The Dutch economy will grow by 0.8% this year, which is sharply lower than last year's 4.5% growth. While inflation is set to decrease, in part due to the economy cooling down, it remains too high at 4.2%.Read more
Incentives for people to work more (or fewer) hours
Published: 30 May 2023
One in three working people in the Netherlands is prepared to work more hours if it means a higher salary. People would also be willing to work more hours if their work were more fun, if remote working were easier and if they could spend less time caring for their children. One in ten would be willing to work more if their employer would simply ask them to.
This has emerged from a DNB survey held among more than 1,300 working people. The aim of the survey was to find out why people work part-time and how to entice them to work more hours. Working more hours can help alleviate the current tightness on the labour market.
Record high employment on the one hand, record high vacancies on the other
Never before have so many people been employed in the Netherlands: more than 75% of all residents between the ages of 15 and 75 were active in the labour market at the end of 2022. At the same time, there were 442,000 job vacancies (47 openings per 1,000 jobs), which is also a record. Staff shortages can be found throughout all sectors of the economy, including in healthcare, engineering, education and transport. As the population ages, fewer and fewer people are available for work, adding to the tightness of the labour market. At the end of last year, 4.6 million people were employed part-time (48% of all employed people). Labour market tightness could be eased if part-time workers (those working less than 35 hours per week) started working more hours. According to the Netherlands Institute for Social Research (SCP), part-time workers are willing to work an extra 2 to 2.5 hours per week on average. A key question then is how to encourage them to do so.
Higher pay may encourage some people to work more hours
Some 1,300 working people completed the DNB Household Survey, providing insight into what motivates people to work part-time or full-time. The survey reveals that higher pay can encourage part-time employees to work more hours, but there are also other motivators (Figure 1).
Chart 1 - What would incentivise you to work more hours?
A quarter of respondents said they would be prepared to work more hours for a higher salary. An additional 10% indicate that remuneration is not the main reason, but that it does play a role. A caveat to this finding is that it is unknown how much higher the remuneration would need to be. 17% of respondents said they would work more hours if they had difficulty making ends meet on their household income. More fun or challenging work would be the main reason for working more hours for 10% of respondents. Opportunities for remote working are another reason for 10% of respondents to consider working more hours. Reducing the time spent caring for children (12%) and high-quality and affordable childcare (6%) are also mentioned, and these percentages are almost twice as high among parents.
Many different reasons for working part-time
What incentivises people to work more hours is not the same as their reasons for working part-time, which is why the survey also asked part-time workers why they do not work full-time (Figure 2).
Chart 2 - Why do you not work full-time (>35 hours)?
The main reason for not working full-time is caring for children or grandchildren (most important reason among 21% of respondents; among parents 38%), followed by having more free time (14%) or for health reasons (13%). Having more time for housework and more time for themselves are also often mentioned as reasons for working part-time, especially by working people who do not have children. 11% of respondents reported not working full-time because it does not generate enough additional income. A larger proportion (22%) said they work part-time because they do not need a higher income. In addition, 10% of part-time workers are unable to work full-time in their current job, and 9% say they do not find their current job appealing enough to expand their hours.
Full-time workers (not shown in the figure) say that the main reason for working full-time is that they need the higher income (31%), that they enjoy their work (18%) or that they consider it the norm to work full-time (18%). Half of the group who say they need the higher income are under 35 years old and often work in trade, transport or hospitality. The motives for working part-time or full-time are thus diverse and depend on more than just income, which is in line with previous findings by the SCP and Statistics Netherlands (CBS).
1 in 10 part-time workers would work more hours if asked
As the population ages, the workforce is expected to continue to contract. This increases the need for employers to use a wide range of tools to attract workers and boost the number of hours worked going forward, as the survey results suggest. As mentioned above, remuneration plays a role, and the content and quality of work can also incentivise part-time workers to work more hours. 16% of survey respondents also mention a better fit between working hours and private life, or work-life balance (Figure 2). Some low-hanging fruit also seems to be ripe for the picking, with 11% saying they would consider working more hours if their employer would simply ask them to.
The government can also do its part, including as an employer
The government can also play a role. The survey shows that a lack of availability of childcare can be a disincentive for parents to work more hours. From that perspective, it is therefore laudable that the government is looking at ways to make it easier for parents to combine work and care duties. Alongside this systemic responsibility, the government itself, in its role as an employer, is also facing labour market shortages in public and semi-public sectors such as healthcare and education. It can therefore lead by example in responding to factors shown in Figure 2 such as making work more challenging and appealing or taking measures to improve employees’ work-life balance. A recent Social and Economic Council opinion makes recommendations to this end, including reducing unnecessary administrative burdens, and, like the results of the DNB survey, points to the comprehensive approach that will be needed to resolve labour market tightness.
People with low incomes and insecure jobs are also more likely to be vulnerable in other areas, such as their housing situation and asset position. About a quarter of this group seems unable to escape their vulnerable position.Read more
If Dutch households are vulnerable, they are often vulnerable in several areas at once. For instance, households with high housing expenses relative to income are also more likely than average to have a poor position in the labour market and limited financial buffers, according to a new study by DNBRead more
Faced with soaring inflation that is eroding purchasing power, workers will try to compensate by negotiating higher wages. As the resulting pressure on profit margins grows, employers will in turn try to pass on higher wages in the prices they charge their customers.Read more