October 28, 2020

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UWV expects a “bleak winter” on the job market NOW

UWV expects a "bleak winter" on the job market NOW

While in the last few months mainly employees with fixed-term or flexible contracts have become unemployed, in the coming period permanent employees will increasingly have their turn to restructure. This is what UWV economist Rob Witjes expects. “It’s likely going to be a bleak winter on the job market.”

The layoffs at large Dutch companies followed in quick succession last week. Shell, ID&T, BAM and Jaarbeurs reported, among other things, that they would be cutting the workforce. These likely won’t be the last companies to make significant cuts.

“At UWV, when the corona crisis broke out, we saw that flex workers and employees who work on fixed-term contracts in particular stayed at home,” explains Witjes. “Now we see more and more permanent employees becoming unemployed.”

The Central Planning Bureau recently forecast that unemployment will rise to 4.3 percent this year and further to 5.9 percent next year. In addition, this was a conservative estimate. “Given these numbers, it can’t help but also come into play for the open-ended contracts. The longer the uncertainty persists, the worse it is for companies. They conclude that fixed-term contracts are not enough and cut flexible workforce. “

According to Witjes, not all of this will happen in the coming weeks or months. For some companies this will only be the case later. Another factor is that government support measures have prevented many layoffs. These measures will be gradually scaled back in the coming months, which, according to the UWV economist, will have consequences for employment.

When you work from home, some features become redundant

He assumes that large-scale work from home will also lead to changes in the labor market. “I expect digitalization to take place quickly by working from home in many companies. This will likely reduce the need for support functions at headquarters.” He thinks, for example, of personnel or administrative employees.

The cuts in many industries are offset by good sectors such as supermarkets, web shops, garden centers and courier companies. “They are looking for employees. For people who have lost their jobs, there are certainly opportunities to get back to work.”

Witjes therefore hopes that this crisis will lead employees to wonder whether they should be trained or retrained. “In the past this often only happened after people received their letter of resignation. Hopefully that will change now and people will decide sooner to change or expand their chances in the job market.”

He thinks a good example is the change a sound engineer made. “He has played at festivals in the past. But because there is hardly any work there, he retrained this year and now operates breathing equipment.”