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Could small Danish companies become more likely to hire foreign staff?

Small- and medium-sized enterprises account for 99 percent of Danish companies, but are far less likely than large companies to hire foreign staff. However, that may be changing.

Small- and medium-sized Danish companies are far less likely than large companies to hire foreign staff, but that may be changing.
Small- and medium-sized Danish companies are far less likely than large companies to hire foreign staff, but that may be changing. Photo by Tyler Franta on Unsplash

When Aleksandra Kwitek first applied for a job at the small Danish company Hevea, she wasn’t hired for the role. However, the company’s mission to produce baby products made of natural rubber caught her interest. 

After several months of job searching, Kwitek, who is originally from Poland, decided to reach out to Hevea with an alternative suggestion: Would they be interested in hiring her as an intern? 

The company said yes, and she began working for them last year. Within a month, they offered her a full-time position. Today, she is the first, and only, non-Danish employee at the company’s headquarters in Dragør near Copenhagen.

Kwitek represents a growing trend among Denmark’s small- and medium-sized enterprises (SMEs) to hire global talent in the face of an increasingly tight labour market. 

Denmark’s unemployment rate, 2.8 percent, is the lowest the country has seen since 2008.

“International labour is probably much more important for bigger companies, but it’s becoming more important for SMEs now because of the labour shortage Denmark is experiencing,” said Bjarke Roed-Frederiksen, chief consultant at SMVdanmark, which represents 18,000 Danish SMEs.

READ ALSO: Are international workers the answer to Denmark’s labour shortage?

SMEs, which account for more than 90 percent of all Danish companies, are experiencing a disproportionately high number of job vacancies. And, since more than 90 percent of Denmark’s high-growth companies are SMEs, when SMEs struggle to grow, Denmark’s overall economic growth also slows.

According to a new survey from Denmark’s largest employers’ association the Confederation of Danish Industry (Dansk Industri, DI), four out of 10 companies see labour shortages as the biggest growth challenge of 2022, and 60 percent expect it to slow down growth in the coming year.

“Looking for labour outside of Denmark is a natural response to that,” Roed-Frederiksen said. “More of our members are starting to think about whether international employees will be the solution to their challenges.”

Why haven’t more SMEs hired internationally? 

Despite the growing need for talent, Roed-Frederiksen said only a small number of SMVdanmark’s members have foreign employees. 

“Smaller companies don’t have as much experience with hiring foreigners as larger companies do,” he said. And, although Roed-Frederiksen thinks the hurdles of hiring internationals are easily overcome, he said they are “definitely bigger for smaller companies than for bigger companies.”

Dr. Poornima Luthra, a diversity and inclusion expert and associate professor at Copenhagen Business School, told The Local that “large companies have more resources to create their own global mobility teams, whereas SMEs don’t have those resources.”

“Sometimes, they may not even have an HR team,” said Luthra said, who is also a partner in Project Onboard Denmark, an Innovation Fund Denmark (Innovationsfonden) initiative to promote recruitment and retention of international talent at Danish SMEs.

One of the most significant obstacles SMEs face when hiring global talent, Luthra added, is cultural.

Although culture plays a significant role in the success of the onboarding process, Luthra said smaller companies are less likely to think about their workplace culture. 

“Often, their workplace culture is the founder’s culture, which is great, but there is the question of whether or not that culture is inclusive for diverse talent,” Luthra said.

Does hiring foreign workers change a company’s culture?

Kwitek’s experience in Dragør illustrates one of the reasons why SMEs may hesitate to hire global talent. 

“I think they were initially concerned that many things would have to change if I joined their team,” Kwitek said. 

After Kwitek joined the Hevea team, she learned that the company had previously experienced some inconveniences after hiring someone from abroad. Ultimately, that hire didn’t work out.

“When I joined, it was a totally different story,” Kwitek said. She immediately engaged in many of the company’s social activities and chatted with her coworkers in Danish as much as possible.

“I felt like I may have subconsciously adapted so my colleagues wouldn’t have to,” Kwitek said. “I didn’t want them to have to operate any differently.”  

Thankfully, she was already familiar with Danish work culture, having moved to Denmark eight years ago for her studies. She thinks it would have been more challenging if she’d come to the job straight from Poland. 

“I think I needed time to adapt to the Danish work culture before I could have fit so well within a month,” she said.

How—and why—should a company prepare for new international employees?

Kwitek’s experience reflects what Luthra calls a person’s “cultural thumbprint”—the unique life experiences that shape a person’s cultural perspective. 

Her familiarity with Danish work culture (and the Danish language) made it easier to transition into a wholly Danish office. But, that won’t always be the case. 

That’s why Luthra recommends cross-cultural awareness training for all stakeholders—the leadership team, colleagues, and new hire—before the new employee’s first day to minimize potential issues, big or small.

“[Cultural differences] seem like a small thing, especially compared with big things like visas or finding accommodation and schooling for one’s children,” Luthra said, “but it is often the small things that most affect peoples’ sense of inclusion and belonging.”

Luthra offered a recent example where a new employee from South America wished his Danish colleagues good morning at the start of a 10am meeting. 

“Several of them laughed because 10am is considered midday by many Danes,” she said. “Their reaction could be seen as making fun of him and starting off that relationship in an unfortunate way.” 

Overcoming that misunderstanding, Luthra added, could be as simple as asking questions in a curious and collegial manner.

“That opens up the conversation so the Danish colleagues can explain why 10am isn’t really morning for them, when their work day begins, that they go to lunch at 11am, etc.,” Luthra said, “and it opens it up for the South American colleague to explain his own cultural practices.”

Ultimately, Luthra added, the successful onboarding of a new international hire is a matter of give and take. 

“Inclusion goes both ways,” Luthra said. “No one party is more accountable than the others. It’s not just about the person coming in, but it’s also about their colleagues and leadership.” 

What are some ways to prevent Danish employees from feeling displaced?

Kwitek said her ability to speak Danish with her colleagues from day one was key. Although she performs most of her work in English, Danish is the prevailing language around the office. 

“I think Danish is important to show my personality, to truly get to know my colleagues, and to be more involved at the company,” she said. However, it is a give and take.

“My colleagues do sometimes have to repeat things a few times or explain them in another way,” Kwitek said. And she’s not afraid to ask them to speak in English if need be.

“Multilingualism is a great way to ensure local talent feel their language is being retained, while also ensuring that the new person can understand things immediately,” she said. 

In practice, this might mean that meetings will be held in English until the new employee’s Danish skills have improved. “Even if the company intends to transition entirely to English, this is a more natural pathway to that,” Luthra said.

But, she said, it will take time and patience to reach an equilibrium where all parties give and take, “especially when it’s a company’s first international employee.”

READ ALSO: More foreign nationals have full time jobs in Denmark than ever before

What does a multicultural SME look like, in reality?

Copenhagen-based Penneo is a medium-sized Danish company that has hired global talent since the company’s founding nearly 10 years ago. 

Penneo hired its first international, from Venezuela, within its first few months. Today, roughly half of the company’s 90 employees are foreign-born. 

“We knew early on that the technical skills we’d need would be hard to find in Denmark,” said co-founder Mikkel Clausen. 

English is the company’s primary language, and employees only speak Danish if there are no foreigners in the room. However, Clausen said, “There are thousands of things to be aware of, and not just in terms of language.” 

For example, Clausen tries to “remove Danish biases” when measuring employees’ performance. “I can’t expect employees moving from other countries to immediately understand that in Denmark it’s okay to say what you really think without it affecting your career,” he said. 

Clausen also tries to look at the company culture as a non-Dane might and plan accordingly. “It may be normal to drink a beer at work in Denmark, but the environment has to be such that people don’t feel weird if they don’t want to drink,” he said. 

Although Clausen strives to make Penneo’s culture inclusive, he recognises that doesn’t mean it will be a good fit for every international. 

Before hiring global talent, Clausen tries to understand the potential employee’s work culture, as well as the type of work culture they want to be a part of. 

“Cultural differences aren’t a dealbreaker,” Clausen said. “Maybe they want a different work culture than what they’re used to. I just want to be sure to bring people into our team who are at least interested in fitting into our culture.”

Luthra said any successful onboarding of an international hire—especially the first international hire—starts with the leadership team. 

Not only do they help co-create the culture of the organisation and set the expectations for an inclusive workplace, but they are also the ones to communicate why the company is hiring someone who isn’t Danish in the first place. 

“Whether it be a local talent shortage, the need to expand globally and better understand customers abroad, or to bring in new ideas,” Luthra said, “if employees aren’t aware of the business need, they may struggle to connect with the reason for these changes.”

Luthra said there has never been more awareness about the need for international talent than there is right now. “At the same time, there’s skepticism about what that will mean for Denmark culturally,” she said. 

“That’s why the conversation on why global talent is needed for a company or for Denmark as a whole is so important.”

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Demand for labour remains high in Denmark with employment up for 14th straight month

Denmark’s labour market remains on a trend which has seen the number of people in paid employment in the country grow month-on-month since early 2021.

Demand for labour remains high in Denmark with employment up for 14th straight month

New data from national agency Statistics Denmark shows that the number of people in paid employment increased by 16,000 between February and March this year and now stands at 2,947,000. The data is corrected for variations caused by work that is season-dependent.

The new figures represent the 14th consecutive month in which the number of people working in Denmark has increased.

Additionally, more people are in work now compared to just before the Covid-19 pandemic hit, with a knock-on effect on the economy and jobs.

145,000 more people are hired now than just before the Covid-19 crisis, senior economist with Sydbank, Mathias Dollerup Sproegel, told news wire Ritzau.

“The labour market continues to be a ray of sunshine in the Danish economy,” Sproegel said.

“Aside from record-high employment, unemployment is also close to the record-low from before 2008. That tells us that the labour force has been strengthen somewhat in recent years,” he said.

“That is due to earlier political reforms and an active effort to bring all available hands in the Danish economy into play,” he said.

READ ALSO: How Danish work permit rules are keeping out skilled foreigners living in Sweden

Another analyst, senior economist Lars Olsen with Danske Bank, said the figures evidenced that it is still possible to find staff to fill the many available positions on the labour market.

“This suggests that there are still reserves to draw on, probably among students and people who have not previously had a strong connection to the labour market,” he said in a written comment.

“It would also seem to help that the age of the state pension has been put up again this year, so nobody will reach pension age during the first half of this year,” he said.

READ ALSO: Could Denmark delay plan to increase retirement age?

Hotels and restaurants are among sectors which saw the strongest growth in employment in March, with over 5,500 new hires giving an increase of 4.6 percent.

Culture and leisure also saw notable growth at 3.3 percent or 1,900 people.