Tight labour market major impact on Dutch economy
The tightness in the Dutch labour market is a challenge that cannot be avoided. McKinsey warns of the potential major economic consequences if this situation does not improve. A shortage of as many as 1.4 million workers is looming if we don't take action now. It is time for bold decisions: investing in training, retraining the workforce and encouraging people to choose productive or socially important occupations. In short, an innovative and charismatic approach is necessary to keep our economy dynamic and competitive.
Labour productivity growth is slowing - and has stagnated in the public sector
An alarming development: labour productivity growth in the Netherlands is on a downward trend. Between 2010 and 2022, we have seen a decline from 1.3 percent to 0.4 percent growth per year. This is partly due to reduced R&D investment and the shift of work to sectors with lower productivity. Of most concern is the stagnation in the public sector and the decline in the private sector.
The labour shortage may reach 1.4 million people
The Dutch labour market faces a huge challenge: if we do not rapidly increase productivity growth, the labour shortage could rise to as many as 1.4 million people by 2030. This means almost a quadrupling of the shortage. A situation that calls for innovative solutions, in which AI technology can play a key role.
Increasing labour productivity through technology
Technological innovations such as automation, digitization and AI present us with an unprecedented opportunity to significantly improve labour productivity. By accelerating the implementation of these technologies, we could potentially quadruple productivity growth. This would alleviate the labor shortage of about 1.1 million people by 2030.
Accelerated adoption of AI and automation could replace 15 percent of work by 2030
With accelerated adoption of these technologies, we could replace up to 15 percent of current work. This offers room not only for growth, but also a redistribution of jobs to sectors where human skills are indispensable.
In this transition, it is essential that we look not only at the technology, but also at the impact on the people behind the jobs. Our job is to create an environment where everyone can grow with the digital transformation.
Retraining to gain the right skills is important
The job market is in transition and requires a new set of skills. Retraining and upskilling are critical to ensure that employees gain the right skills. This requires a change in culture and mindset. A workforce that is constantly evolving is essential to keep up with the digital transformation. According to McKinsey & Company, we need to focus on the sectors where the shortage is greatest, such as engineering, digital and tech, and health and wellness.
McKinsey & Company calls for swift and widespread action
According to McKinsey & Company, time is running out given the magnitude of the challenges in the Dutch labour market. Thus, we need an ambitious and widely supported action plan that extends over the next five years and beyond. Government, employers, employee organisations, educational institutions and civil society must join forces, according to the international consulting firm.
ZZP-ers as change agents
But what can you do as a company yourself? Obviously, invest in (re)training and upskilling existing employees. But temporarily strengthening the team is also a possibility. Along with young professionals and students, self-employed people are the first to master new technology. They have a financial incentive to stay relevant. So using self-employed people as change agents in a team of permanent employees can be a good strategy to increase the team's ability to adopt.