The Dutch labour market continues to perform remarkably well on paper. Unemployment remains historically low, workforce participation exceeds 10 million people and salary growth continues to outpace inflation.
Yet according to labour market analyst Geert-Jan Waasdorp, these headline figures only reveal part of the story. Beneath the surface, structural imbalances are becoming increasingly visible, from rising absenteeism and demographic shifts to growing shortages of practically educated professionals.
The labour market remains structurally tight
At first glance, most labour market indicators still point in a positive direction. Vacancy levels remain high, labour participation is strong and purchasing power continues to recover.
However, the traditional relationship between economic growth, unemployment and vacancies is beginning to shift. Economic growth continues, while vacancies decline slightly and unemployment edges upward at the same time.
According to Waasdorp, this suggests that something fundamental is changing beneath the surface of the labour market.
The hidden shortage behind the numbers
One of the most overlooked factors is absenteeism.
Over the past decade, sickness absence rates have increased significantly across the Dutch workforce. Recruitment is therefore no longer driven only by growth or replacement demand, but increasingly by long term absenteeism and mental health related absence.
Waasdorp argues that a substantial part of today’s labour shortages can actually be explained by absenteeism rather than a lack of available talent alone.
At the same time, millions of people remain outside official labour market statistics, including individuals receiving disability support, social assistance or long term sickness benefits.
When these groups are combined, approximately 2.2 million people in the Netherlands are currently not fully participating in the labour market.
The real shortage: practical talent
One of the clearest patterns in the Dutch labour market is the growing shortage of practically educated professionals.
Among the twenty most scarce professions in the Netherlands, nearly all are practical or technical roles, including electricians, welders, construction workers, process operators, mechanics and logistics professionals.
At the same time, the educational composition of younger generations has fundamentally changed. In the early 2000s, most young workers entering the labour market were practically educated. Today, the majority enter with bachelor or master level qualifications.
This shift is creating a structural imbalance between labour market demand and educational output.
AI changes the outlook for highly educated talent
While shortages continue among practical professions, concerns about AI driven disruption are growing primarily among highly educated knowledge workers.
Large Language Models and generative AI tools are rapidly transforming entry level white collar work. However, research increasingly shows that AI does not simply eliminate jobs. Instead, it changes the nature of work and rewards employees who successfully integrate AI into their daily activities.
According to recent PwC research, professionals with AI skills now earn significantly more than comparable workers without those capabilities.
This suggests that adaptability and AI literacy may become more important than educational background alone.
The ageing workforce creates additional pressure
The demographic challenge is particularly visible within practical professions.
A large percentage of practically educated workers are approaching retirement age, while the inflow of younger workers into these professions continues to decline.
Over the next decade, millions of experienced workers are expected to leave the labour market, especially within technical and operational sectors.
At the same time, many of the major societal transitions facing Europe, including housing, energy, infrastructure and healthcare, depend heavily on exactly these practical skill sets.
The labour market’s ‘oil mechanisms’
Despite these pressures, the Dutch labour market remains surprisingly flexible.
Waasdorp describes several mechanisms that continue to keep the system functioning, including staffing agencies, freelancers, labour migrants, part time workers, working students and entrepreneurial flexibility.
Together, these groups form the foundation of what is increasingly described as Total Talent Management: an integrated approach that combines permanent employees, contingent labour, external talent and AI driven workforce solutions.
Internal mobility remains an overlooked opportunity
One major weakness within many organisations is internal mobility.
Employees who want to grow or change roles often find more opportunities outside their employer than within it. Younger professionals especially tend to move externally far more frequently than internally.
According to Waasdorp, many organisations still lack a mature culture around internal talent development and career mobility.
As labour shortages continue, improving internal mobility may become one of the most effective ways to retain and redeploy talent.
The end of data silos
At the same time, technological developments are transforming how labour market intelligence can be accessed and used.
Historically, recruitment and workforce data remained fragmented across separate systems such as ATS platforms, HR software, VMS environments and external labour market databases.
New technologies such as MCP, or Model Context Protocol, may fundamentally change this.
MCP enables AI systems to access multiple disconnected data environments simultaneously through a shared protocol layer. Instead of manually combining reports and dashboards, organisations can increasingly ask complex workforce questions directly in natural language.
This allows recruitment leaders to analyse availability, salary data, mobility trends, supplier performance and workforce planning scenarios in real time.
AI may finally enable Total Talent Management
For years, Total Talent Management remained largely conceptual because organisational data remained fragmented across departments and suppliers.
AI and MCP technologies may now finally make truly integrated workforce intelligence possible.
Instead of separate silos for HR, recruitment, procurement and external staffing, organisations may increasingly manage all talent categories through connected ecosystems powered by AI driven insights.
According to Waasdorp, this could fundamentally reshape how organisations make workforce decisions in the coming years.
Flexibility and compensation remain decisive
Ultimately, labour market dynamics continue to follow economic reality.
If organisations truly want to solve structural shortages within technical and operational professions, compensation and flexibility will remain critical factors.
The market itself will ultimately determine where talent moves, how shortages evolve and which sectors successfully attract future workers.
The central message is therefore both confronting and optimistic: the labour market challenges are real, but they remain solvable when organisations are willing to rethink talent, embrace data driven decision making and adapt to changing workforce expectations.
