If you are looking to outsource your payroll processing, there are plenty of professional service providers out there, and many will offer complete payroll solutions to enable you to concentrate on your core business. This applies to the U.S. as much as it does to Europe, and the Netherlands is no exception. However, the Dutch do like to do it differently.
In the Netherlands, the definition of a payroll and basic payroll solutions is the same as other regions of the world. A company looks for an external agency to coordinate wages and salaries for a certain period of time, as well as essential official documentation. It includes charges for services rendered by the agency and can ensure that employees are paid on time, with the right tax deductions, holiday pay and so on. It eases the administrative workload for the employer, but has a number of less obvious, yet highly beneficial knock-on effects, especially when it’s done the Dutch way.
So, in the Netherlands, the payroll service provider actually employs your staff. You give them the roles and responsibilities of a ´normal´ member of staff, and their employee rights and interests are fully protected by the collective employment agreements. In the Netherlands, these were revised in 2012 under the Collectievear beids overeen komstvoor Uitzendkrachten (Collective labour agreement for temporary workers). You could of course compare this to how employment agencies work, but ´payrolling´ the Dutch way leaves a company free to recruit whomever they want, without having to pay a premium for recruitment services.
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This means that the Dutch payroll service provider can keep the costs down while taking away even more of the stress and responsibility of being (or becoming) an employer.
Let´s put this into context: In the Netherlands, companies are expected to comply with extremely stringent employment laws, which make hiring and firing an inflexible and risky business. No-one doubts that this is a valid and necessary way of protecting employees’ rights, but it does make it very difficult for businesses in the Netherlands to respond to the ups and downs of the current economy. In response to this, Dutch payroll service providers offer an alternative that protects the employee’s rights and provides them with a level of employment equal and sometimes better than the ‘normal’ way of doing things.
It’s a win-win situation. The employees can start working for companies that might otherwise struggle to take them on, small businesses for example, or for companies that run too much risk in the current economic climate. Simultaneously, companies can hand over the financial and legal risk of taking on staff, whilst reaping the benefits of a flexible, hand-selected and motivated workforce.
This means peace of mind and gives everyone the room they need to excel in what they do best. It’s a professional and successful way of outsourcing an essential part of running a business, one that is currently growing in popularity in the Netherlands. Would it work in your economic environment? I’d be very interested in finding out.
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