The Netherlands is at the bottom of a ranking of the world’s 89 most important economies when it comes to labour shortages, according to the latest report on the Dutch business climate by the University of Amsterdam and research agency SEO.

The shortage of staff is one of the reasons why one in five companies are considering partly or completely moving abroad, the report, carried out on behalf of the economic affairs ministry, said.

This year, the business climate was rated an average of six out of 10 by the national and international companies in the survey. “It is the second consecutive year that the business climate rating has declined, following an average of 6.7 in 2022 and 6.4 in 2023,” says Henk Volberda, professor of strategy and innovation at the UvA.

“The most noticeable declines are seen in the ratings for energy infrastructure, the tax climate, and red tape. But the rating for the availability of talent is also decreasing,” he said.

This year, businesses were asked for the first time about their assessment of the stability and predictability of government policy. “That was immediately the lowest-scoring of all fourteen dimensions in our research,” Volberda said.

Dutch companies have expressed repeated concern about the right-wing government’s policies, saying some will have a serious impact on their operations.

One area in the Netherlands’ favour is the “good knowledge infrastructure” thanks to its universities and research institutes, the survey found. However, the government is planning to slash €200 million from its research budget and discourage foreign students from coming to the country.

“These are the students that work in our companies,” Volberda told the AD.

The shortage of skilled labour is a major problem and threatens the future of some firms, he said. The right-wing government is also planning to take action to reduce the number of people coming to the Netherlands to work.

“It is only right to take action about the exploitation of cheap foreign workers who come for jobs in greenhouses, slaughterhouses, distribution and healthcare,” he said.

“But a blunt measure to limit labour migration can also hit the food, healthcare and distribution sectors. And technology companies which can’t find staff will go away.”