Danish companies demand political pledge for 50,000 new staff

A major business interest organisation in the Danish private sector has urged the winners of the upcoming election to ensure at least 50,000 new workers on the country’s labour market.

Danish companies demand political pledge for 50,000 new staff
Many private sector industries in Denmark are short of skilled staff. File photo: Mads Claus Rasmussen/Ritzau Scanpix

Danish private sector industries say they are still desperate for staff, highlighting that labour shortages continue to impact both the private and public sectors.

Shortages in the health and social care sectors have been highlighted during the ongoing election campaign.

The private sector – through the voice of the Confederation of Danish Industry (Dansk Industri, DI) – told broadcaster DR on Friday that it wants whoever wins the November 1st election to pledge measures aimed at attracting 50,000 additional pairs of hands for private companies.

The last six months has seen Danish companies fail to fill advertised job vacancies 13,000 times, according to DR.

A lack of staff is resulting in businesses turning down orders and thereby missing out on revenue.

READ ALSO: Could Denmark’s election result affect work permit and citizenship rules?

By setting out policy to address the situation at the beginning of its term, a new government could achieve much to tackle the problem over a four-year period, DI says.

“This problem is not going away. Even in a time with war in Europe, an energy crisis and bulging inflation, we still need labour for businesses,” DI’s director Lars Sandahl said to DR.

Employment minister Peter Hummelgaard recognised the issue without making any specific promises.

“We are very prepared for it to be a Social Democratic-led government’s project to work for an provide continued increased employment in Denmark, fewer unemployed, and overall that we acquire the qualified labour that many industries need,” he said.

An additional 10,000 people were hired in Denmark in August, following a drop in the employment number in July which went against the general trend of high employment and shortage of labour.

There were 10,300 more people working in August than in July, with July’s number 5,000 lower than June, according to Statistics Denmark.

The July drop-off followed 17 consecutive months of rising employment.

This summer saw Denmark approve, after protracted negotiations, a reform to its Pay Limit Scheme, a criteria system used to grant work permits to non-EU nationals.

The agreement means that Danish companies can now hire skilled foreign staff on contracts paying an annual salary of 375,000 kroner, and that the foreign employees can be granted work and residence permits on that basis. The new pay limit is a 16 percent decrease from the previous 448,000 kroner. As such, skilled foreign labour can be recruited at a lower cost to companies.

While business organisations welcomed the deal at the time (and trade unions criticised it for potentially impacting Danish wages), they later said it did not go far enough to alleviate the country’s labour shortage.

READ ALSO: How can you get a work permit in Denmark if you are not an EU national? 

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Unemployment down in Denmark but analysts predict more without work

The number of people without work in Denmark fell slightly in October, with the total of 75,200 lower than September’s figure by 200.

Unemployment down in Denmark but analysts predict more without work

The data from Statistics Denmark therefore show a marginal decrease, which does not translate to a percentage drop in employment according to the agency.

That means 2.6 percent of Denmark’s workforce is still currently unemployed.

“The small drop in October is due to 300 fewer non-activated [not in return-to-work programmes, ed.] and 100 more activated jobseekers,” Statistics Denmark said.

Unemployment appears to still be trending downwards, which analyst Brian Friis Helmer of Arebejdernes Landsbank said was surprising.

“We have an economy that actually looks good but we have sky-high inflation and dreary economic forecasts. So it’s surprising that both unemployment and employment still seem to be withstanding this headwind,” he said.

But it is a matter of time before unemployment begins to creep upwards, according to senior economist Tore Stramer of the Danish Chamber of Commerce (Dansk Erhverv).

“The more forward-looking key metrics for the labour market have unfortunately begun to wobble considerably in recent months,” Stramer said.

“The number of available job notices has fallen by around 22 percent since February and the number of redundancy notices has meanwhile increased to the highest level since the coronavirus crisis in 2020,” he said in a written comment to news wire Ritzau.

The economist said he expects unemployment to go up by between 25,000 and 50,000 by the end of 2023.

An additional 20,000 people could lose their jobs in 2024, he said.

The construction and hospitality sectors could be amongst the most vulnerable,” he said.

Another analyst, Sydbank senior economist Søren Kristensen, also told Ritzau he believes unemployment will go up but said a slight cooling down of the labour market might be beneficial. Denmark is currently experiencing a labour shortage in several sectors.

“But we are concerned this might be a case of more than just a cooling-off,” he said.

“We expect a fall in employment figures of more than 60,000 persons during the course of 2023. They won’t all show up as being unemployed persons but we could easily end up in a situation where interest and inflation combine to catapult the number of unemployed people to over 100,000,” he said.