Sharp drop in demand for temp workers

26/02/2010 15:00

As a result of the economic crisis, the demand for temp agency workers in the Netherlands was substantially lower in 2009 than in the previous year. The decrease was larger than in 2003, the last period of economic recession. Turnover in the employment agency branch was therefore also a lot lower than in 2008. The decrease did level out slightly in the last two quarters of 2009, however.

Turnover of employment agencies

Turnover of employment agencies

Turnover shows swift decrease

Turnover in the Dutch employment agency branch was 11 percent lower in 2009 than in the previous year; in that year it rose every month. Turnover began to fall in the first quarter of 2009, but only by 3.6 percent. It started to slide quickly in the following quarter, however, with a decrease of nearly 14 percent. Unlike previous periods of economic recession, turnover fell to its deepest level quite quickly in 2009: in the second half of 2009 the decrease levelled out somewhat.

Agencies with more than 250 employed persons with higher and with lower turnover

Agencies with more than 250 employed persons with higher and with lower turnover

Large agencies more sensitive to economy

The large companies in the employment agency sector are affected substantially more by developments in the economy than small businesses. This is because they often dispatch workers to sectors of the economy that themselves are sensitive to swings in the economy, such as the manufacturing industry. In 2006 and 2007, when economic growth was high, hardly any agencies employing 250 or more staff suffered turnover losses.

Since the fourth quarter of 2008, the number of companies with a lower turnover has risen considerably, however. More than 80 percent of these agencies had a  lower turnover in the third quarter of 2009, although this number stabilised somewhat in the fourth quarter. 

Hours worked by temp agency workers

Hours worked by temp agency workers

Fall in demand for temp workers started earlier

The number of hours worked by temp workers (stage A) was about 16 percent lower in 2009 than in 2008. The decrease started in the third quarter of 2008. The number of hours in stages B and C did continue to rise in the next few quarters. This is quite usual following a long period of economic growth: the economic situation is then still positive enough for companies to keep stage B and C workers. In the second quarter of 2009, the number of these hours also fell for the first time compared with twelve months previously. 

Paul Ras and Ralph Wijnen

See also Economic Monitor, Decline in number of temp hours levels off