The issue is not on-boarding costs. It's statutory requirements or political issues that prevent companies from doing layoffs to respond to changing economic conditions. Layoffs are not impossible in countries like France but they are very hard to do and very expensive. France has a dearth of innovative small companies for this reason because you can't hire aggressively to try to get risky ideas to market.

The effect is that by protecting existing jobs you lose out on future ones. Over time this pretty much cuts you out of any industry where there are waves of creative destruction.