Temporary versus permanent employment in the Netherlands

There is some debate among recruitment specialists about whether it’s best to offer Temporary or Permanent employment to new hires. Both forms of employment have their benefits, as well as their risks. The “best” for one company may not necessarily be the best for another. One significant factor to consider is how the labour law of each form of employment will impact your business.  

The Netherlands is home to some of the best talent for international companies. No doubt this is thanks to the strong employee protection offered by the Dutch government. Many new businesses that establish their presence from abroad are unaware of the true costs, benefits, and disadvantages involved in recruitment. Businesses tend to prefer hiring on a temporary basis, but are unaware of the true costs involved. 

In this article, we are going to discuss the pros and cons involved in hiring an employee permanently versus temporarily. 

Temporary Employment (Fixed-term) 

In the Netherlands, “Temporary” employment refers to contracts with a fixed end-date (also known as “fixed-term contracts”). Businesses may offer their employees contracts that will be terminated after a fixed amount of time – such as six months or one year later. This type of employment can also apply to employees with fixed working times, as well as flexible hours (ie., on-call or hourly employees).   

Pros : Temporary Employment  

The temporary approach in employment is a popular option for businesses hiring in the Netherlands. Usually, businesses will offer a fixed-term contract to new hires. For employers, this approach mitigates the risk of committing to the wrong hire. Depending on the role, temporary employment may also be the more cost-effective option. 

Cons : Temporary Employment 

Temporary employment provides businesses with safety when they hire… but that safety comes at a cost. Most businesses in the Netherlands are unaware that (temporary employees tend to cost more than permanent employees). In addition to an employees’ salary, employers must pay social premiums and insurance costs. As of January 1, 2020 employers pay even higher premiums on temporarily employed people.

Permanent Employment  

It should come as no surprise that permanent employment is usually the most preferred form of employment by employees in the Netherlands. Contracts without fixed end-dates provide employees with “permanent employment” and will stay in your employ until the contract is specifically terminated. 

Pros : Permanent Employment 

Job stability is one of the most important factors for employees.  Especially in a country where temporary employment is offered as a standard, employers can easily stand out from the competition by offering permanent positions. These employees are more likely to be motivated and engaged in their roles, form bonds with their colleagues, and become your top performers. 

Cons : Permanent Employment 

The only true risk of hiring an employee on a permanent basis in the Netherlands is hiring the wrong person. The process of terminating an employee with a permanent contract can be extensive and it’s not always possible to do so. If you decide that the benefits of offering permanent employment outweigh the risk, it’s important to evaluate the effectiveness of your hiring process. 

Cost effective top talent

Octagon Professionals is a recruitment and HR solutions firm specialized in working with international clients. Our robust database of job seekers and proactive approach to sourcing talent enables us to identify and attract top talent for your business. Learn more about our recruitment process, and find out how perm recruitment can benefit your business.

Are you looking to hire an employee but are not ready to offer permanent employment? Ask our team about how we can help you transition an employee from temporary to permanent employment at minimum cost to you.