Employment Growth Through Greater Flexibility

IESE's Sandalio Gómez opts for the Dutch employment model

20/02/2014

Sandalio Gómez

IESE professor Sandalio Gómez has emphasized the importance of part-time work as a tool for generating employment, insisting that business and union leaders need to implement changes to ensure more part-time contracts are made available.

A study entitled, “Part-time Contracts in Holland and their Application in Spain”, presented by Gómez this week in Madrid, claims that these types of contracts are a viable source of net growth of employment. Yet in Spain, part-time contracts account for only 14.7% of the total, five points below the European average.

“Spain cannot afford the luxury of ignoring part-time employment,” Professor Gómez stated in his presentation, while underlying the necessity to develop “an open, positive attitude in relation to this type of contract, as well as to training contracts.

In Spain, part-time contracts have been associated with positions requiring few qualifications and with little possibility of promotion, making their acceptance a very slow process. According to Gómez, “The unions perceive them as precarious jobs with poor working conditions, and businesses maintain that part-time employees are less productive and have less invested in the company.”

But Gómez has found just the opposite to be true. He maintains that rather than inhibit productivity, part-time employment “offers more flexibility to companies and that employees are more productive.” Yet, despite evidence to the contrary, it has been difficult to change the negative perception of part-time employment.


Improvements in Labor Reform

Gómez is optimistic about the future. “Advances are being made that will favor the implementation of part-time employment contracts (in Spain)”, he says. Among those advances, the study outlines the following areas:

  • Prohibiting overtime of part-time employees’ hours 
  • A law which establishes long-term employment contracts
  • Reduced working hours to allow for child care 
  • Updating part-time and trainee contracts at companies and freelance businesses which employee workers under 30 years old 
  • In the calculation of Social Security payments during periods of part-time employment 
  • Self-employed workers who hold additional part-time employment will be permitted the same fiscal benefits as a full-time contracted workers

The study, led by Sandalio Gómez, proposes additional recommendations aimed at creating the conditions necessary to generate employment as well as facilitating the relationship between work and family life. Among other recommendations highlighted are new legislative reforms which call for more flexible timetables, and a pact between government, unions and business leaders to increase the number of part-time contracts.


The Dutch Model

While in Spain a mere 14.7% of contracts are part-time, The Netherlands’ part-time work force is 49%. “The Netherlands has the highest rate of part-time contracts in the world. It is the leading economy based on part-time employment,” says Gómez.

According to the study, the regulations pertaining to part-time contracts in The Netherlands have benefited family life, a benefit which has also had a positive effect on generating employment (the unemployment rate in Holland is 7%). And hiring part-time workers has not affected the country’s level of productivity.

Holland’s expansion to part-time employment gained popularity in the 1970s when it became necessary to incorporate women into the labor force. In the following years, the push to change employment contracts was achieved through a consensus between the government, business leaders and the unions. In the 1990s it was reinforced through anti-discrimination laws in the workplace.

In 1996, the country introduced “Equal Treatment under the Law”, whereby a part-time worker is entitled to the same pro rata salary, unemployment benefits, pension and bonus as a full-time employee.