Those social protections are part of the problem, or rather, the way some countries implement them. In some EU countries, government has pushed the cost and risk of social measus to employers. An employee falls ill or is injured? Company is obliged to pay for their wages, sometimes for over a year. Need to fire someone? You can't, or you spend a goodly sum getting rid of him/her. Or you have someone off on maternity leave, with the obligation to keep paying her wages, just a few weeks after she joined the company. Yes, it happens, and by law you cannot refuse someone on that ground or even ask about it in a job interview.
That's all fine and dandy for the worker, and for corporations who can easily absorb the average costs incurred in a large group of employees. But in small startups, having to pay a worker who is unproductive one way or another for a long period of time can kill the company. You can insure against that, but the premiums are unbelievable.