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Sunday, 20 September 2015

A layer of workers with flexible contracts will always remain necessary for small and large companies. Nevertheless, companies should not see flexible contracts as THE solution for all workers. It simply isn’t…

Since the beginning of this year, I am an independent freelance ICT consultant, who works via The Future Group. The Future Group is a chain of independent partnerships (i.e. ‘maatschap’ in Dutch) in the ICT industry, all consisting of freelance consultants who cooperate, based upon their specialties in ICT. Within The Future Group there is a Testing partnership, an Oracle partnership, an Agile partnership, a Java partnership etc. Well, you get the picture.

Last year I made the decision to become a freelance professional, after being increasingly fed up with my then employer for their flawed corporate strategy and their inability to adapt to the changing world in the ICT industry, as well as to the opportunities that the future offered.

When I indeed became independent, I did so with the typical halfheartedness and doubts of someone, who worked the large majority of his career for a company with all the perks and steadiness that a fixed contracts offers: I wanted to become freelancer very much, but I was afraid of not succeeding in it.

In the first quarter, I had what you could call a ‘shaky’ start, with a first assignment that ended much earlier than anticipated, due to a budgetary shortage within my department. After that I spent three months without an assignment and I definitely endured some periods with pessimism and doubt during that time. Nevertheless, I knew that my time would come, as it always did.

I was raised in a family of moderately optimistic, middle class people with a strong will, a good heart and 100% honest, hard-working genes. One of the most important lessons I learned from my parents is: ‘for every door that is shut, another door is opened’. Until now I have always stuck to that lesson.

And this indeed happened in June of this year. Fortunately, I  found a new assignment at a wonderful banking office in the heart of the country and I am now increasingly happy with my new future as freelancer.

Yet, I cannot advice everybody to do as I did: to become freelancer. Especially people without any financial reserves should not do it and neither should people who are very susceptible for stress – stress chickens as they are called in (translated) Dutch.

People who feel desperate without a fixed contract job with some guarantees built in and without the safety net, offered by the basic, social security that is common in The Netherlands. These people should not become freelancer, as the stress of losing their assignment – sometimes after a few weeks or months – would make them feel unhappy and perhaps even ill eventually.

Yet, at this moment we are in a time in which many economic pundits and well-educated knowledge workers, many executive managers and many companies as a whole think that a world of totally flexible labour is the inevitable future… And that anybody who does not comply to this future is an outcast, without proper chances on the future labour markets.

This is the reason that the ‘utopian’ world – for many companies and executive managers – of totally flexible labour is a dystopian future for the many workers, who cannot mentally handle not having security and don’t want to live in such a world.

Therefore I think that the endorsers of the totally flexible labour markets are dead wrong…

Personally, I don’t think that the future will consist of flexible labour alone. There will always be room for workers and companies, who remain loyal to each other: the companies by offering fixed contracts to their workers, educating and training them and sticking with them in good and bad times. And the workers, by working for the same company during their whole career and giving their best shot every day. Is that a bad thing?! Of course, it isn’t.

(Executive) managers, who see their workers as the heart of their company and who invest in them through a decent remuneration and excellent training opportunities, are rewarded with loyal and caring personnel, which is often willing to work a step or two harder, when this is required by their bosses.

Loyalty is not only when workers work hard for their companies every day, but also when these workers think and talk about the future of their company and give their honest opinions, without shying away for positive (and sometimes even negative) criticism. So many defaulted companies would still have survived, when they would have listened to their personnel more closely.

Although flexible workers can also be very loyal to their principals, they will never reach the state of loyalty that workers with fixed contracts will, from their nature. Denying that is unwise…

But on top of this primary layer of personnel with fixed contracts, that will never disappear in my humble opinion (!), there will almost always be a layer of flexible workers out of choice and desire: people, who thrive in different environments and deeply enjoy having ample chances to learn something new and beyond their comfort zone. And people who get bored doing the same job for more than a few years in a row. That is a good thing too, as these flexible workers give the company room to breathe.

In the future, such a layer of workers with flexible contracts will remain necessary for small and large companies, in order to survive periods with fluctuating demand for their products and services. And also for companies that have sudden peaks in their demand for a.o. ICT services, under influence of the law, market developments and/or their competition. But this flexibility is not the ideal solution for all workers and consultants.

In order to have a fair possibility to choose between a fixed and flexible future, the keywords for workers are ‘freedom of choice’. I had a fair possibility to choose for a flexible future and so I did; with heart and mind.

But consultants with fixed contracts, who were ‘fired and hired back’ as freelance consultants did not have a fair choice. And neither did workers in the building industry, the postal services or the healtcare, homecare and facilitary services industry, who became freelancers ‘at gunpoint’ , in order to keep their jobs.

The latter are definitely excesses of the enduring economic crisis and the panic that this caused among many commercial services, transport and building companies.

And having freedom of choice means also that some people don’t want to choose for flexibility, for all the right reasons.

Last week was the week of the King’s Annual Speech about the ‘State of the Kingdom’.

In the eyes of The Future Group – my current employer at which I reside as a partner – it had been a very disappointing speech, as it did not give enough attention to the Dutch labour market and its trend towards more flexibility.

The executive management of The Future Group printed an official response to the King’s Speech, of which I print the pertinent snippets, accompanied by my comments.

Impulses for a future-proof labour market policy are lacking.

In the Spending Bill for The Netherlands (aka The Miljoenennota), it is stated that the way in which people work is changing rapidly. Fixed contracts on the labour market are less and less standard and the number of freelance professionals and flexible contracts is growing. The Bill points at the growing oppression of lower and medium educated people, in favour of higher educated workers, as a consequence of a shift in demand and supply, especially due to technological developments.

On top of that, it states that the chance that people are forced to accept a flexible contract, is growing. In the process, politics is first and foremost looking at forced independence and fake constructions. In other words, to the threats surrounding the rapidly growing numbers of freelancers, instead of looking at the chances that are lying ‘around the corner’ for independent knowledge workers. We doubt whether the current labour market policy is meeting the requirements of the ongoing paradigm shift towards more flexibility in the Dutch labour market.

My comments: I sympathize with the opinion of The Future Group (TFG) and I know that they are very interested in reading much more about the chances and opportunities for well-educated, freelance knowledge workers and about the way in which the Dutch government will enable this development towards more flexibility for highly educated personnel.

I understand that the executive management of TFG is therefore disappointed about the contents of the Spending Bill. Still, the keywords here are again ‘freedom of choice’, in my humble opinion. There is not a single freelance worker within The Future Group, who was forced at gunpoint to become freelancer. Really…

Yet, there are numerous workers in the building industry, numerous homecare workers and numerous postmen, who did not have the luxury of this freedom of choice. Therefore it is very important that the government sympathizes with them and looks carefully after their situation indeed; even when this care is not exactly translated in the most sensible policies yet.

The Advice department of the Council of State (i.e. Raad van State) mentions that the growing number of freelance professionals has also been the consequence of the faltering functioning of the existing political arrangements on a labour market that comprises of increasingly diverse labour relations. This Advice body also states that this should not lead to a desire among the central government “to bring this phenomenon back to a pattern in which the classic labour agreement is the standard (i.e. the fixed labour contract)”.

My comments: I am very aware that the world has changed during this enduring economic crisis, that already lasts for seven years. Flexible labour became more and more important for companies in their struggle for survival and this is a development that will probably not change in the coming years.

However, where The Future Group looks at this development from a positive stance – hence, flexible professional labour is of course TFG’s core business – I think that the government has the responsibility to both stimulate the freelancers ‘out of free choice’ and protect the ‘basically against their will’ freelancers from employers ‘playing for keeps’ at the expense of their personnel.

On top of that, in my humble opinion it is much too early to declare the fixed labour contract ‘dead and buried’…

At this very moment the demand for flexible personnel is soaring and I have little doubt that the demand for fixed personnel will grow again too, in a few months or years. As I stated before, no personnel is more loyal than the personnel of a goodhearted employer, having a fixed contract. Many employers will soon learn that lesson when their flexible personnel demands a better remuneration and education ‘or else’ …

Fake constructions will be a thing of the past in 2016, according to State Secretary Wiebes, as there will be the ‘model agreement’ in which, next to the freelance entrepreneur, also the trade and industry will be kept responsible. It is the question, however,  whether this will indeed lead to an improvement, as yet again the fixed labour agreement is the standard, instead of flexibilisation. This summer, professor Sweder van Wijnbergen of the University of Amsterdam stated “that the current, fixed labour contract, in which Minister Lodewijk Asscher of Social Affairs want to keep everybody, became internationally untenable”.

Professor Sweder van Wijnbergen, photographed during
 BNR Newsroom in January 2013
Picture copyright of Ernst Labruyère
Click to enlarge

A recent inquiry, held  among one hundred Medium and Large Enterprises by The Future Group, pointed out that 85% of these companies is looking for an intermediate form, in which companies can bind people, without falling back in the limitations of the current labour agreement.  

The current national policy is aimed at the stimulation of steady jobs with fixed contracts at the expense of hampering the increase of the number of freelance professionals. During the economic crisis, according to many the crisis itself was the cause for forced independence of personnel. In the meantime it became clear that the number of freelancers remains growing after the crisis and that flexibilization is a social-cultural phenomenon. Society changes, there is a growing individualism and a strong demand for self-development: having a profession of one-self. With the current policy, the Cabinet does nothing, thus missing a chance to reinforce the Dutch trade and industry.

As I mentioned earlier in this article, the government has the responsibility to both stimulate the freelancers ‘out of free choice’ and protect the ‘basically against their will’ freelancers from employers ‘playing for keeps’ at the expense of their personnel.

Of course, 85% of the companies wants more flexibility and less impeding statements in their labour contracts. These companies should remember, however, that many people among their personnel are suckers for a kind of security and some job guarantees, so that they know they can pay the next mortgage and energy bill and will not be tossed away like a pair of old boots.

What the Dutch government should do first and foremost is diminishing the risks of hiring people under a fixed contract. For instance by reducing the time that companies are responsible for the remuneration of their fixed personnel in case of non work-related illness and injuries.

A one-man business is reluctant to contract fixed personnel, when it remains responsible for long term salary payments in case of illness or injury. Two sick personnel members and the business can close. So a future health insurance act should offer a better safety net for these small businesses than the current one does.

With the last paragraph, TFG is preaching for its own parish of highly educated and intelligent freelancers ‘out of their own choice’. People like me and others.

However, not everybody is cheering for such a future of total flexibility and independence, without a social safety net. For many lower educated people this is rather a source for worries and discomfort than a bright future. Therefore Dutch politics should not see flexible labour as THE single future of labour. It simply isn’t …

While I agree with TFG that the Dutch government should not hamper the emergence of satisfied, highly educated freelance professionals ‘out of choice’ with stringent regulation, the same government has a heavy duty to protect vulnerable people from selfish employers, which don’t want to invest one penny too much in their own personnel.

As I stated before, for some people a freelance or flexible contract is nothing less than a nightmare, which keeps them awake at night during times of low employment. These people ought to have fixed contracts, in which they can show their loyalty and hard labour to their loyal employers. Flexible labour is not and will not be the cure for every problem in the Dutch trade and industry, so it should not be treated like that.

Simply put, there will always be fixed labour contracts; not in the last place for all those executive managers who are pleading for more flexibility in the labour market. These guys and ladies certainly don’t want to have their own jobs at stake, wouldn’t they?!

Besides that, I am also convinced that many companies will rethink their flexible labour strategy, when their flexible personnel runs away during a strong demand market, looking for much higher wages… 

Flexibility works in two directions and at least one of those two directions is not always the right one….

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