Reducing the foreign workforce in the Netherlands will impact the economy!

Government measures aimed at reducing the number of foreign workers entering the Netherlands are expected to significantly impact employment and prompt some companies to partially relocate abroad, according to the latest Dutch Innovation Monitor.

In response to restrictions on hiring workers from the EU and other regions, companies are likely to try to replace them with Dutch employees, implement energy efficiency initiatives, and retrain existing staff. However, about 25% of firms anticipate relocating production elsewhere, while another 25% may be forced to downscale operations.

The monitor highlights that companies relying on low-skilled labour are more likely to focus on automation and hiring Dutch workers, whereas those employing highly skilled foreign workers are more inclined to shift part of their production abroad.

Currently, around half of Dutch firms employ at least one foreign worker.

The new government plans to introduce stricter regulations for bringing in non-EU nationals on highly skilled migrant visas and to limit the number of international students.

Employers in sectors with large international workforces, including Boskalis and ASML, have already expressed concerns that these new rules will impact their operations and may lead to partial relocation abroad.

Economists and the head of the government’s labour inspectorate have called for a reconsideration of the Dutch economic model to reduce dependence on low-skilled foreign labour.

Sectors such as farming, logistics, and the meat industry, which rely heavily on low-cost labour, have been criticized for their minimal contribution to the economy.

CPB researcher Gerdien Meijerink noted in an April interview with Parool that the impact of government economic policies on migrant labour is greater than often assumed. "When discussing migration, it’s impossible to separate it from economic policy," he stated. "Even now, discussions on limiting migration tend to focus mainly on legal measures and border controls."