An increase in the number of highly-skilled migrants and other foreign workers coming to work in the Netherlands will not save the country from its ongoing worker shortage, a new report from the Netherlands Bureau for Economic Policy Analysis (CPB) says. Instead, the report advocates for intervention by the government to reduce the demand for labour, for example, by increasing the salaries of those who work in education and healthcare.

Migrant workers can help in some sectors, but not all

Migrant workers can help to alleviate the pressure caused by the worker shortage in some industries, but not others, in large part because of the language barrier, for example in the teaching profession. The CPB also considered other ways to reduce the impact of the shortage, such as encouraging part-time workers to pick up more hours, but this also did not have enough of an impact to be significant. 

The Dutch labour market has had many more vacancies than job seekers for many years already, but the shortages are now impacting almost all industries. “That has consequences for many companies and organisations and makes it difficult to realise social challenges in areas like housing, healthcare, education, and the energy transition,” the CPB said.

The only way to reduce the shortage is to improve working conditions, says the CPB

The CBP considered many options to try and tackle the worker shortage in their report: retraining workers, recruiting more workers from abroad, enticing part-time workers to work more hours, and encouraging the unemployed to start working again. However, according to their report, these strategies prove unsuccessful, and instead the country requires intervention from the government. 

The Netherlands already has the highest labour market participation rate in the world, the CPB said, which means that encouraging non-workers to rejoin the labour market will have little effect and that the real issue is working conditions and pay. The CPB recommends that the government can improve working conditions in the sectors with the most severe worker shortages, and make them more attractive to work in. 

This means finding the budget to increase workers' salaries in specific sectors and reduce government spending, which should allow the economy to slow down, reducing demand for goods and services, which will free up some people for work in critical sectors. The final recommendation made by the report is for the government to simplify administrative procedures so that, for example, the belastingdienst requires fewer employees to collect taxes.