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Featured, Columns, January/February 2025, Sustainability |
April 2025

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Note from Column Editor Tracey J. Niemotko: Jack Hakula graduated from Marist College in May 2023 with an accounting degree and is pursuing a graduate degree in accounting, auditing, and control at Erasmus University in Rotterdam, Netherlands. Jack worked briefly at PwC and now serves on the student council for Erasmus University. Also a student member of the PwC Honours Master Class in Rotterdam. Jack’s interest in the culture of the Netherlands as a Dutch American has led him to take note of how quality of life concerns and priorities vary in different cultures. As an American living and working in the Netherlands, Jack shares his observations on how human capital sustainability policies in the Netherlands compare to the United States.

When discussing the evolving character of modern America at work, one would be hard-pressed to find a corporate employee unfamiliar with the rising importance of sustainability. The classic hot topics of sustainability are climate-related, focusing on corporate approaches to a reduced carbon footprint and increased investment in environmentally friendly energy sources. A less frequently broached topic, though unusually applicable to the American workforce, is human capital. Initiatives regarding increased protections and benefits for employees are mostly a recent development in the United States, which has only exposed the great differences compared to other developed countries. This article will further highlight these differences from a student’s perspective, specifically focusing on employment benefits and protections in the United States and the Netherlands.

The promotion of human capital policies or employee protections may not take center stage in an American boardroom. The traditional American approach to human capital management has prioritized the flexibility and autonomy of employers, with little to no attention given to employees. In a truly fair and competitive workplace, the employees’ experience and the company’s needs would be in balance.

Corporations work to ensure external innovation and growth and should similarly facilitate the improvement of human capital. While U.S. technology development has set the pace globally, the development of American workers’ skill sets has not followed suit. In short, while the concept of work has changed significantly, the U.S. workforce has been left without similar development to remain truly competitive in the modern work environment.

The Netherlands may be considered a model for the human capital balancing act. An ambitious nation with renowned, long-standing companies as well as start-ups, the Netherlands has provided high working standards and protections for its workers while continuing to drive growth in its corporate sector. The Exhibit highlights key differences between the employee experience in the United States and the Netherlands.

EXHIBIT

The United States vs. The Netherlands: Different Approaches to Human Capital Sustainability

Policy; United States; The Netherlands Work-Life Balance; Widely variable across and within industries: there is little in the way of legal restrictions on working hours. At a minimum, a typical corporate role will require 40 hours per week, with substantial increases based on industry and position. There are limited part-time (<40 hours) opportunities.; Similar variation, but to a lesser degree: There are extensive labor protections, which address maximum working hours. The average work week is between 35-37 hours for full-time positions. Part-time work is very common, particularly among working parents with small children. Paid Vacation & Sick Leave; There are no federal regulations requiring paid vacation, sick, or maternity leave. The 1993 Family and Medical Leave Act only covers qualified workers. Typically U.S. paid leave is two weeks; policies regarding paid, sick, and maternity leave vary greatly. A trend towards employee protection can be seen at the state level. New York State Paid Family Leave provides eligible employees with up to 12 weeks of job-protected, paid time off to care for a new child, a family member with a serious health condition, or a loved one in military service.; The Netherlands has federal regulations requiring all employers to provide four weeks of paid vacation leave.; Employees are entitled to two years of sick leave for debilitating illnesses, during which they receive partial salary.; Companies must offer at least 16 weeks of paid maternity leave and 6 weeks of paid paternity leave. Most Dutch corporations offer more extensive leave policies above and beyond these requirements. Continuous Training and Development; “Upskilling” receives little support from government programs. Though highly valued in American work culture, continuous training and development are mostly regarded as the employee's responsibility.; The Netherlands runs many “upskilling” programs, which include grants for continuing education expenses, partnerships with private companies, and government-funded courses on technical skills (i.e., data analysis and cybersecurity). Employment Security; The majority of the workforce participates in “at-will” employment, which offers little job security for employees but a great deal of flexibility for employers. There is no required severance pay or notice for dismissed employees.; Employees are contracted for work permanently or for a fixed term. Employers are required to provide sufficient justifications for termination.; All dismissed employees must be given a paid notice period and severance payment.

Human Capital Sustainability

Part-time work.

Although the United States and the Netherlands have similar motivations and ethical beliefs, a key difference regarding work-life balance approaches is the normalization of part-time work. While part-time work is common, and often encouraged, in the Netherlands, this is perhaps not the case in the American workplace. In the United States, working a 40-hour week is often required to be eligible for employee benefits. A concern is that this approach often alienates a large section of the population, particularly working parents with young families, for whom flexibility is valuable. Expanding part-time work opportunities could be especially impactful for sectors with staffing shortages like the accounting profession. Normalizing part-time working arrangements may add productivity in the long term and eliminate the pressures associated with the stereotypical 40+ hour work week.

Job security adds to quality of life.

The average U.S. corporate employee will work their entire career in “at-will” employment. As the name implies, this allows the employee or employer to terminate employment at any given time, with very little restriction on qualifications for a reasonable basis. Because the employer has the discretion to dismiss workers at-will, even the most productive employee may be left with little job security. Lack of job security in the workplace is not a successful incentive in the long-term, and may even foster resentment for a company.

In contrast, employees in the Netherlands are contracted to work. They are initially hired on fixed-term contracts and later receive permanent agreements; dismissing an employee before the lapse of their contract must be supported by a reasonable basis claim. While promoting systems that make firing employees more difficult may seem counterproductive to American corporations, the Dutch workforce has found this practice incentivizes companies to be more discerning when hiring their employees and increases retention rates. Given that public accounting firms struggle to attract and retain employees, a fixed term to permanent contract system may give employees a sense of security and incentive to prioritize their work.

Is it cultural?

Perhaps the differences highlighted in the Exhibit indicate a cultural separation between Dutch and American human capital management policies and philosophies. The Dutch regulations regarding paid leave and public investment in workforce training and development are based on a fundamental belief that governmental intervention is beneficial. On the other hand, government involvement in business typically strikes fear in the hearts of American management.

Thus, there may be a hesitancy to allow government involvement, or perhaps American management has not viewed its labor force as requiring training or protections. It seems that the approach to human resource management in the United States has prioritized the comfort of the employer. But to be sustainable, businesses must address workers’ needs; therefore, a shift is needed to acknowledge and embrace the exogenous argument that human capital management reflects our view of working culture. Businesses must realize that the sustainability awareness that exists today requires addressing quality of life concerns for employees, because not doing so will reflect on how they are viewed by stakeholders.

The broader, long-term view.

The main focus of sustainability accounting and reporting is generating long-term value; investing in and developing human capital is an important component of long-term business growth. Although investing in employee training and development may be costly, it can help entities meet future needs. Moreover, corporate partnerships and collaborations with the federal government may be a means to upskill on a wider basis. Hopefully, sustainability goals will make human capital more of a priority—like environmental concerns—to bring a better quality of life to U.S. workers.

Jack Hakula is currently pursuing a graduate degree at Erasmus University, Rotterdam. He would like to thank his former professor Tracey Niemotko for her help in preparing this article.

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