• After three quarters of contraction in the Dutch economy, the fourth quarter of 2023 shows a slight increase of 0.3% compared to the third quarter. Compared to 2022, however, there is still a decline of 0.5%.
• Several signs indicate that there is some relief in the scarcity in the labor market. Demand for personnel is decreasing slightly and supply appears to be increasing slightly.
• Compared to a year ago, labor market activity among self-employed professionals - the extent to which they move from assignment to assignment - shows a slight increase from 20.1 to 21.7% in the fourth quarter of 2023, compared to the same quarter in 2022. There was also some growth in the group of latent professionals, who, while not actively seeking new assignments, are open to other options. At the same time, the number not moving at all decreased.
• There has been a sharp increase in the average number of offers per job. By the end of 2023, this number was almost at the same level as during the peak in the second quarter of 2020.
• The number of self-employed people who want to be employed (back) has increased slightly. At 11.6%, it is still far behind the percentage in 2021, when it was 17.0%. In addition, just 13.0% of employees indicate that they would like to work as a self-employed person (again).
• Sourcing pressure continues to grow unchanged: on average, self-employed individuals are approached about 18 times a year for a job. More than six in 10 are approached at least once a quarter.
• Data from HeadFirst Group shows that the rates of flexible workers - self-employed and professionals employed by secondment firms - who started a new assignment in 2023 rose an average of 4.3% compared to 2022.

• The worst of the tightness seems to be over in the market for highly skilled independent professionals and secondees. The number of offers on assignments is rising and is almost at the level before the corona crisis. The number of assignments without offers is decreasing and moving below 10%. At the same time, we see that labor market activity and sourcing pressure are picking up. All characteristics that "supply" is stirring and is available or coming.
• The number of highly educated independent professionals has increased by nearly 30% in the last five years. This is an explosive increase of about 325,000 people. In addition, over a hundred thousand seconded workers have been added during the same period.
• In the first half of 2023, the rates of highly skilled self-employed professionals and secondment agencies increased by an average of 3.7% compared to the same period in 2022. With this, rates do not follow inflation, self-employed workers lose purchasing power and secondment agencies lose their margin.
• Junior professionals, a group predominantly provided by secondment agencies, became 8.3% more expensive. They are better able to pass on inflation to clients for these juniors, among other things. While clients are actually favoring medior and senior professionals more, due in part to AI innovations, the flattening of the economy and the challenges with Generation Z workers. Nevertheless, in the first part of 2023, mediors took off a "jacket" in terms of rates. This appears to be an offsetting effect from 2022, when an increase of more than 10% was seen. Over two years, this averages out.
• Flexible work has the image of being "expensive. But how much more expensive is flex really? Between the hiring rate and fixed salary (including vacation pay, social and employer expenses) is an average factor between 2.4 and 2.7. As the level of experience increases, the factor increases. In certain very scarce professional groups, such as gardeners or caregivers IG, the factor climbs to almost 4. For psychologists, policy officials and professional groups - where procurement is mostly through SLAs and tenders - the factor is lower to just near or below 2.

• 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).

• In the past year, 127,000 new zzp'ers entered the market. This makes them the fastest growing group of workers in the Dutch labor market, now accounting for over 10% of the Dutch labor force.
• Figures from Intelligence Group show that only 10.5% of highly educated self-employed people want to return to paid employment. In early 2021, this was still 17%.
• In 2023, the supply of professionals increases, in part because of the huge growth of highly skilled self-employed (independent professionals). Although the supply of active job seekers is still particularly low, the number of offers on assignments is expected to increase slightly, and the banks of secondments in early 2023 - in professional groups such as IT and marketing - will be slightly more filled than a year ago.
• Data from HeadFirst Group shows that the rates of professionals who started a new assignment in 2022 increased by an average of 3.8% compared to 2021. If extended agreements are also included in the average rate, the average rate increase is a small percentage point lower at 3.1%. This decrease is because renewals tend to go at the same rate, while new contracts go at a higher rate.
• The highest rate increase was seen in the first quarter of the year. In subsequent quarters, the increase was less, while scarcity and inflation continued to increase.
• If we assume the expected increase in collective bargaining agreements in 2023, the hourly rates of independent professionals will rise on average between 4 and 6% in 2023. The agreed wage increases for permanent staff and rate increases for independent professionals will not differ much from each other.
  • Hourly rates follow and keep pace with collective bargaining developments. The annual average for 2022 now stands at 3.6%, although wage agreements accelerated to 6.4% in November 2022.
  • Detachers will, if contracts and SLAs allow, raise rates slightly more to reflect current inflation.
  • Clients do not take rigorous steps to widely index rates of professionals on current assignments. They take a performance-based approach: professionals whose rates are in line with performance are not indexed much, if at all, in the interim. Professionals with good performance and an hourly rate below the market average do get indexed - or at least sooner.

• No surprise: IT workers are extremely scarce. Demand is increasing, but supply is also rising 6.9% year on year. In the past decade, the number of IT workers has almost doubled, and by 2030 there will be over 1 million of them in the Netherlands. By then, one in ten people in the labor market will be IT professionals.
• There remains a continued growing demand for IT professionals, both employed and self-employed. The latter group is growing more slowly and is more dependent on cyclical fluctuations.
• There is increasing competition among clients who more often use labor market communications to be attractive, resulting in some having offers and others having none. The latter can certainly be called a trend. The tightness in the self-employed market means that clients are investing more in "selling" their assignments.
• The number of active job seekers is very low. The battle for the latent job and assignment seeker takes place primarily on LinkedIn, networks, platforms and the company's own VMS/ATS systems. While salaried IT professionals are increasingly being hounded - nearly two in three are approached at least once a quarter - it is notable that active sourcing of IT professionals seems to be on its way out slightly. This may run parallel to slightly fewer assignments on the market, and we don't want to call it a trend either, since it is by far the most important sourcing channel, of both permanent and flex.
• One in five IT professionals manages to remain structurally under the radar. This is quite apart from the group that is found and approached but does not respond. The right to privacy and the right to be unreachable is certainly a trend - whether or not soon supported by legislation in the Netherlands - that IT professionals are leading the way in the job market.
• In terms of working conditions and pull factors, IT professionals have already seen many of their needs met. That is increasingly a hygiene factor. Selling the job, the assignment and the work, that's the emphasis. What am I going to do? With whom? For whom? And why? Three sentences won't get you there as an employer.

For this update, we analyzed the realized hourly rates of professionals - self-employed and professionals employed by secondment agencies - in the first half of 2022. Using this data, we were able to map out for 46 professional groups, within which the proportion of professionals is large, how the rate increase developed compared to the previously issued forecast for all of 2022. Motivated in part by an exceptionally scarce labor market and rocketing inflation, there are three main conclusions:

• The rate increase of professionals - practical and highly educated - averages 4.7% in the first six months of 2022.
• The hourly rate is expected to increase by an average of 10.3% by the end of the year. Still over 3% more (!) than already predicted in December 2021.
• The average agreed wage increase for permanent staff for the first half of 2022 is 3.1%. This leaves salaries behind current inflation, inflation expectations and average rate increases for professionals.

• Fees are expected to rise by 7% on average in 2022. Fees charged by highly educated professionals are expected to rise by 5%, while fees charged by professionals working in more vocational and operational jobs (blue collar workers) are expected to rise by at least 7%.
• If we focus on the professionals' segment, we see that the only professionals for whom no fee increases are expected are logistics managers, librarians and curators. While the former do have a profession that is in demand, they are less in demand than last year. The greatest fee rises are expected for electrical engineers, sales and marketing managers, IT managers, database and network specialists, architects and engineering and forestry technicians.
• If we consider the more practical and operational segment, we see that only independent bus and streetcar drivers are expected to see their income reduced slightly (-1.1%). The greatest pay rises are expected for machine fitters, plumbers and pipe fitters, carpenters, electricians and electrical fitters, assembly workers, farmers and foresters, welders and platers and lorry drivers.
• Pay rises are mostly due to a constant, year-on-year increase of 1.8%. Such increases may largely seem to be due to inflation, but that is not always the reason. Increases or decreases in the number of outstanding vacancies in the profession also play a role. Fees fluctuate along with fluctuations in the number of outstanding vacancies, i.e. as the market becomes tighter or slacker. Together, these two factors explain the level of variance in the forecasting model for up to 90.6%.