What’s the most flexible way to hire contractors in the Netherlands?
Many businesses have a need for temporary workers or contractors. Maybe your business is seasonal or you’re a start-up looking to grow fast but are unsure of your future staffing needs. In some sectors, project work is the norm and scaling up and down in response to business challenges happens all the time.
If you’re recruiting contractors in the Netherlands, you can either hire them yourself or use an Employer of Record (EOR) provider. The EOR is effectively the contractors’ employer and deals with all payroll administration, including tax and other deductions. But, the EOR option has other important benefits for employers in the Dutch employment market.
• EOR gives you maximum team flexibility
If you are an employer and hire contractors directly, you have to pay them for the entire duration of that contract. There are some exceptions to this, such as if the contractor has committed theft or been physically abusive. But, in normal circumstances, even if your business needs change you are still obliged to pay the contractor for the entire contract period.
However, under an EOR arrangement, the Collective Labour Agreement for temporary agency workers applies instead. That means the EOR provider has to give contractors the following notice periods for the expiry of their employment contract:
0 to 12 working weeks : 0 calendar days
12 to 26 working weeks : 5 calendar days
26 to 52 working weeks : 10 calendar days
52 up to and including 78 working weeks : 14 calendar days
If, at any point in those first 18-months, your business needs change or you find that the contractor is not a good fit with your team or company culture, you can simply give the relevant notice period. No questions asked, no legal process and no need to compile a file of evidence or negotiate with the contractor.
• EOR is a low risk option for employers and employees
Recruiting permanent team members can be difficult, time consuming and – if you get it wrong - expensive. It’s impossible to put a precise figure on the costs of a bad hire, but you’ll have spent time and money recruiting, onboarding and training. There’s also the potential for strained customer relationships, missed sales opportunities and low morale amongst other team members.
Terminating a permanent employment contract after the one-month trial period is complex. You can’t simply give them notice even if you are not satisfied with the quality of the work. Instead, you would need to build up a file of evidence, give multiple written warnings and establish an improvement plan for the individual.
Taking on a permanent role is also a risk for the employee. It’s not always easy for them to tell at the interview if they’ll enjoy the job, or get on with their new colleagues. To minimise these risks, some businesses offer ‘temp to perm’ roles. Using the EOR route, the temporary worker or contractor can start their role in your business and, if they do well, and both parties are happy, you can employ them on a permanent basis at the end of their contract.
In summary, the EOR option gives you the flexibility your business needs. It also reduces your risk. A bad hire has a severe impact on all parties involved and a temporary contract is a way of making sure a candidate is the best fit for the job and your company culture.
We are always happy to advise employers and recruitment agencies on the best options for their Dutch employment contracts. If you have any questions, please get in touch.