Anne Megens (AWVN) on Big Future Risks in the Labor Market

Looking at the labor market, what shifts have taken place that should guide future policy, both at the company level and in politics?
‘Over the past decade we were mostly engaged with the outside of work - such as contract types and the legal protection of workers against social risks such as disability. Politics is still to a large extent focused on those issues. The reality of employers and workers, however, is vastly different due to the tight labor market. I regularly hear from employers that they would love to employ people who are self-employed, but that the self-employed very often do not want this. They enjoy the fact that as an independent contractor they have more control over their schedule or the type of work they do. They make more choices based on the inside of the work. I am not saying that the outside does not matter, but we are focusing on it excessively, as it is of such consequence whether you have a permanent contract, or whether you are a flexi worker or self-employed. We can prevent that by linking rights and obligations less to the permanent contract and more to workers themselves, regardless of contract type.
At the same time, I note that the rise of self-employment in the Netherlands is exceptional compared to other European countries, even in sectors such as healthcare or education where it is not always expected. That relates to the incentives in our system for self-employment, but also to how work is organized. We as employers should concern ourselves with this too. Apparently, we have organized work in such a way that people experience too little autonomy. There are still sectors with a fixed daily window, where working hours must be between 9 and 5, for example - even if 10 to 7 is more compatible with childcare. In principle, you can change this with the stroke of a pen, for example during the annual renewal of the collective bargaining agreement, but this will and intention are far from always present among parties to the collective bargaining agreement. In that sense, I think we must be a little strict with our members. There really can be more than what is assumed. Do not always point the finger at the government and unions but see what you yourself can do to make your employment more attractive.’

What should employers do to still ‘price themselves into the market’ when there are shortages?
‘We recently investigated which instruments are mainly used. It was predominantly renumeration: higher salary, higher grading, sign-on bonus or labor market allowance... I can well understand that employers opt for these in the heated battle for talent, but it is also shocking. Those incentives ultimately offer no solace in a structurally tight labor market. Of course, no-one declines a higher salary, but you certainly do not ‘buy’ those who already earn well with this and most certainly do not retain them in the long run. With younger people, for example, what kind of company you are plays a strong role. That they are serious about this is apparent from the fact that job fairs are organized where some companies are not welcome. We should of course not exaggerate, and it does not apply to everyone, but step by step, in addition to the p of pay, the p’s of purpose and prestige play an increasingly important role.’

What represents prestige now and in the near future? Is that definition changing? 
‘It used to be about the company car, the nice suit, a corner office, the dinners and busy, busy, busy... Now that car should preferably be electric and it is more about working for a company which does interesting things, being able to do interesting things yourself, autonomy over your schedule, development opportunities... Of course, it is a gradual shift, which is also partly linked to life stage. Once you have a mortgage and family, you do value that good and stable salary. It is in anyway a privileged position to be able to focus on all the great things about work rather than just basic security. At the same time, I note that themes around control on the work situation and working hours in particular play a role in all sectors and at all levels of education, especially among the group of young people that employers are keen to bring in.’

Purpose is often about the social value of a company. How do you flesh it out within the employer-employee relationship?
‘It starts with being able to indicate clearly what the value of a job is and how it contributes to the social value of the organization. Sustainability is also strongly linked to purpose. As an employer you can add to that with green employment conditions. Achmea employees, for example, receive a climate budget for things like insulating their homes or making their white goods more sustainable. I expect that on all fronts outside the traditional employment domain increased responsibility will be placed on the plate of employers, also because the legislator demands it. Some may find that troublesome, but it is better to get ahead of the curve. If we do not, the legislature will eventually step in and there will be more laws and regulations with less allowance for customization.’

Artificial intelligence (AI) is sometimes seen as the way to eventually solve labor market shortages. Do you also think AI offers solutions?
‘I hope and think that there is much potential in AI, but what makes me skeptical is that the advance of computers has not really led to a growth in labor productivity. Scarcity will remain the main undercurrent in the labor market for the next five to 15 years, because the labor force is shrinking or is, at the least, not growing.
Moreover, in the Netherlands the willingness to invest in labor-saving technology has traditionally been quite low because we have always relied heavily on our well-developed labor force. We are rapidly losing that advantage. When it comes to basic skills like reading, math, writing and analysis, one alarming report after another appears. Knowledge and skill obsolescence, which at some point will render workers unemployable, are perhaps the greatest risks for the future. We do not have anything structural in place for that. We leave it to individual employers or set up a STAP budget that is almost immediately abolished. We really need to take learning and development much, much more seriously.’

What needs to change in the system to organize ‘lifelong learning’ properly?
‘We need a much better infrastructure. First, we need to bring together the resources that already exist for learning and development. It is now way too fragmented. I advocate an individual learning account to which the government, employers and employees all contribute. At the moment some employers do an enormous amount of training and others do not. If savings are made for each worker, there will be much more of a level playing field. Everyone in the Netherlands should get a personal budget from that fund to draw from throughout life. Secondly, we need to make sure that it becomes much clearer where people can find advice on training and career choices. That too is now a fragmented landscape. Once that all is in place, we can look at the employment relationship and make more demands on what employer and employee do to maintain employability.’

As employees stay in the same position for shorter periods, employers can be hesitant to invest in training in the current situation. That investment can disappear within two years, after all. How can this situation be solved?
‘Not so. Job-oriented training will always exist and that is good – even if someone leaves after two years. You can after all also benefit from another employer’s investment in your new employee. If we keep questioning whether the investment is worth it, we will never get the learning culture we all crave, with people who are up to date with the latest techniques and developments.  Such a central learning savings pot can help with this. This should be used mainly for training aimed at permanent employability, for example because someone does an internship in another sector for a while or follows a course aimed at a change in function.
We now invest an enormous amount in education at the beginning of life, whereas this should be done structurally. I also think that we should distribute the money more fairly. Now, far more go to university-educated people than to people doing MBO or HBO, if only because they take less time to complete their studies. I would find it logical that there is an equal amount available for everyone. A university graduate may already utilize the lion’s share during their studies. An MBO graduate can use what remains to develop further at a later stage.’

Before joining AWVN, you worked at the SER: always in and around the ‘polder’. To what extent will trade unions still be the best discussion partner for employers in five to ten years, especially in sectors with many self-employed workers who are not covered by a collective agreement?
‘The AWVN was formed more than 100 years ago as a reaction to the unions insisting on collective agreements, which was perceived as very threatening at the time. Quite soon after, we embraced it as a  valuable tool to bring order to the labor market. Not only to protect employees, but also to ensure that employers do not compete. I am a real polder animal and think it is crucial to keep the collective bargaining system intact. Without trade unions, this is impossible. Of course, there is a representation problem in some sectors. That is why both we and the unions are looking for ways to consult broadly with groups of workers. My concern is more with sectors without a collective bargaining agreement, such as some of the tech- and platform companies, and with strongly Anglo-Saxon-oriented companies. These often do not have much use for ‘poldering’. HR people in such companies are often in a sandwich between the head office in the Netherlands - which cherishes our high quality of labor and labor relations - and the parent company abroad that wants to stick to its own international working methods. This is uncomfortable, because it is precisely these segments of the economy that are growing in the Netherlands, while, for example, a traditionally well-organized sector such as manufacturing is becoming proportionately smaller.’

Finally, a personal question. You took a sabbatical last year and upon your return were promoted from coordinator of policy to director of policy & advice. Was it planned that way?
‘No, not at all. I had many conversations about that sabbatical beforehand. I work full-time and hope to continue working for many years and do much work, but I do occasionally need a period to recharge. My employer understands that reasoning. Moreover, they realize that this way they can keep me for the AWVN. If they did not cooperate, I might have started looking around or working part-time at some point. This kind of arrangement is in the interest of both employees and employers. It creates tremendous loyalty. Incidentally, when I announced my sabbatical, many people saw it as a standstill. After all, if you are away for six months, no one sees you and no one thinks about you, was the thought. That management position became available shortly after my return and in my opinion it speaks volumes about the AWVN as an employer that I could apply for it. The fact that I was out for a while was not punished. I am not sure if that would be the case everywhere.’

This interview was published in Management Scope 06 2023.