After two years of decline, the flexible sector in the Netherlands is poised for a modest rebound, with temporary employment hours expected to grow by 1.5% in 2025, according to research from ING.

The flexible sector consists of employment agencies, employment agencies and payrollers.

The research noted that as the economy shows signs of recovery, companies are gradually increasing their demand for temporary workers. It added that the flexible sector is highly dependent on the development of the economy and is one of the first to feel it when clients scale up or down their activities.

In addition to an improving economy, enforcement of bogus self-employment has been beneficial for employment agencies and secondment agencies since the beginning of this year, ING noted. Much of the work that was previously done by self-employed persons can no longer be carried out as such.

Hiring companies are therefore expected to increasingly opt to offer self-employed persons a permanent contract or to hire self-employed persons via an employment agency or secondment agency, as these are now the most flexible forms of employment. 

In 2024, ING noted that just as in 2023, market conditions for the flex sector remained challenging last year. The number of temporary employment hours shrank again by around 5%. Due to low economic growth and persistent geopolitical uncertainty in the market, companies remained very cautious about hiring temporary and seconded workers.

The reduced demand for temporary workers is also clearly visible in the development of the number of temporary jobs. Last year, there were an average of 39,000 fewer temporary jobs than in 2023. The decline was less sharp than in 2023, when there was an average of 56,000 fewer temporary jobs. The decline in the number of temporary jobs was not only due to less demand for temporary workers due to economic sentiment, more permanent contracts were also concluded (+1.5%).

ING stated that the biggest challenge for the flex sector is and remains the structural tightness on the labour market. Even though there was less demand for temporary workers, two-thirds of flex companies were still suffering from the shortage of personnel at the end of 2024. This concerned both their own staff and temporary workers and puts a brake on the growth of flex companies.

In addition to a structurally tight labour market, the sector is also affected by stricter legislation and regulations. This makes temporary work more expensive and less flexible. For example, a temporary worker is now entitled to the same employment conditions as an employee, such as a market-conform pension and a transition payment. 

Looking ahead, despite an increasing demand for temporary workers, employment agencies are expected to continue to struggle in the future. For example, there is less demand for temporary workers for standard work, such as in distribution centres and industry.

Another development that affects generic employment agencies is the loss of demand for large numbers of temporary workers from fast-growing companies. ING noted that in recent years, billions have been invested in, among others, in delivery services as well as meal delivery and online supermarkets. This fuelled the demand for large numbers of temporary workers and self-employed persons.

Finally, the global rise of artificial intelligence has its impact on the flex sector. Generative AIis expected to largely take over the mediation role of many traditional temporary employment agencies and employment agencies in the long term. However, despite a structurally tight labour market, AI is not yet a strategic priority for most recruiters in the flex sector worldwide, it noted.

SIA’s latest forecasts for the global staffing market are available here.