The number of temp hours in the Dutch temporary employment sector, consisting of temp agencies, job brokers and payrollers, will see a contraction of approximately 3% in 2023, according to research from ING.

The 3% decline comes after two years of strong growth. ING noted that the temporary employment industry is highly dependent on the development of the economy. With economic growth expected to fall sharply in 2023 compared to 2022, the demand for flexible workers is also declining.

ING added that the drop in temp hours is being tempered somewhat because, partly due to the shortage of personnel, there is still demand for recruitment and selection services, including from the government and the semi-public sector.

According to ING, the temporary employment sector is also set to decrease by 2% in 2024, mainly due to continued relatively low economic growth.

The research found that in the first quarter of 2023, the number of temp jobs shrank by 45,000, down 6% compared to the same period a year earlier. There were several reasons for this decline. ING stated that in 2023, companies will be slow to hire staff due to lower economic growth, relatively high inflation and persistent uncertainty in the market. Furthermore, in a structurally tight labour market, temporary workers are offered a permanent contract more quickly, also by the flex companies themselves.

ING added that in certain sectors, such as healthcare, hospitality and construction, it is more attractive to work as a self-employed person amid a structurally tight labour market and with the current laws and regulations than as a temporary worker. It also said that temporary employment has become a low-margin business unless one operates as a specialist or in a niche market.