Temp agency work as a business cycle indicator? – The Netherlands

‘Everybody knows’ the Netherlands is one of the promised lands of Temp agency work. The role of functional and numerical flexibilization can be fulfilled by agency workers, and according to the publication Temporary Agency Work Works! from the branch representative ABU shows that in a sense the temp agency business is the biggest employer in the Netherlands.

But there is more. As the ABU states, the temp agency sector can be seen as an indicator for the state of the economy. This is quite understandable from the view of the use of temp agency workers in the Netherlands – all levels of education are well-represented and key sectors as well (administrative work, industry, technology, medical sector). Combined with the actual volume of temp agency workers (nearly 30% of total employment contracts)  one can actually see quite well a kind of business cycle in this picture. The data there is from 2005 to 2011 and shows worked hours, but here the situation from 2012 onwards can be seen. It is clear that actually already in 2006 the worked hours of temp agency workers started to decline, followed by an actual decline between 2008 and 2010, followed by the now-famous ‘mini-recovery’ of 2011. Since 2012 the number of hours worked in this sector has continuously declined.

So if this indicator is any reliable signal, the Dutch economy is not nearly recovering, regardless of what is e.g. said here in this Financial Times analysis. I haven’t had time to figure out what is meant by the ‘pension funds can take over some of the bank lending in the new policy context’ -idea but it sounds a bit weird.

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