Final Project - InterNexus - NN Group

Team 109
InterNexus
NN Group
The Future of Labor and Human
Resource Strategies:
The Flexible Labor Model

2
Executive Summary
NN Group is currently surveying the possibilities to restructure its labor force. In doing so, NN
Group proposes a flexible labor model in which companies from different branches work
together to educate graduates, and after a few years place them into a pool of preferred
freelancers with guaranteed commissions. This paper has investigated the thirteen countries
where NN Group is active in order to assess whether an implementation of the flexible labor
model in these countries could be successful.
Through conducting an SWOT-analysis on literature about flexible labor (models),
eleven variables could be identified that determine the successful implementation of NN’s
model. This theoretical framework formed the protocol for the case study research on the
thirteen countries where NN Group is active. Subsequently, all countries in question were
assessed to what extent they possessed the independent variables – and thus would be
considered as having the conditions for a successful implementation of NN’s flexible labor
model.
Specifically, research on the thirteen countries where NN Group is active has concluded
that Belgium, Czech Republic, Netherlands and Slovakia are recommended for implementing
NN Group’s flexible labor model. On the other hand, the other nine countries are not regarded
as possessing the conditions for a successful implementation of NN Group’s flexible labor
model. In general, NN Group should take notice of the fact that the proposed model cannot be
‘copy-pasted’, but that it should be contextualized relating to the particular circumstances of
the country in question. Moreover, further study should be conducted to clarify whether other
continents are perhaps more fruitful with regards to the successful implementation of NN’s
flexible labor model.

3
Douwe Meuldijk Netherlands s1147307
Áron Miszlivetz Hungary s1305786
Sebastian Loerke Belgium s1236237
Kimberly Snoeijers Netherlands s1114271
Alexandra Ghidoarca Romania s1298607
Diederik de Groot Netherlands s1025651
Federico Brovelli Italy s1273264
Isabelle Scholte Netherlands s1293951
Mauro Spadaro-Tonin Germany s1280163
Noortje Minkhorst Netherlands s1241508
Alexander May Rasmussen Denmark s1294369
Kelly Kolkman Netherlands s1298518
Tamara Reygers Brazil s1217054
Miriam Adelina Ocadiz Arriaga Mexico s1269364
Dr. S.R. Koendjbiharie
S. van Rijswijk MSc MPhil
BA International Studies
Leiden University
01-05-2015

4
Table of Contents
Executive Summary .............................................................................................................................. 2
Table of Contents................................................................................................................................... 4
Introduction ......................................................................................................................................... 10
Research Questions and Objectives................................................................................................... 11
Literature Review................................................................................................................................ 13
Introduction....................................................................................................................................... 13
Strengths............................................................................................................................................ 13
Weaknesses........................................................................................................................................ 16
Opportunities..................................................................................................................................... 18
Threats............................................................................................................................................... 22
Conclusion......................................................................................................................................... 25
Theoretical Framework ...................................................................................................................... 26
Diagram of Theoretical Framework ................................................................................................. 30
Conceptualization................................................................................................................................ 32
Operationalization............................................................................................................................... 32
Research Findings ............................................................................................................................... 35
Belgium.............................................................................................................................................. 35
Political.......................................................................................................................................... 35
Economic....................................................................................................................................... 36
Socio-cultural ................................................................................................................................ 38
Legal.............................................................................................................................................. 39
Czech Republic.................................................................................................................................. 40
Political.......................................................................................................................................... 40
Economic....................................................................................................................................... 42
Socio-cultural ................................................................................................................................ 43
Legal.............................................................................................................................................. 44
Netherlands ....................................................................................................................................... 45
Political.......................................................................................................................................... 45
Economic....................................................................................................................................... 47
Socio-cultural ................................................................................................................................ 48
Legal.............................................................................................................................................. 49
Slovakia............................................................................................................................................. 50
Political.......................................................................................................................................... 50

5
Economic....................................................................................................................................... 52
Socio-cultural ................................................................................................................................ 53
Legal.............................................................................................................................................. 54
Conclusions, Discussions and Recommendations............................................................................. 57
Belgium.............................................................................................................................................. 57
Conclusion..................................................................................................................................... 57
Discussion ..................................................................................................................................... 57
Recommendation........................................................................................................................... 58
Czech Republic.................................................................................................................................. 58
Conclusion..................................................................................................................................... 58
Discussion ..................................................................................................................................... 59
Recommendation........................................................................................................................... 60
Netherlands ....................................................................................................................................... 60
Conclusion..................................................................................................................................... 60
Recommendation......................................................................................................................... 621
Slovakia............................................................................................................................................. 61
Conclusion..................................................................................................................................... 61
Recommendation........................................................................................................................... 62
General Conclusion........................................................................................................................... 63
Bibliography ........................................................................................................................................ 65
Literature Review .............................................................................................................................. 65
Strengths........................................................................................................................................ 65
Weaknesses ................................................................................................................................... 65
Opportunities................................................................................................................................. 66
Threats........................................................................................................................................... 67
Research Findings............................................................................................................................. 68
Belgium ......................................................................................................................................... 68
Czech Republic.............................................................................................................................. 69
Netherlands.................................................................................................................................... 71
Slovakia......................................................................................................................................... 74
Appendix .............................................................................................................................................. 77
Appendix 1: Case Study Protocol...................................................................................................... 77
Appendix 2: OECD entry rates into university-level education........................................................ 78
Appendix 3: Percentage of graduates in OECD-countries in 2012 .................................................. 78
Appendix 4: Dutch government participation in public and private corporations in 2012 and 2013
........................................................................................................................................................... 79

6
Appendix 5: Number of Dutch HBO and WO-graduates in the period January 2002 to November
2012................................................................................................................................................... 80
Appendix 6: Number of Dutch Master/PhD-graduates in the period January 2002 to November
2012................................................................................................................................................... 81
Appendix 7: Percentage of people with a high level of education in the Netherlands within the age
range of 15-64 years for the period 2001 to 2011............................................................................. 81
Appendix 8: Percentage of Dutch people enrolled in tertiary education in 2012............................. 82
Appendix 9: Confidence that unknown companies pay their bills among companies in the
Netherlands ....................................................................................................................................... 82
Appendix 10: Trust-relations between Dutch companies in times of crisis....................................... 82
Appendix 11: Bulgaria ...................................................................................................................... 83
Political.......................................................................................................................................... 83
Economic....................................................................................................................................... 84
Socio-cultural ................................................................................................................................ 85
Legal.............................................................................................................................................. 86
Discussion ..................................................................................................................................... 86
Conclusion..................................................................................................................................... 87
Appendix 12: Greece......................................................................................................................... 87
Political.......................................................................................................................................... 87
Economic....................................................................................................................................... 89
Socio-cultural ................................................................................................................................ 90
Legal.............................................................................................................................................. 91
Discussion ..................................................................................................................................... 91
Conclusion..................................................................................................................................... 92
Appendix 13: Hungary ...................................................................................................................... 92
Political.......................................................................................................................................... 92
Economic....................................................................................................................................... 94
Socio-cultural ................................................................................................................................ 95
Legal.............................................................................................................................................. 96
Discussion ..................................................................................................................................... 96
Conclusion..................................................................................................................................... 97
Appendix 14: Japan........................................................................................................................... 97
Political.......................................................................................................................................... 97
Economic....................................................................................................................................... 99
Socio-cultural .............................................................................................................................. 100
Legal............................................................................................................................................ 101
Discussion ................................................................................................................................... 102

7
Conclusion................................................................................................................................... 103
Appendix 15: Luxembourg .............................................................................................................. 103
Political........................................................................................................................................ 103
Economic..................................................................................................................................... 105
Socio-cultural .............................................................................................................................. 106
Legal............................................................................................................................................ 108
Discussion ................................................................................................................................... 108
Conclusion................................................................................................................................... 108
Appendix 16: Poland....................................................................................................................... 109
Political........................................................................................................................................ 109
Economic..................................................................................................................................... 111
Socio-cultural .............................................................................................................................. 112
Legal............................................................................................................................................ 114
Discussion ................................................................................................................................... 114
Conclusion................................................................................................................................... 115
Appendix 17: Romania.................................................................................................................... 115
Political........................................................................................................................................ 115
Economic..................................................................................................................................... 117
Socio-cultural .............................................................................................................................. 118
Legal............................................................................................................................................ 119
Discussion ................................................................................................................................... 119
Conclusion................................................................................................................................... 120
Appendix 18: Spain ......................................................................................................................... 121
Political........................................................................................................................................ 121
Economic..................................................................................................................................... 123
Socio-cultural .............................................................................................................................. 124
Legal............................................................................................................................................ 126
Discussion ................................................................................................................................... 127
Conclusion................................................................................................................................... 127
Appendix 19: Turkey ....................................................................................................................... 128
Political........................................................................................................................................ 128
Economic..................................................................................................................................... 130
Socio-cultural .............................................................................................................................. 132
Legal............................................................................................................................................ 133
Discussion ................................................................................................................................... 133
Conclusion................................................................................................................................... 134

8
Appendix 19: Bibliography ............................................................................................................. 135
Bulgaria ....................................................................................................................................... 135
Greece.......................................................................................................................................... 135
Hungary....................................................................................................................................... 137
Japan............................................................................................................................................ 138
Luxembourg ................................................................................................................................ 139
Poland.......................................................................................................................................... 141
Romania....................................................................................................................................... 142
Spain............................................................................................................................................ 144
Turkey ......................................................................................................................................... 147

9
Introduction
& Research Question

10
Introduction
Nationale-Nederlanden Group (NN)
NN Group is an insurance and investment management company active in more than 18
countries. Established in 1845 in the Netherlands, it has become a multinational that employs
over 12,000 people and has strong presences in Netherlands, Belgium, Luxembourg, Poland,
Romania, Bulgaria, Hungary, Czech Republic, Slovakia, Greece, Spain, Turkey and Japan. Its
investment management branch offers services in several countries in Europe, US, Middle East
and Asia. NN Group exists of Nationale-Nederlanden, ING Insurance Europe, ING Life Japan,
and ING Investment Management. Its main objective is to help ensure the financial future of
their customers.
NN Group’s future plans
Traditional working models assumed people to work at one company in a lifetime. However,
workers switch employers more rapidly than ever before. Today’s extremely dynamic markets
represent a challenge for companies. As a response NN Group is currently surveying the
possibilities to restructure its labor force. One study is concerned with the mobility of
employees not being restricted by non-competition and confidentiality clauses in contracts. It
proposes a flexible labor model in which companies from different branches work together to
educate graduates, and after a few years place them into a pool of preferred freelancers with
guaranteed commissions. This model ensures that both employers and employees enjoy a
maximum of freedom of action with the companies’ investments and the workers’ social
security at an acceptable level of safety.
Possible challenges to these plans
Factors such as legislation and jurisprudence, and demands and rights of trade unions hinder
the introduction of this model in various parts of the world. In addition, cultural attitudes,
historical background, economic situations and political climates all play an important role.
Furthermore, the level of competitiveness of each country differs greatly, making cooperation
between competitors difficult.

11
Research Questions and Objectives
Every implementation of a flexible labor model should be altered according to the country’s
context (Madsen 17). After all, labor markets worldwide are the product of local socio-
economic developments, and just ‘copy-pasting’ the model is therefore not an option (ICF
International 12). It is therefore argued that NN’s proposed flexible labor model should be
contextualized relating to the particular circumstance of the country in question (Sultana 145).
As a result, this paper will answer the following research question:
“Can the flexible labor model as proposed by NN Group be successfully implemented in the
countries where NN Group is active?”
With answering the abovementioned research question, this paper aims at giving
recommendations to NN Group whether it is worthwhile to implement its proposed flexible
labor model in the countries where NN Group is active. Moreover, suggestions will be made to
alter the model in countries when the original model will not fit, in order to subsequently
implement NN’s proposed flexible labor model successfully. Finally, only those countries
which have been positively judged in accordance with the research question will be covered in
this project; the research on the other countries will be enclosed in the appendices.

12
Literature Review
& Theoretical Framework
and theoretical framework

13
Literature Review
Introduction
In order to make a valuable analysis for NN-Group on its flexible labor model, it is necessary
to draw upon academics who have elaborated on issues related to flexible labor markets. In
doing so, this paper will make use of a SWOT-analysis (Strengths, Weaknesses, Opportunities,
Threats). By using this analysis, one can identify the different characteristics of the model that
need to be taken into account in order to implement the model successfully. A valuable notion
with regards to analyzing a labor market based on the flexible labor model comes from Madsen.
He admits that every implementation of a flexible labor model should be altered according to
the country’s context (Madsen 17). After all, labor markets worldwide are the product of local
socio-economic developments, and just ‘copy-pasting’ the model is therefore not an option (ICF
International 12). Nevertheless, conducting an all-inclusive examination globally to both labor
market analysis and the design of labor market reforms can inspire those who have to formulate
policies regarding the implementation of the flexible labor model (Madsen 17).
Strengths
One of the most evident cases of a successful flexible labor market in Europe is in Denmark,
where market reforms based on the flexible labor model already started in 1993 (Bredgaard et
al 8). Here, the balance between the several components of Denmark’s current labor market
policy has been demonstrated by the ‘Golden Triangle’ – the interdependency between low job
security and active labor policies, high job-to-job mobility and a generous social security system
(ICF International 7). Together with a strong focus on high quality education, the Danish labor
market exists on a principle known as flexicurity (Wilthagen 10). Based on the conception of
the flexible labor model, the concept of flexicurity is “an integrated policy strategy with the aim
to enhance flexibility and security in the labor market” (Wilthagen 1).
Although the concept of the flexicurity model has its origins in the Netherlands,
Denmark has become one of the most important real-life examples of the flexicurity model
(Madsen 1). Active labor market policies is an crucial element of the Danish flexible labor
market and show that, compared to other EU-member states, a high percentage of the youth is
included in the labor market, despite the fact that there is a relatively low level of employment
protection legislation (Madsen 17). Moreover, well-conceived active labor market policies can
decrease labor market segmentation, and have even resulted, during the present economic crisis,

14
in minor effects on the rise of long-term employment among all demographic groups (Madsen
17). Madsen also states, that the “main success criteria should however be the longer-term
adaptability of the economy to the shifting pressures of globalization” (Madsen 19). Here the
Danish model of flexicurity has proved successful, as it meets the global development of the
increasing demand among employers for more flexibility on the one hand, and the employee’s
increasing demand for security on the other hand (Wilthagen 1).
Kalleberg provides a different input with regard to the strengths of the flexible labor
model. Kalleberg(a) underlines the consequences of a more flexible workforce for workers and
jobs. He argues that all types of changes in society call for a more flexible production and labor
market, so the labor market can keep up with these fast development occurring in technology
and information (Ibid 155). There is thus clearly an increasing gap which the flexible labor
market model can fill. Next to this, Kalleberg(a) argues that there are several benefits for
employers. Next to the improvements in productivity and performance, “some organizations
have been able to save on labor costs by using temporary and part-time workers and thus have
enjoyed greater profits” (Ibid 156). Moreover, with regard to the employees, Kalleberg(a)
suggests that it depends on the amount of “control over resources” (Ibid 171), such as portable
skills, whether a worker can benefit from a more flexible labor market.
In a different article, Kalleberg(b) writes about the new functional-flexibility models
that some companies in USA and UK are currently introducing and describes its main advantage
within the autonomy and flexibility given in more detail. In the recent years, the human resource
management had been changed in order to empower workers with new “[…] skills, incentives,
information, and decision-making responsibilities” (Kalleberg(b) 481). This type of model
should improve the productivity and achieve new business growth. The original labor
organization, which is based on the hierarchical system of the Fordism models, is to be replaced
with new flexible mechanisms. Through an increased participation of the workers in the
decision-making process and in team works, employees will increase the organizations'
functional flexibility with their multiple skills. Furthermore, workers can quickly adapt to new
situations and take their own initiatives instead of being passive (Kalleberg(b) 481).
An organization can also rely on an externalized workforce, which includes different
non-standard employees. Costs can often be reduced with the externalization of administrative
control. Examples of this sort of labor model can be high skilled workers, such as consultants,
or low skilled workers, such as cleaners. (Kalleberg(b) 483). Externalizing some activities is
also an efficient way to protect the core and long-term employees of the organization. In fact,
the non-internal work force can be used as a sort of buffer in order to protect the core workforce

15
in times of economic difficulties (Kalleberg(b) 484).
De Spiegelaere talk more specifically about the strengths of three types of flexible labor
modules – functional, wage, and contractual. The strengths of wage flexibility are normally
referred to the rewards, hence bonuses, that an employee can receive. These rewards can
incentivize greater engagement of employees and also boost their creativity (De Spiegelaere
656). Studies show that this sort of extrinsic reward does stimulate employees to share their
views and ideas to their team and therefore help in the employee driven innovation scheme (De
Spiegelaere 658). Within the functional flexibility there is the possibility of having job rotation
schemes. When employees are frequently allocated different tasks, their knowledge of the
organization increases, including their motivation and capabilities. Furthermore, having a
broader spectrum of skills does increase the ability of being more innovative and creative (De
Spiegelaere 657). The contractual type of flexibility is however, more complex than the former
models. This model addresses the flexibility the employees face in their contracts, which means
that on the macro-level the previous rigidity of employment contracts and the firing and hiring
regulations are more relaxed (De Spiegelaere et al 656). This can be of certain advantage for
firms in need of restructuring their organization in order to avoid bigger losses or even
bankruptcy.
In sum, all three types of flexibility models show certain strengths. Wage flexibility can
indeed be an important addition to a suggested payroll system, which could be part of a flexible
labor model, thus helping firms to improve their view on this model. It is however the functional
flexibility that is most positively related to organizational- and employee innovativeness. While
wage flexibility also gives multiple extrinsic rewards to the employees, functional flexibility
gives the more importantly intrinsic rewards. A final perspective on the strengths of the flexible
labor model comes from Benner, who demonstrates the importance and strength of flexibility
nowadays, substantiated by a case study on Silicon Valley. Silicon Valley is a main player when
it comes to innovation (Benner 3), which makes the economy very successful. Benner argues
that “certain aspects of labor flexibility are critical to the competitive success of Silicon Valley”
(Ibid 4) and that “the ability of Silicon Valley firms to innovate rapidly has been critical for the
region’s economic success” (Ibid 15). As such, Silicon Valley is another example that illustrates
the strengths of the flexible labor model.

16
Weaknesses
Throughout Europe, labor market reforms have been implemented to improve economic growth
and equity. Some of these reforms aim to secure the special combination of increased flexibility
on the labor market and social security, where the point is to combine several different forms
of flexibility with several different forms of security, which is described by the Special Report
of Neujobs as “a combination of loose employment protection legislation (EPL), generous
unemployment benefits and strong efforts on active labor market policies (ALMPs)” (Koster
46). In this particular case, NN Group is surveying the possibilities to restructure its labor force
proposing a flexible labor market model in which companies work together to educate
graduates.
Studies from Green and Leeves investigate the effects of flexible employment on
worker’s wellbeing by analyzing data from the household, income and labor dynamics in
Australia (Green and Leeves 123). The authors introduce the flexicurity model that can be
compared to the flexible labor market model as proposed by NN Group since both models
consider numerous employment contracts throughout the career (Ibid 121). Whereas NN Group
wants to safeguard the workers’ social security workers will inevitably be subject to transitions
between employment and unemployment in the case of flexible employment (Ibid 121). The
authors’ findings indicate that flexible employment can be considered a problem for the flexible
labor market as well as workers in flexible employment encounter more unemployment and
experience increased job insecurity. This has some negative outcomes such as lower wages, job
insecurity and financial insecurity, which hinders the move towards a flexible model of
employment. The author suggests that there would be a need for policies from companies and
government to facilitate the employment transition (Ibid 137). From the view of the policy
maker, “flexibility can be obtained without detrimental effects on workers’ satisfaction if
policies aimed at favoring the use of flexible contracts are coupled with policies aimed at
enhancing employment stability, such as active labor market policies to assist workers in their
transition from one job to another” (Origo and Pagani 554). This should be taken into account
in trying to implement the flexible labor market model in a specific country in order to safeguard
the workers’ well-being.
Burroni and Keune argue how the concept of flexicurity suffers from considerable
shortcomings (Burroni and Keune 75). For instance, the authors regard the concept as
ambiguous, meaning that the translation of flexicurity into policies has been challenging due to
different views on what flexicurity actually entails (Ibid 78). Another shortcoming of the
concept of flexicurity would be the problem of trying to achieve a situation beneficial for both

17
the employer and the employee since the social security of the employee is often not taken into
account (Ibid 86). As mentioned previously, the country in question needs to facilitate the
transition by securing the worker by providing stability, both job- and financial. Again, this
stresses the significance of considering workers’ job security when trying to achieve a more
flexible labor market. Therefore, Burroni and Keune argue that strengthening the connection
between flexibility and security will be of significance when trying to achieve a flexible labor
market (Ibid 87). In the countries that NN operates within, this connection varies greatly and
cannot easily be adapted unless they take into account the local and national conditions.
Another scholar, Sultana, also stresses the ambiguity of the concept of flexicurity. For
instance, there are different types of flexibility such as functional flexibility and temporal
flexibility. In addition there are different types of security arrangement such as job security and
income security (Sultana 148). Furthermore, the author explains as to why flexicurity is
becoming more and more attractive to implement, namely because of globalization and
demographic pressures (Ibid 149). Alike Burroni and Keune, Sultana acknowledges that
security of workers is equally significant as trying to create a more flexible labor market.
Therefore, Sultana argues that flexicurity should be contextualized relating to the particular
circumstance of the country in question (Ibid 145).
Similarly, Wilthagen and Tros emphasize the need for a flexible labor market without
undermining the importance of workers’ security (Wilthagen and Tros 166). In addition, they
stress the importance of favorable economic and labor market conditions since these can
contribute to the success and usefulness of the flexicurity model. For instance, during an
economic crisis, security of workers might be eroded whilst during a booming economy
traditional job security might be favored (Ibid 181). Therefore, the weaknesses of the flexicurity
model regarding the relation between flexibility and security displays significant aspects of a
flexible labor market that need to be taken into account by NN Group when trying to implement
their flexible labor market model.
According to Lefresne, flexicurity has been a weak point of EU employment regulation
and met with union distrust (Conter 10). The implementation of the model highlights the social
and economic differences between the Eastern and Western parts of the EU. Denmark and The
Netherlands have already sustainably implemented flexicurity by allocating sufficient
economic and political resources such as highly trained human capital, capital and good
governance to create a stable basis. However, the European Trade Union Confederation has
argued that there was a “gap between the principle of flexicurity (‘genuine flexicurity’) and the
fact that it was ‘not applied in practice’ (ETUC 9). According to an interview with an

18
international officer of Unite, French and British trade unionists argued that the lack of a
bargaining culture and the absence of high trust-relations make it impossible to implement it in
most member states.
Even where flexicurity has been implemented, there have been concerns about the real
success and sustainability of such model. According to the Economist, “the Danish system of
flexicurity puts too much emphasis on security and not enough on flexibility”. It is also said
that if countries with a high degree of employment protection adapt to the Danish/Dutch model
they need to seek compensation in form of unemployment benefits which can become a burden
in public spending and reduce the incentives of the unemployed to seek employment (Andersen
5). It seems that the model falls short of creating a proper balance between the principle of
“rights and duties” and often do not motivate job seekers. The unemployed will be less likely
to go on an active job search. There has to be a proper incentive to actively seek a job, where
flexicurity is based on an individual needs based benefit system. The model also contradicts the
work ethics of societies where the work culture is different. Madsen argues that the Danish
model and productivity gains are not available for migrants, unskilled workers and people with
health problems. It might seem that the model favors those with the best possible skills,
providing activation offers for the best skilled workers (Madsen 13).
Opportunities
Bentolila et. al. make an extensive analysis of the history of the Spanish labor market both
before and after Spain launched a liberalization of their labor contract flexibility. The article is
very critical towards today’s flexible labor. They especially emphasize the negative
repercussions on the labor market as whole. However, they do give interesting insights in the
opportunities that allowed more flexible labor laws to be implemented in Spain. They suggest
that the relatively high unemployment rate among the well-educated represents a great
opportunity for flexible labor models to be implemented. For the project one can use this source
to investigate how unemployment represents an opportunity for the flexible labor model, NN
Group wants to create.
Chung looks into flexibility of labor markets of the 21 EU member states at the time of
writing in 2006. In eight of these NN Group has a presence, namely The Netherlands, Belgium,
Luxembourg, Poland, Hungary, Czech Republic, Greece, and Spain. It is an interesting read,
not only for the opportunities for flexible labor models the countries possess but also to learn
about the history of their implementation in general. One of the conclusions is that countries

19
where the average company has more flexibility arrangements for employers, it provides more
arrangements for employees as well, and there seems to be more variation in the provision of
the latter than the former. Among such arrangements are flexible working times, leave schemes,
or early retirement schemes. On a country level, there is a positive relationship between the
provision of flexibility arrangements for the needs of workers and those for the needs of
companies. Furthermore, providing flexibility for workers’ needs and flexibility for companies’
needs are not necessarily at odds with each other. In fact, the two may be able to help one
another develop and can be reconciled to have more of a synergy effect towards each other,
which would then provide real flexicurity for both workers and companies. So if a country’s
workforce is generally more open towards the idea of flexible labor, if provides great
opportunities for NN Group.
To identify the opportunities for the flexible labor model, it is important to identify the
criteria for a flexible labor market. Klau and Mittelstadt argue that there are four aspects of
labor market flexibility: real labor cost flexibility at the economy-wide level, adaptability of
real labor costs across occupations and enterprises, labor mobility, flexibility of working time
and working schedules (Klau & Mittelstadt 10). They expand upon each of these criteria by
giving concrete examples of how they can be achieved on a national-level labor market. First,
aggregate labor cost flexibility would mean that real-product wages and related non-wage costs
can immediately and fully be adjusted to a change in productivity levels or terms of trade (Ibid
10). Second, and more relevant to the research, is that the condition of adaptability of real labor
costs across occupations and enterprises, is argued to depend on two dimensions: the
adaptability of wages to the changing scarcity of skills, and the adjustment of wages to the
earning power of individual firms (Ibid 12). This is an precondition for a flexible labor market
that if present in a country’s economy, can present an opportunity for NN Group’s flexible labor
model.
To move on to a case study for opportunities for the flexible labor model, literature on
“Agenda 2010” can be reviewed. Deutsche Welle, Germany’s international broadcaster reviews
the reforms that were implemented in Germany in 2003 called “Agenda 2010”. Of most
relevance, Agenda 2010 entailed the reform of the German labor market to make it more
flexible. Not only did it become easier for employers to fire and hire employees, the policies
also cut back on spending on unemployment benefits and required companies to immediately
inform the Federal Labor Office when an employee has been given notice (“A quick guide to
Agenda 2010” 1). This information can help us better understand the perceived success of
Agenda 2010, which is often accredited with Germany’s success in withstanding the recession

20
and its economic incline in the last decade (Barkin 1). An opportunity for the flexible labor
market presents itself when it can be compared to proven successful reforms in the past. This
means that the flexible labor model might have a good chance of being supported by the German
government and also businesses that have reaped the benefits of the Agenda 2010 reforms.
A more recent article published in 2013 points to the concerns of a small group of
politicians and economists fearing that Germany’s current government is unwilling to expand
upon the Agenda 2010 reforms thereby losing its competitiveness (Barkin 1). This article
provides us with more current information on how the Agenda 2010 reforms can serve as an
opportunity for the flexible labor model since it can be presented as an answer to the concerns
of this “small but vocal group” (Ibid 12). The weakness of both sources is that media
broadcasters, thus not being academic, publish them. Furthermore, one must be reluctant in
relying on opinion in these cases. To supplement the knowledge on Agenda 2010 the article by
Camerra-Rowe “Agenda 2010” can be analyzed. This article provides us with information on
the origins and the impact of the Agenda 2010 reforms. It is a peer-reviewed academic article,
and therefore potentially more reliable than the media articles.
Sánchez covers the different aspects of labor flexibility and debates under what
conditions it can best exploit opportunities for expansion. Capability Theory (Teece 509):
predicts that the firm’s ability to build and reconfigure internal and external competencies to
respond to rapid changes in their environment lies at the centre of innovativeness. There are
two categories for a labor force of a company: the internal labor force (or 'core' labor force),
which consists of long-term employees, and the external labor force that consists of short-term
labor force (usually exterior to the company). Then there is the Internal HR Flexibility Theory:
Internal HR flexibility includes functional flexibility and internal numerical flexibility. First,
functional flexibility means a process through which firms adjust to changes in the demand for
their output by an internal reorganization of workplaces based on multi-skilling, multi-tasking,
teamwork, and the involvement of employees in job design and the organization of work.
Internal numerical flexibility refers to the ability to change the size of the company's internal
labor force. Sánchez formulated the following hypothesis: The greater the firm’s functional
flexibility, and internal numerical flexibility, the greater the firm’s innovativeness (Sànchez
719). While numerical flexibility relies entirely on the ability of letting go part of the firm's core
labor force, functional flexibility is concerned with the free movement of labor within a firm.
Useful methods to enhance functional flexibility include re-allocating tasks among employees
and retraining of the labor force.
Globalization has increased economic competition and added pressure on companies to

21
have a more flexible labor force. The recent waves of migration brought, to some degree,
cultural diversity to Japan that is something entirely new. Although the migrant workforce is
often limited to temporary jobs, since the economic recession of the late 1990's employers have
begun to hire workers of foreign background as long-term employees. An opportunity for
improving the flexibility of labor in Japan lies in improving the education standard of the
migrant part of the population. Indeed, with better general knowledge of the Japanese language
and culture there would be much room for improved socio-economic integration of the migrant
population. Studies show the migration of foreign labor to Japan is a relatively new
phenomenon. There are two main factors as causes for this phenomenon: the economic
recession of the late 90’s and the aging of the Japanese population. According to Takenoshita,
the increased amounts of migrant workers is happening jointly with the flexibility of labor in
Japan and will doubtlessly be a determining factor in shaping the future Japanese labor market.
In an article by Høj, he presents a case study of the Dutch housing market: improving
the flexibility of labor to enhance labor mobility. This is very valuable when seeking to learn
more about the dynamics of labour markets. The Netherlands has a very rigid housing market,
which brings down employment rate and can potentially lead to misallocation of labor. The
rigidity of the housing market arises from excessive government intervention. One should aim
to identify the policies that made the Dutch housing market rigid. Then, one should attempt to
analyze what may be the most efficient way to alter these policies to achieve a high level of
labor flexibility. The author identifies several reasons for government intervention: 1) there is
a relatively small supply of houses for the high population density and 2) in order to preserve
living environments, the Dutch government makes use of restrictive land use policies. In
addition, Høj lists one more policy change necessary to achieve labor flexibility: subsidies to
the housing sector should be removed. Because government subsidized the rental of housing in
the Netherlands, the purchasing and selling of housing is taxed. In this indirect manner, the
Dutch government is sure to limit the creation of additional housing.
The case study of the Dutch housing market demonstrates how labor can be made rigid
via government intervention. Minimal government intervention in a particular sector is thus
necessary to ensure a flexible workforce. It must be said however that substantial improvements
have been made in the housing sector over recent years concerning labor flexibility. As the
Dutch government grows more lenient with its policies towards the housing sector,
opportunities emerge for encouraging labor flexibility.

22
Threats
Looking at different articles, a first potential threat can be found in the fact that job rotation
does not necessarily mean an increase of creativity and innovation among employees. If there
is a job rotation scheme, employees are frequently rotated around different jobs in the
organization in order to increase their knowledge of all sorts of processes, as well as to ensure
a high level of motivation. De Spiegeleare did not find a study that suggests that there is a link
between job rotation schemes, the increase of the creativity or innovation among employees
who are involved in this rotation scheme. They further cite an article that researched job rotation
on the company level, “on the company level, Beugelsdijk (2008) studied the relation between
job rotation and innovation using a stratified sample of 988 firms of which the director or HR
manager were subjected to a face-to-face interview. He couldn’t find a significant relation
between job rotation and innovation” (De Spiegeleare 657). This could be a threat to the flexible
labor model NN wants to implement, as it is not desirable that employees do not develop their
skills and increase their creativity in the process. On the other hand, they cite only Beugelsdijk,
which is perhaps not very convincing in proving that no other authors have made this claim.
In another article by McGuiness and Wooden two relevant points are postulated. The
first is the potential mismatching of employees. It is of course possible that there is a mismatch
in the flexible labor model or that some employees are not as suitable for the companies as
thought of in the beginning, for example. In this case, the writers argue that there is a high quit
probability, which would be a waste of the resources for the NN Group, or for one of the other
companies involved in the model that invested in the development of this particular worker
(McGuiness and Wooden 12). The second point is related to the requirement of acquiring new
skills, which might be needed when moving from one company to another. When this is
required, there is a significant connection to higher job quitting (Ibid 13). For that reason, these
two point indicate that some aspects of the flexible labor market might be connected to workers
quitting their job, which would thus mean that the company has wasted valuable resources in
that particular worker. However, with respect to the upskilling, NN Group has transformed this
negative aspect into a positive by giving people specialized training so they can work in other
companies with the same set of skills.
A third article assesses an already existing flexible labor market model, namely the
Danish ‘Flexicurity’ model. An interesting aspect of this article is that it argues that flexible
labor market models are not transferable to other countries, “It is neither possible nor desirable
to transfer one model from one country to another, in short there are no ‘copypaste’ solutions”
(European Commission 12). This is a result of the fact that for each country the socio-economic

23
history should be addressed separately. This might form a threat to the desired model of the NN
Group, as it will have to adapt in order to make it suitable in other countries in which the NN
Group is operating. This will require a lot more research and time. In an article by Madsen, he
refers to the fact that “the Danish model of flexicurity is not resistant to economic crisis. To the
contrary, rather large fluctuations in employment can be expected” (Madsen 19). Especially in
the current economic situation, this can signify that the model will not be sufficient since it is
unstable and will not provide a beneficial tool in order to alleviate the crisis by making
employment more stable.
Additionally, Kleinknecht provides some interesting insights to the concept. They state
that “a permanently high rate of people joining and leaving a firm may diminish social cohesion
and trust and increase the probability of opportunistic behavior” (Kleinknecht et al 174), which
can form a threat to the companies investing in a flexible labor model as it can create a gap, for
example, in teamwork, that in the end might lower the motivation of the employees and lead to
inefficiencies. In order to decrease this risk, companies are required to invest more time and
money in controlling and monitoring its employees. A second important point mentioned in
their article is that “flexible and short-run labor relations may also favor the leaking of trade
secrets and of technological knowledge, which may discourage investments in R&D and
innovation. In other words, the loss of social capital will aggravate the problem of market failure
due to positive externalities” (Ibid 174). This aspect of creating a greater risk of market failure
can be seen as an enormous threat, since that is what every company wants to avoid.
Nevertheless, in today´s world in which communication and media is so advanced, it is difficult
to keep confidential information secret. For this reason, Jordy Veth stated that sharing and
exchanging information between companies is a lot more beneficial. This indicates that they
have incorporated this while developing their flexible labor model.
While the previous articles were looking at the side of the employer with regard to the
challenges of the flexible labor market, the flexibility in employment also brings along some
implications for employees. As discussed in the peer review on the concept ‘Flexicurity’, a
main threat towards the employees is that they face the risk of being dismissed from their work
more easily - “There is low protection for employees, which means that it is easy for employers
to dismiss workers” (Mutual Learning Programme 1), which means that there are an
increasingly work instability. Besides, Bentolila´s article presents the case of Spain to
exemplify how employees within the flexible labor market have lower wages than those
employees with a fixed contract. However, a person with a fixed contract is subject to more
rigidity in skills than a flexible worker who comes with a range of skills due to flexibility in the

24
way of thinking and an higher adaptability towards the working environment. Furthermore, this
last article mentions how flexible labor employees tend to have a weaker position in their jobs.
As flexible employees have less attachment to the companies, they are underestimated in the
decision making of the company, especially in setting wages. Although, this threat varies per
country, it seems true that flexible employees are less able to create workers union (Bentolila
16, 17-20).
One should note however, that the flexible labor model as desired by the NN Group has
a payroll system with a fixed wage. This could be a counter argument of what Bentolila
mentions because there seem to be ways to work with a fixed wage rate as well. Additionally,
the researcher warns that flexible labor has been understood as a positive model for employees;
however such benefits cannot be appreciated immediately. It takes time until the flexible labor
market reach stable ground to allow workers to achieve a positive outcome. In fact, Bentolila
mentions that this can be exemplified in Spain, where the flexible labor market was introduced
in the 1980s and raised the unemployment 6% between 1991 and 1993 (Ibid 30). Also, Bentolila
points out that the flexible model is not just a challenge for the employees, but also for the
company because "increasing the flexibility of permanent employees is usually politically
difficult" (Ibid 31). The researcher remarks how the flexible model is threatened by the different
levels of adaptability and possible reactions in each country, even within the same region.
Feldmann follows the pattern of Bentolila and highlights the remarkable challenges of
applying the flexible labor market in different countries. In his article, Feldmann analyzes the
cases of Poland, Hungary and the Czech Republic because of their position as being new
countries in the European Union. Feldmann highlights that the flexible model mostly deals with
the politics of host countries, especially those with a Communist background (Feldmann 273).
In order to apply a flexible labor model in different countries, a company needs to realize that
the participation of local governments and policies may represent a threat to its goals. For
instance, the case study of East European countries display differences in education, the number
of educated employees, taxation, labor participation, working-time and dismissal regulations,
retirement systems, job-placement services, minimum wages and differences between genders
(Feldmann 274-307) These are just some of the issues that NN Group might deal if they decide
to extend the flexible labor model to new borders. Moreover, the government in host countries,
as Feldmann suggest in the case of Eastern Europe, may not cooperate with the flexible model
requirements.

25
Conclusion
Using the SWOT-analysis structure proved to be very helpful in classifying the different
implications of the flexible labor model. At first, some significant strengths of the flexible labor
model have been identified. For instance in Denmark, there is a high percentage of youth
employment due to its flexible labor market. Besides, a flexible labor market can also increases
creativity, productivity and innovation. However, other scholars draw different conclusions.
Some authors, for example, have argued that rotation job schemes, which is central aspect of a
flexible labor market, decreases innovation and creativity. Next to this example of a weakness,
there is a threat that the flexible labor model will result in the mismatching of employees,
diminished cohesion and social trust, and the need for adaptations because of the social
economic history of a certain country. Additionally, the implementation of a flexible labor
model will probably lead to the other threat of highlighting socio-economic differences between
Western and Eastern Europe. Moreover, workers will be subject to transitions between
employment and unemployment. Also, the lack of a bargaining culture and high trust-relations
in most states, could pose a threat to the implementation of the model. Yet, Spain proved to be
an example for opportunities to the flexible labor model. In this country, high unemployment
among a highly educated workforce can provide opportunities for the successful
implementation of this model. Although some sources have the tendency to contradict each
other - thus making us to find new or adjusted conclusions -, the numerous useful sources which
have helped to identify certain strengths, weaknesses, opportunities and threats of the
implementation of a flexible labor model.

26
Theoretical Framework
NN Group is currently surveying the possibilities to restructure its labor force in order to keep
up with the shifting pressures in the labor market. It proposes a flexible labor model in which
companies from different branches work together to educate graduates, and after a few years
place them into a pool of preferred freelancers with guaranteed commissions. This model
ensures that both employers and employees enjoy a maximum of freedom of action with the
companies’ investments and the workers’ social security at an acceptable level of safety. As the
literature review has identified certain mechanisms that are at the basis of defining an
efficacious application of a flexible labor model, a theoretical framework can as such be
formulated which will highlight the factors that would determine the successful implementation
of NN’s flexible labor model in a given country.
Active policies at the government level with regards to both labor issues as social
security are required for a proper execution of NN’s flexible labor model. After all, there are
certain problems along with the implementation of a flexible labor model, like job insecurity,
that could hinder employers to move to this model (Green and Leaves 121, 137). However,
flexibility can be obtained without detrimental effects on workers’ satisfaction when a situation
beneficial for both the employer and the employee is provided when the country in question
facilitates the worker by providing job stability (Burroni and Keune 86). For instance, active
labor market policies that assist workers in their transition from one job to another (Origo and
Pagani 554). Furthermore, the literature review has thoroughly made clear that you can’t have
flexibility without a decent social security system. After all, financial insecurity is next to job
insecurity the main obstacle for employees to move towards a flexible model of employment
(Green and Leeves 137).
For instance Denmark, the most evident case of a successful flexible labor
implementation, shows that the Danish flexible labor model has only proved successful as it
meets the employee’s increasing demand for social security due to the increasing demand for
more flexibility (Wilthagen 1). Also, the case of Denmark underpins the necessity for active
labor policies. Denmark has shown that active labor policies result in a high percentage of the
youth included in the labor market, despite the fact that there is a relatively low level of
employment protection legislation (Madsen 17). Moreover, well-conceived active labor market
policies can decrease labor market segmentation, and have even resulted, during the present
economic crisis, in minor effects on the rise of long-term unemployment among all
demographic groups (Madsen 17). Again, these examples stress the significance of considering

27
workers’ security when trying to achieve a more flexible labor model (Burroni and Keune 87).
Therefore, Burroni and Keune argue that strengthening the connection between flexibility and
security will be of significance when trying to achieve a flexible labor model (Buronni and
Keune 87). Sultana acknowledges that security of workers is equally significant as trying to
create a more flexible labor model (145), and similarly, Wilthagen and Tros emphasize the need
for a flexible labor model without undermining the importance of workers’ security (166). As
such, it is expected that there is a positive relation in a given country between a high degree of
both active labor policies as the social security system and the successful implementation of
NN’s flexible labor model.
The case of Japan, a country where NN Group is also active, shows that although the
migrant workforce is often limited to temporary jobs, employers have since the economic
recession of the late 1990's begun to hire workers of foreign background as long-term
employees. An opportunity for improving the flexibility of labor in Japan lies in improving the
education standard of the migrant part of the population. Indeed, with better general knowledge
of the Japanese language and culture there would be much room for improved socio-economic
integration of the migrant population, thus shaping more room for the implementation of a
flexible labor model (Takenoshita). Likewise, the flexible labor market in Denmark could never
have succeed as it does now without having the government strongly focusing on high quality
education, thereby enhancing flexibility and security in the labor market (Wilthagen 1, 10).
Therefore, it is expected that there is a positive relation in a given country between a high degree
of active policies at the government level with regards to the quality of high education and a
proper execution of NN’s flexible labor model.
Furthermore, active policies with regards to high quality education foster the rise of a
high degree of human capital, another precondition for a successful implementation of NN’s
model. Denmark and The Netherlands already have sustainably implemented flexicurity by
allocating sufficient economic and political resources such as highly trained human capital
(Conter 10). More practically, it is NN Group’s vision to create and educate a pool of talented
graduates in the countries where it is active. A high degree of human capital in the countries in
question will only benefit the implementation of this vision, a statement underpinned by
Bentolila et. al (30-31). The statement of Sánchez only reinforce this necessity of human capital;
he argues that the greater the firm’s functional flexibility, and internal numerical flexibility, the
greater the firm’s innovativeness (Sànchez 719). Functional flexibility means a process through
which firms adjust to changes in the demand for their output by an internal reorganization of
workplaces based on multi-skilling, multi-tasking, teamwork, and the involvement of

28
employees in job design and the organization of work. Internal numerical flexibility refers to
the ability to change the size of the company's internal labor force. While numerical flexibility
relies entirely on the ability of letting go part of the firm's core labor force, functional flexibility
is concerned with the free movement of labor within a firm. Useful methods to enhance
functional flexibility include re-allocating tasks among employees and retraining of the labor
force. A higher degree of human capital will as such be more adjustable to changes in the
demand for their output than a country with a less-trained labor force. Therefore, it is expected
that there is a positive relationship in a given country between a high degree of human capital
and a successful implementation of NN’s flexible labor model.
According to Klau and Mittelstadt, another requirement for a successful implementation
of NN’s flexible labor model is a high degree of real labor cost flexibility and adaptability (i.e.,
high wage flexibility and adaptability) at the national economy-wide level (10, 12). For
example, wage flexibility can be an important addition to a suggested payroll system, which
could be part of NN’s flexible labor model, in turn thus helping firms to improve their view on
this model (De Spiegelaere 656). Furthermore, a high degree of flexibility with regards to
employment contracts is a factor that determine the successful implementation of the flexible
labor model as proposed by NN Group. Flexibility which the employees face in their contracts
means that on the macro-level the previous rigidity of employment contracts and the firing and
hiring regulations are more relaxed (De Spiegelaere et al 656). This can be of certain advantage
for firms in need of restructuring their organization, like NN Group, in order to avoid bigger
losses or even bankruptcy. Therefore, it is expected that there is a positive relation in a given
country between a high degree of real labor cost flexibility and adaptability at the national
economy-wide level and a successful implementation of NN’s flexible labor model on the other
hand.
Also, flexibility can be obtained without detrimental effects on workers’ satisfaction if
policies aim at favouring the use of flexible contracts (Origo and Pagani 554). For instance,
Germany’s ‘Agenda 2010’ entailed the reform of the German labor market to make it more
flexible. It became easier for employers to fire and hire employees (“A quick guide to Agenda
2010” 1). This low degree of rigidity with regards to employment contracts is often accredited
with Germany’s success in withstanding the recession and its economic incline in the last
decade (Barkin 1). Therefore, it is expected that there is a positive relationship in a given
country between as a low degree of rigidity of employment contracts and a successful
implementation of NN’s flexible labor model on the other hand.
Besides, the government has to have the willingness to develop a flexible labor market,

29
and at the same, has to limit its intervention in the market to the greatest extent possible in order
to establish a fruitful operation of NN’s model. The government in host countries, as Feldmann
suggest in particular with regards to the case of Eastern Europe, may not cooperate with the
flexible model requirements (Feldmann 273). In order to apply a flexible labor model in
different countries, a company needs therefore to realize that the participation of local
governments are necessary for a successful implementation of a flexible labor model (Feldmann
274-307). Therefore, it is expected that there is a positive relationship in a given country
between a high degree of government’s willingness to establish a flexible labor model and a
successful implementation of NN’s flexible labor model.
Moreover, the case study of the Dutch housing market demonstrates how labor can be
made rigid via government intervention. Minimal government intervention in a particular sector
is thus necessary to ensure a flexible workforce (Hoj). Therefore, it is expected that there is a
positive relationship in a given country between a low degree of government’s intervention in
the market and a successful implementation of NN’s flexible labor model. Furthermore, also
companies themselves should be willing to develop a flexible labor system, while
correspondingly high trust-relations between companies should be established. For instance,
French and British trade unions argue that the absence of high trust-relations between
companies make it impossible to implement the flexible labor model in most European Union
member states (ETUC 9). Therefore, it is expected that there is a positive relationship in a given
country between a high degree of trust-relations between companies and a successful
implementation of NN’s flexible labor model.
In addition, Chung states that at a country level, there is a positive relationship between
the provision of flexibility arrangements for the needs of workers and those for the needs of
companies. Furthermore, providing flexibility for workers’ needs and flexibility for companies’
needs are not necessarily at odds with each other. In fact, Chung states that the two may be able
to help one another develop and can be reconciled to have more of a synergy effect towards
each other, which would then provide real flexicurity for both workers and companies. So if
both a country’s workforce as corporate climate is generally more open towards the idea of
flexible labor, if provides great opportunities to implement a flexible labor model there.
Therefore, it is expected that there is a positive relationship in a given country between a high
degree of companies’ willingness to establish a flexible labor model and a successful
Finally, high participation of workers in the company’s decision-making progress is a
factor that is of importance when considering an effective employment of NN’s model. As

30
flexible employees have less attachment to the companies, they are underestimated in the
decision making of the company, especially in setting wages. Although, this threat varies per
country, it seems true that this matter is of importance and flexible employees are, for instance,
less able to create workers union (Bentolila 16, 17-20). These barriers could hinder the decision
of employees to be flexible in their employment. In addition, Bentolila warns that flexible labor
has been understood as a positive model for employees; however such benefits cannot be
appreciated immediately. It takes time until the flexible labor market reach stable ground to
allow workers to achieve a positive outcome. Therefore, through an increased participation of
the workers in the decision-making process, employees are able to positively regard ánd be of
use to the organizations' increasing flexibility in the long run (Kalleberg 481). As such, it is
expected that there is a positive relationship in a given country between a high degree of
workers’ participation in the company’s decision-making process and a successful
Diagram of Theoretical Framework
The diagram of the theoretical framework hereunder is made in line of the model used for a
PESTLE-analysis. As environmental and technological factors have not been found of
importance to determine the successful implementation of NN’s flexible labor model, the
independent factors that do have been found of relevance are clustered under the group of
political, economic, socio-cultural and legal factors. Furthermore, these groups have been
clustered under more specific mechanisms that define a successful implementation of a flexible
labor model. Finally, these independent mechanisms have been in turn clustered under three
key in this theoretical framework identified fundamentals of a successful implementation of a
flexible labor model – security, flexibility, and cooperation.

31
The successful
implementation of NN's
flexible labor model in a
given country
Flexibility High job-to-job mobility
Political
High degree of active labor
policies
Low degree of government
intervention in the market
Economic
High degree of human
capital at the national
economy-wide level
Legal
Low degree of rigidity of
employment contracts
Security
Financial Security Economic
High degree of social
security system
Job security Political
High degree of active labor
policies
High degree of policies
that foster high quality
education
Cooperation
Trust
Economic
High degree of labor cost
flexibility and adaptability
at the national economy-
wide level
Socio-cultural
High degree of worker's
participation in the
company's decision-
making process
High degree of trust-
relations between
companies
Willingness
Political
High degree of willingness
of government to develop
a flexible labor market
Socio-cultural
High degree of willingnes
of companies to develop a
flexible labor system

32
Conceptualization
In this paper, an answer will be given to research question whether the flexible labor model as
proposed by NN Group can be implemented in the countries where NN Group is active. This
flexible labor model is a model in which companies from different branches work together to
educate graduates, and after a few years place them into a pool of preferred freelancers with
guaranteed commissions. This model ensures that both employers and employees enjoy a
maximum of freedom of action with the companies’ investments and the workers’ social
security at an acceptable level of safety.
The dependent variable in this research is the successful implementation of NN’s
flexible labor model, whereas the independent variables are the factors that determine this
successful implementation in a given country. These eleven independent variables are to be
found in the theoretical framework and, subsequently, the case study protocol.
Operationalization
The dependent variable in this research – the successful implementation of NN’s flexible labor
model in a given country – is being determined by the list of independent variables as found in
the theoretical framework and, subsequently, the case study protocol. This protocol can be
found in appendix 1. Therefore, in order to answer the research question, this paper will conduct
a descriptive research through performing multiple case-studies. More specifically, the cases
which are being examined are the countries where NN Group is active. By investigating
whether the independent variables are present in the countries where NN Group is active, the
research question can be answered.
The analysis in this paper largely refers to academic literature that is mainly occupied
with the implementation of flexible labor models and the associated consequences. Therefore,
the academic literature is particularly valuable when assessing the degree of social security
system; degree of policies that foster high quality education; degree of worker's participation in
the company's decision-making process; degree of trust-relations between companies; and
degree of willingness of companies to develop a flexible labor system. Also, official
government reports are being thoroughly examined, works that are especially useful in
determining the degree of active labor policies; degree of rigidity of employment contracts;
degree of labor cost flexibility and adaptability at the national economy-wide level; and
willingness of government to develop a flexible labor market. Next to content analysis, the case-
study research will also partly be based on statistical research. Statistical information is

33
especially fruitful when identifying the degree of human capital at the national economy-wide
level and the degree of government intervention in the market.
Yet, due to the fact that there is a lack of extensive information with regards to NN’s
flexible labor model, it is hard to define sufficient and necessary independent variables that
determine the success of the implementation of this model. For instance, it is argued that in
theory a high degree of social security in a given country is necessary to make a flexible labor
model to a success in a given country. However, when it is clear that NN’s flexible labor model
proposes its own social security system exclusively for those employees of the cooperating
companies, it can be argued that the independent variable of social security in a given country
is not relevant at all. Because it’s thus difficult to value the worth of the presence of the
independent variables in general, the conclusions deprived from the research will come to
recommendations and suggestions not solely on basis of absence or presence of the independent
variables discussed in the theoretical framework. The conclusions per case study will be
formulated on the context of the country, when keeping in mind the independent variables that
have been identified in the theoretical framework, and those independent variables that will be
identified when conducting research. After all, every implementation of a flexible labor model
should be altered according to the country’s context (Madsen 17). It is therefore argued that
NN’s proposed flexible labor model should be contextualized relating to the particular
circumstance of the country in question (Sultana 145).
Additionally, finding consistency in measuring the relevant independent variables for
all countries in question is problematic. Although the research committed itself to search in the
same category for identifying the variables, this paper has nonetheless put effort in doing justice
to the various analysed countries and the related differences in culture and society. As a result,
there exists difference among the investigated countries where NN Group is active with regards
to the operationalization of the independent variables. Furthermore, certain variables – in
particular socio-cultural variables – are not able to be measured statistically, and this project in
general is not a statistical research. This paper thus makes use of qualitative above quantitative
research methods, thereby keeping mind the diversity in culture and society of the research
objects. Therefore, this also contributes to the differences in the operationalization of the
independent variables among the various investigated countries.

34
Research Findings

35
Research Findings
Only those countries which have been positively judged in accordance with the research
question will be covered in this project; the research on the other countries will be enclosed in
the appendices.
Belgium
Political
Degree of active labor policies
The Belgian welfare system is a safety net which covers people who do not enjoy a social
insurance (these persons are usually not covered because of insufficient work experience, delay
in insurance payments and so on). If they pass a means test, these individuals can boost their
income up to the determined level of the Minimum Income Guarantee (MIG) at their local
welfare agency. (Cockx 9) In Belgium, workers remain entitled to unemployment insurance
benefits for an indefinite duration. Furthermore, after a waiting for a period of six months,
school-leavers are entitled to unemployment insurance benefits. (Cockx 10) Legislation
stipulates that Welfare Agencies (WA) may employ welfare recipients for them to be entitled to
social insurance benefits. This is commonly referred to as social employment.
Degree of policies that foster high quality education
Belgian education policies are organized at the (linguistic) community level. Higher education
policies have been reformed according to the Bologna process. The reforms consisted of greater
integration and a common organization in three cycles : bachelor (180 ECTS), master (60 – 120
ECTS) and doctorate. (European Network 19) Nearly all universities and colleges, which the
two main sorts of higher education institutions in Belgium, are publically funded. In Flanders
funding is given according to teaching results and research output, while in Wallonia funding
is directly dependant on the amount of students attending in order to encourage high
participation. The underlying principle to higher education in Belgium is that of open access :

36
any student with appropriate degree can go to any university and register in any BA degree.
Since 1996 a national quota was set on the number of students allowed to enroll in medical
specialities.
Degree of willingness of government to develop a flexible labor market
There are great incentives from the Belgian government to flexibilise the Belgian market : by
ensuring that social benefits for being unemployed, the Belgian government intends to
encourage people to move more freely between jobs. (Klau 13) A high level of cooperation
between the government and employers in putting together social security schemes is also
observable. This is due to the fact that both the government and employers realise and work
together towards achieving a flexible labour market. (Klau 34)
Degree of government intervention in the market
Protective labour laws and trade union action are results of direct government intervention and
have had a considerable impact on the Belgian labour market and has determined the
development of the labour relations system. The Belgian economic system is a market economy
with active government intervention in its cyclical and structural evolution. (Blanpain 36)
Autonomy of the social partners, the employers' associations and the trade unions, especially
when engaged in the negotiation of wage agreements, has always been one of the main aspects
of the Belgian labour relations system.
Economic
Degree of social security system
The Belgian social security system is very extensive. People without the Belgian nationality
also are entitled to certain allowances and to social services, although these are strictly
dependent on the conditions under which they are residing on Belgian soil. The Belgian social
security system is financed by social contributions on income of employees. (European
Commission 6) An employer in Belgium pays every between 30 and 40% more for each of
his/her employees into the social security fund. The self-employed can also request social
security, they then also pay a share of their income into the social security fund. (European

37
Commission 8)
Degree of real labor cost flexibility and adaptability at the national economy-wide level
The level of real labour cost flexibility may be affected by institutions present in the labour
markets such as trade unions. In Belgium, despite being divided in different political factions,
trade unions are very strong as more than half of the total labour force is actually unionised.
(OECD n.p.) Another factor which can be seen as very representative of real labour cost
flexibility is that of the real wage rigidity level. As can be observed, real wage rigidity levels
vary in Belgium depending on the type of employment. In the case of jobs requiring higher skill,
one can observe a strong rigidity level, mainly due to the fact that these employees are hard to
replace. (Du Caju 4) On the other hand in the case of temporary or precarious jobs, one can
observe a much lower real wage rigidity level. The wage level in Belgium is especially
representative of real labour cost flexibility because due to the high amount of benefits received
by a worker upon losing employment, changing the wage level is often a good alternate method
of altering labour costs. (Du Caju 33)
Degree of human capital at the national economy-wide level
Belgium ranks eighth among OECD countries for levels of investment in all levels of education,
spending USD 11 028 per student per year compared with the OECD average of USD 9 308.
While the share of private expenditure on all levels of education is at an average level of 16%
for OECD countries, it is at a mere 5% for Belgium. (OECD 1) Tertiary education is especially
affordable when put in relation with the OECD countries average: 10% of private spending for
Belgium while the OECD average is at 32%. The percentage of the Belgian population attaining
tertiary education (35% for 25-64 years olds in 2011) is slightly higher than the OECD average
(31%). It is observable that among the younger part of the population more and more people
are achieving tertiary education (43% for 25-34 year olds). (OECD 1) This means that not only
does Belgium have a substantial amount of human capital, but that amount is increasing. It has
been theorised that part of the reason for this growth in human capital can be attributed to the
economic crisis which pushed more and more young people to continue their education rather
than enter an unstable labour market. (De La Croix 35)

38
Socio-cultural
Degree of participation of workers in the company’s decision-making process
Belgian trade unions are divided in competing confederations with deep political roots. The
largest two are the CSC/ACV (Christian movement) and the FGTB/ABVV (Socialist movement)
with a smaller third movement the CGSLB/ACLVB (Liberal). Despite the divide, unions in
Belgium are able to co-operate and more than half of the total workforce is unionised (3.5
million members to this day and growing). (Fulton n.p.) Although employment law is still
decided on a national level the division between the French-speaking and the Dutch-speaking
communities has an impact on relations between unions. Trade union membership has went up
by 13% between 2001-2010 while the overall proportion of trade unionists remained stable. In
addition to employment benefit and legal services to members the unions in many Belgian
industries are also able to offer members an annual financial bonus paid by the employers.
Belgian trade unions, due to their sheer size, have considerable impact in their companies'
decision-making process including in setting the wage level. (Klau 11)
Degree of trust-relations between companies
Research conducted in many European countries show that two main cultural styles exist when
evaluating trust in industrial relations. Northern countries such as Denmark and Holland follow
the 'Northern model' which consists of low power distance between management and workers
and high trust between them. (Elgoibar & Lourdes 260) Other countries, like Spain and Portugal
follow the 'Mediterranean model' (Hyman n.p.) with high power distance between management
and workers and low trust between them. However in the case of Belgium, due to a variety of
opinions having been found, a clear trend can not be deducted. Trust relations thus basically
depend on the sector and/or organization in question. It is interesting to point out however that
several Belgian unionists have declared upon being interviewed that having trustful relations
with the management is possible as long as it is understood that trade unionists are there to
defend the worker's interst and only that. (Elgoibar & Lourdes 264)

39
Degree of willingness of companies to develop a flexible labor system
A number of main companies are quite willing to make Belgian labour more flexible, and one
way to achieve this is by making use of Belgium's elderly. Delta Lloyd, a prominent insurance
company, came up with a part-time retirement system and a revision of the tax scheme.
Companies are on the eager to exploit opportunities which would make Belgian labour more
flexible. (Contreras n.p.) This is because the tax and pension systems in Belgium do not give
workers much incentive to work. Quite the opposite, many workers actually prefer to retire
before the legal retirement age (65 years old). Although there have been some incentives made
by employing companies in order to encourage workers to stay until retirement age, there is
still much room to make Belgian labour more flexible. (Contreras n.p.)
Legal
Degree of rigidity of employment contracts
Belgium is characterised by strong real wage rigidity and very low nominal wage rigidity,
consistent with the Belgian wage formation system. Except for low earnings close to the
minimum wage, nominal rigidity is essentially absent in Belgium. Several factors concerning
employment and wage rigidity in Belgium are apparent. First, there is higher real wage rigidity
for white-collar workers: as they are more difficult to replace and monitor firms are less inclined
to cut their wages. Secondly, rigidity decreases with age. (Du Caju 5) Thirdly, very low earnings
tend to have a low degree of real rigidity mostly due to the precarity of these jobs. Fourth,
downward real wage rigidity is more prevalent in small firms than in large ones. (Du Caju 6)
Fifth, Belgian firms with low quit rates are characterised by stronger real rigidity. Finally, the
degree of rigidity varies depending on firms' economic conditions.

40
Czech Republic
Political
Degree of active labor policies
Especially by the end of the 20th
century spending on active labor market policies (ALMPs)
was quite high and these policies were very successful. The main activities by which these
policies were carried out are the following: subsided employment, public works, youth training
programs, sheltered workshops and training programs (Vecernik 54). Nevertheless, “either
because of permanently low unemployment or a lack of energy on the part of labor market
offices”, spending and participation in active labor market policies decreased (ibid 54). And,
according to the OECD, from all its members, spending on active labor market policies has
been one of the lowest in the Czech Republic in the period prior to the economic crisis, and
decreased even further during the crisis (OECD 92). But, with the introduction of the new
government in 2013, increased spending on ALMPs became part of the political agenda. So,
even though spending on ALMPs had been very low, the government of the Czech Republic is
currently aiming to make this of higher importance
Degree of policies that foster high quality education
The government of the Czech Republic seems quite involved with the provision of high quality
education. The Czech Republic has an education policy that is concerned with the preparation
of students for the future, by high enrolment and attainment in vocational and tertiary education,
so that the needs of students and the labor market can be met. The 3 main policies contributing
to this are:
1. “The strategy of lifelong learning in the Czech Republic (2007), which aims to improve the
match between skills and the labor market” (OECD 8).
2. A new education policy that focusses on the increased accessibility and higher quality of
education, named the new Strategy for Education Policy of the Czech Republic until 2020”
(European Commission n.p.)
3.“The Strategic Plan for the Scholarly, Scientific, Research, Development, Innovation, Artistic
and other Creative Activities of Higher Education Institutions for 2011-15” (OECD 8). The

Final Project - InterNexus - NN Group

Final Project - InterNexus - NN Group

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (8)

Final Project - InterNexus - NN Group