Temporary agency work is on the rise, according to figures from the Randstad temporary employment agency and industry association ABU.

Normally this is an indicator that the economy is in need of recovery, but in this case it is more of an uncertainty indicator, says a Rabobank labor market economist.

Temporary employment at Randstad is back to the level of April 2019, long before the start of the corona crisis.

The company announced this on Wednesday in its results report for the first quarter of 2021. Furthermore, figures from the ABU, the trade association for the temporary employment sector, show that the number of hours in March rose 14 percent compared to a year earlier.

That sounds positive, but according to Leontine Treur, labor market economist at Rabobank, this actually indicates a lot of uncertainty among employers.

"More people are being hired in specific sectors, but that rather indicates that employers are afraid of permanent contracts."

Treur points out that jobs will mainly be created in sectors that are doing well in these times of crisis.

That is also what Katinka Jongkind says, who follows the labor market for ING.

"You can see that logically no jobs are being created in the hospitality industry and retail at the moment, but that there is a lot of flex work in distribution centers or at the GGDs."

She expects that this increase will certainly continue in the coming months, now that the catering industry and shops can open again from next Wednesday.

"And also at the test streets, which will certainly be there for another year, a lot of people will still be needed."

Normally, more agency work points to an economic recovery

In the past, however, people would have made the opposite analysis.

According to economic theory, temporary agency work is a leading indicator on the rest of the labor market, because companies always first hire flexible workers when production increases.

This means that more permanent employees will also be added at a later stage.

But that has not been entirely true for a while, says Treur.

"Since 2003, the share of flexible contracts has only increased, with a small dip in 2020 due to the corona crisis," she says.

"At the moment, 40 percent of employees are on a temporary contract or self-employed and 60 percent are permanently employed."

'Labor legislation must be more flexible'

Treur attributes this to the employment legislation in the Netherlands.

According to her, it is a bit too rigid on certain points.

"The more permanent a permanent contract becomes, the easier it is for companies to turn to flexible labor. We also notice this in other countries such as France," she says.

According to her, it would help if some things, such as the continued payment of wages during illness, were a bit more flexible.

The fact that the share of self-employed people is increasing at the same time is, according to Treur, a result of favorable tax rules for that group.

Rabobank expects a 15 percent increase in temporary agency work and job placement this year, after a 9 percent contraction in 2020. According to the bank, unemployment will remain on average at 4 percent in the coming year, but will increase slightly in 2022 and will reach 4.5 per cent.