Youth hiring cools faster than the rest of Dutch labor market

Demand for entry-level and junior workers in the Dutch labor market is falling faster than average, according to staffing firm Randstad. Some have blamed the decline on the rise of artificial intelligence (AI), but labor-market analyst Bart van Krimpen from Randstad said during an online presentation that it has more to do with swings in the economy.

Vacancies for entry-level roles now standmore than 30 percent below their 2022 level, when labor-marker tightness peaked. Since that peak year, demand for young workers has dropped more sharply than demand for mid-level or senior staff.

AI is becoming more visible in the labor market, Van Krimpen said, but it is “far too simplistic” to claim that the technology is wiping out starter jobs on a large scale. A more plausible explanation, according to Randstad, is that a cooling labor marker shows up first among the young. Youth unemployment, for instance, also rises and falls more sharply when economic growth patterns shift.

That does not mean AI and automation have no effect anywhere, Van Krimpen added. Demand for juniors is falling faster than average in IT and administrative roles - the same fields where AI is expected to deliver the largest productivity gains.

Randstad also notes that the number of people outside the labor market is leveling off after years of rising participation. Among young people who have left school or university, a growing share is remaining on the sidelines. Unemployment among the youths has risen as well.

There has also been an increase in people who are out of work because of illness or who enter the WIA, the Dutch disability-benefit scheme. Young people are not the largest group among those dropping out, but they account for the steepest rise. Especially troubling, Randstad says, is that only one in five people who leave the WIA do so because they return to work.

Jeroen Tiel, CEO of Randstad Groep Nederland, called it an “enormous social responsibility” to help young peoplöe find work and stay emplyoed. “Vulenerable young people and thelong-termaick togetherrepresent agrowing unused labor resevrve,” he said. ”That is not only socially painful.In an economy with a structuralshortage of people, it is simply no longer defensible.”