borstlap is positive about the direction Van Gennip wants to take, but also strongly criticized the introduction of compulsory disability insurance and the Crisis Regulation Personnel Retention. In addition, he lacks ambitious and clear plans regarding the development of an individual learning account.
Hans Borstlap's speech was followed by a panel with Hilde Palland (Member of Parliament for the CDA), Ruben Houweling (Professor of Labor Law at Erasmus University and Crown Member of the SER) and Hans himself. The panel was led by Hugo-Jan Ruts, editor-in-chief of ZiPconomy. An interesting and substantive panel followed where various topics were discussed, such as the current tightness in the labor market, the growth of the number of self-employed people and a basic social system for all employed people, regardless of the form of contract. Interesting topics on which the last word has not yet been spoken.
HeadFirst Group supports the initiative of this ArbeidsmarktPoort and strongly supports a constructive, fundamental and factual debate on issues and challenges regarding the Dutch labor market. In the future, we will therefore certainly contribute to meetings and debate sessions. On Tuesday, October 24, the second edition of the Labor Market Gate is scheduled. Kim Putters, chairman of the Social and Economic Council and former director of the Social and Cultural Planning Office, will be present then and provide the opening. More information will follow.
If you have questions about the Labor Market Gate and our position in the labor market file, please contact Sem Overduin, Public Affairs Officer at HeadFirst Group. He can be reached at Sem.Overduin@headfirst.nl
HeadFirst Group organizes knowledge session for SGP parliamentary party
HeadFirst Group organizes knowledge session for SGP parliamentary party
On Thursday, March 16, HeadFirst Group, in cooperation with our partner ONL voor Ondernemers, organized a knowledge session for the SGP parliamentary party. On behalf of the SGP, Chris Stoffer (MP) and Arnold van Huizen (policy officer) were present. In the past, HeadFirst Group has organized more knowledge sessions for MPs and policy officers. During the knowledge sessions we reflect on the services of HeadFirst Group and what role and added value an HR service provider has in the (flexible) labor market. In addition, we take the MPs and policy officers into relevant developments in the labor market regarding the zzp-dossier and which challenges and bottlenecks we experience in legislation and regulations. Besides a HeadFirst Group delegation, an independent professional and a representative of one of our clients were also present. They gave a short presentation on why they use our services as client and contractor and where the added value of HeadFirst Group lies for them.
All in all, it was a very successful session and we were able to provide the SGP Parliamentary Group with the necessary information and knowledge. We would like to thank our cooperation partner ONL voor Ondernemers for their hospitality and the attendees for their sharp questions and the discussion we had. Through this type of knowledge session, we try to put ourselves in the limelight as a professional discussion partner and make a valuable contribution to the labor market and self-employed workers file.
If you have any questions about our knowledge sessions as a result of this post, please contact Sem Overduin, Public Affairs Officer at HeadFirst Group. Sem can be reached at Sem.Overduin@headfirst.nl
Florine Onderwijzer joins board of trade association Bovib
Florine Onderwijzer, managing director Professionals & Partners services at HeadFirst Group, has joined the board of trade association Bovib. At the General Members' Meeting on Tuesday, March 28, Florine was officially appointed, along with three other board members. From now on, Bovib chairman Marc Nijhuis will form the leadership of the association with Florine, Sarah Goossens (of Harvey Nash Netherlands), Saskia Kapper (Hero Interim Professionals) and Giancarlo Balzarelli (Magnit Benelux).
"I am very happy with our new board, in which different disciplines and various types of members of the Bovib are represented," says Marc Nijhuis. "Together we will set to work on the trajectory of far-reaching professionalization of the Bovib."
Florine enthusiastically starts in her new role: "The Bovib is there for intermediaries and MSPs, but also represents the interests of hiring principals, independent professionals (zp'ers) and suppliers of professionals (secondmenters). The goal is a mature hiring market, with clear legislation, in which supply and demand are perfectly connected. To that goal I will contribute with great energy." Florine continues: "From my role at HeadFirst Group, with full focus on our services to zp'ers and suppliers, I want to contribute to a Bovib policy that properly represents the supply side of the flexible labor market. This matches perfectly with the disciplines of the other (new) board members of the industry association."
About Bovib
The Bovib is the largest trade association for independent and quality intermediaries, brokers and MSPs. They bring client and contractor together, but also contribute indispensable knowledge of laws and regulations. A task that requires quality, transparency and integrity. The companies that subscribe to this feel at home with the Bovib. With more than sixty members, an active board and short lines to The Hague, they are a serious discussion partner. The Bovib stands for service based on clear and verifiable criteria. They give substance to this with, among other things, a hallmark for the intermediary role, which now enjoys national recognition.
HeadFirst Group expands collaboration with insurtech Alicia for self-employed workers in Belgium
HeadFirst Group brings its partnership with insurtech Alicia, specializing in embedded insurance for self-employed workers, to Belgium. The HR-tech service provider thus takes another important step in its further reaching strategy towards an international platform organization. Florine Onderwijzer, Managing Director Professionals & Partners services at HeadFirst Group: "Thanks to our solution, self-employed people in Belgium can now also start an assignment quickly and properly insured. "
Unburdening zzp'ers
The partnership builds on the ambition to offer support to professionals. Not only in finding challenging assignments, but also in optimizing their own business operations and making them as simple as possible. According to Marijn Moerman, CEO and co-founder of Alicia, this also includes taking care of the right insurances: "In addition to the flexibilization trend in the Netherlands, the number of freelancers in Belgium also continues to rise: last year by 7 percent to almost 200,000. At the same time, insurance coverage is declining. Zzp'ers are insufficiently familiar with the risks and finding appropriate insurance is a considerable search."
That, according to Onderwijzer, is exactly where Alicia makes a difference. "Together we have developed a scalable process for offering high-quality insurance products. Thanks to full digitization, there is more time for personal contact when it matters and we are also able to offer more comprehensive support to self-employed people outside our own borders. This next step in our cooperation thus fits perfectly with our international ambitions for our services for professionals."
On-demand and embedded solutions
In early 2022, HeadFirst Group and its platform Select joined forces with Alicia. It offers embedded solutions for relevant insurance and services that are made available in an integrated way through connected platforms using APIs.
All zzp'ers who are provided with assignments through HeadFirst Group can insure themselves for numerous topics at once, as part of the total package of services that HeadFirst Group has offered for years. "Our goal is to put together the most ideal package of services that professionals primarily need to be entrepreneurs and be able to focus fully on their core business. Through the collective purchasing advantage, self-employed people get attractive and flexible products at a lower price than if everything is purchased separately from different service providers."
Frequently asked questions outline 'Progress letter on working with and as self-employed(s)'
Are you already familiar with the three tracks that the government has devised to restore balance to the current labor market? What plans and proposals are there for the future of working as and with freelancers? Public Affairs Officer Sem Overduin and Business Development Director Paul Oldenburg gave all the ins & outs on this during a webinar. From the many questions asked during the session, it became clear how much the subject is of interest to self-employed people and clients. We share the most common ones below.
- How will the self-employment deduction continue to be phased out?
In the Coalition Agreement 2021-2025 it was agreed to accelerate the reduction of the self-employed deduction. This scheme will be reduced to €1,200 in 2026 and further reduced to €900 in 2027. The self-employed deduction for starters, the starter's deduction, will remain unchanged. However, self-employed people will be compensated during this cabinet period with an increase in the labor discount. With this measure, the cabinet wants to reduce the differences in tax treatment between employees and the self-employed. More information about the self-employed deduction and the steps that will be taken in the coming years can be found here.
- Why is the Fiscal Old Age Reserve (FOR) being abolished?
Since Jan. 1, 2023, you can no longer build up a retirement reserve. The government abolished it to prevent entrepreneurs from using the fiscal old-age reserve to obtain tax deferral. The old-age reserve built up until December 31, 2022, can still be settled according to the current rules. This means that it can remain on the company's balance sheet and can be used in the future to negotiate a qualifying annuity, or it must be settled no later than when the company ceases operations. Also with these measures, the government wants to ensure more equal taxation between employees, self-employed persons and shareholders.
- How is the element of "self-employment" further implemented?
Current case law looks at contraindications to the existence of an employment contract. Some of these are included in the Payroll Tax Handbook. Some examples are (1) the performance of work on the basis of a result obligation, (2) specific knowledge and expertise of the worker that employees within the organization do not have, and (3) that the worker receives substantially higher remuneration than employees doing similar work in salaried employment. In the coming period, it will be worked out with social partners, experts and stakeholders which facts and circumstances indicate self-employment and how these contraindications can be given weight in assessing the employment relationship.
- What is the current status of the enforcement moratorium?
In the period January through October 2022, 275 company visits and 200 book audits were conducted on the qualification of the employment relationship. Partly because of the limited quantitative capacity and the complexity of assessing the employment relationship, it is complicated for the Tax and Customs Administration to take effective action on false self-employment. On the other hand, additional staff have been trained and the Tax and Customs Administration currently has 80 FTE for enforcement.
- What plans does the Cabinet have for the enforcement moratorium?
In the Cabinet' s response to the reports issued by the Netherlands Court of Audit and the National Audit Authority, the Cabinet expressed its ambition to improve this enforcement in the short term and to lift the enforcement moratorium entirely by January 1, 2025 at the latest. In the run-up to January 1, 2025, the Tax and Customs Administration will devote extra attention to communication about enforcement. This will include the consequences for principals and contractors of the intended abolition and the (financial) risks they run.
- What if an audit reveals (fictitious) employment but no malice?
Then the Internal Revenue Service will issue directions that you can work on. Client and contractor are usually given three months to follow the directions. If this is not sufficiently followed, the Tax Office will impose correction obligations and additional tax assessments.
HeadFirst Group's HR tech company ProUnity wins comprehensive framework agreement with Smals for external hiring in Belgium
The ICT services organization of Belgian public institutions Smals awards the framework agreement for finding and managing external ICT professionals to ProUnity, the Belgian HR technology company that is part of HeadFirst Group. The framework agreement is effective January 1, 2023 and has a term of four years. Simone Groeneveld, Director MSP services at HeadFirst Group: "This offers great opportunities for freelancers and secondment companies in the Benelux to offer their knowledge to dozens of Belgian government organizations."
"Belgian governments are investing heavily in technology and innovation, with a view to providing better services to citizens and businesses. To support this, Smals will be looking for some 400 new employees this year. At the same time, we are supplementing our projects and services with temporary ICT expertise. With ProUnity we give a large group of professionals a gateway to work on challenging assignments, in all kinds of domains, with equal opportunities for everyone," explains Donald De Keyser, Management Controller at Smals.
Great opportunities for professionals
Already about 50 government organizations publish daily assignments on the ProUnity platform. Current users include the Federal Parliament, the federal government departments of Finance, Justice, Interior and Development Cooperation, the Walloon government, as well as Sciensano, RIZIV, RVA, Forem, Actiris, the Federal Police and the Center for Cyber Security.
ProUnity makes access to these assignments quick and easy for a range of professionals, self-employed and employed by secondment companies, in the Benelux. Smart use of the combination of its comprehensive marketplace and VMS platform allows them to deploy their talent to Smals and its members. The ProUnity platform monitors the entire collaboration, from the publication of new assignments and the management of contracts and time registration to reporting and invoicing, in strict compliance with Belgian tax and social legislation.
"ProUnity is an innovative tech company, with a sense of personal touch. This perfect balance between tech and touch is essential in our service and industry," explains Simone Groeneveld. "When we welcomed ProUnity into our group in July 2022, we knew they were capable of this kind of commercial success. A big compliment to the ProUnity team. This is an important step in our further reaching strategy towards an international platform organization."
Rate hike of four to six percent for self-employed and seconded workers in 2023
Hourly rates to rise 3.8 percent less than expected in 2022
The hourly rates of flexible workers, self-employed and professionals employed by secondment agencies, rose an average of 3.8 percent in 2022. A lot less hard than predicted, under pressure of scarcity and inflation. This emerges from analysis by labor market data specialist Intelligence Group and HR-tech service provider HeadFirst Group. In 2023, they expect an average rate increase of four to six percent.
The average agreed wage increase came to 3.8 percent at the end of 2022, figures from the employment conditions advisor to Dutch employers AWVN show. The increase for professionals employed by secondment firms was significantly higher, according to The Association of Dutch Secondment Firms, they shared an average rate increase of seven percent to reflect current inflation. HeadFirst Group's hiring data matches the AWVN figures. Professionals who started a new assignment in 2022 experienced a 3.8 percent increase from the previous year. The average hourly rate of highly skilled self-employed professionals currently stands at €92.15.
Interestingly, the average growth of the realized hourly rate in 2022 is higher than the average growth of rates offered on assignments: namely 3.8 percent and 2.9 percent. In 2021, this was the exact opposite at 2.6 percent and 4 percent. Marion van Happen, CEO HeadFirst Group, explains, "This creates the picture that clients in 2022 preferred quality over the hourly rate, due to the ongoing scarcity. Parties and individuals who dare to do so keep themselves in the game and remain agile. Because despite talk of a sharp economic recession, unemployment continues to fall and employment continues to rise."
Hourly rates keep pace
Wage increases will continue into 2023, but due to inflation and profit declines among employers and fears of a mild recession, they are expected to be between 4 and 6 percent. Geert-Jan Waasdorp, director and founder of Intelligence Group says, "Still a significant growth, just slightly higher than last year, as there is a slowing effect from 2022. CBS expects a solid inflation correction in March 2023, as they include wrong variables in their analyses. As a result, the decline in purchasing power will be less than currently expected."
Professionals' hourly rates thus keep pace with collective bargaining agreement developments. "Clients are not taking rigorous steps to index rates on current assignments on a large scale. They take a performance-based approach: only professionals with good performance and an hourly rate below the market average are indexed," Van Happen said.
Flex & politics in 2023: The year of deliberation and (un)clarity
The Netherlands currently has more than 1.6 million zzp'ers. It is the fastest growing group of workers in the Dutch labor market, accounting for over 17% of the Dutch working population. Driven by scarcity in the labor market, the call - from the younger generation in particular - for freedom and flexibility, and supported by platform technology, this development only seems to be accelerating. The proposed plans of Karien van Gennip, Minister of Social Affairs and Employment, seem diametrically opposed to this. How will they affect the (flexible) labor market in 2023? Sem Overduin, Public Affairs Officer HeadFirst Group, ventured a prediction at ZiPconomy.
"Until March 15, people in political The Hague will be busy with the Provincial Council elections. Logically, this will be an important moment for the mutual balance of power in The Hague. The CDA that may be decimated and a coalition that has even fewer seats in the Senate? This will have serious consequences for the strength of the current cabinet.
Regardless of the election results, the December 16, 2022 House of Representatives letter created movement. In 2023, there will be a lot of negotiation and debate about how all these plans will be worked out. Bovib needs to be at the right tables to provide input.
Clients will be scratching their heads and wondering what is and especially what is not allowed with regard to hiring self-employed workers. Our members will therefore receive many questions. The Bovib must constantly make the translation between the reality in The Hague and the reality on the work floor. An opportunity for the intermediary branch to develop further and act as a professional interlocutor towards The Hague and our clients."
Are you already familiar with the 3 tracks to restore balance in the current labor market? What do the developments surrounding the zzp dossier mean for you as a client? During the Webinar Week - an initiative of Werf& and ZiPconomy - Business Development Director Paul Oldenburg and Public Affairs Officer Sem Overduin will give a behind-the-scenes look at the House of Representatives and offer insight into what opportunities this leaves for your organization to work successfully and compliantly with freelancers. Sign up here to listen in on Tuesday, February 7 at 11:15 am.