Key features of the Danish labour market:
- Competitive overall labour cost level
- Very flexible labour market
- Highly motivated and productive workforce
- Low frequency of strikes
- Well-organised labour market with good cooperation between the different parties
- Competitive remuneration costs for employees with higher education and management in general
Hiring and firing practices
Compared to other European countries the Danish rules for termination of contracts are very liberal. The employer is entitled to dismiss skilled and unskilled workers at any time, without incurring costs, making it easier for an individual business to adjust the size of its workforce in Denmark.
The Danish “flexicurity” model offers a high flexibility in hiring and firing practices which is unique in Europe. Wages and work hour rules are negotiated between labour market organizations or directly in the company to best address market conditions and business needs.
Read more about hiring Danish employees.
Business culture and working habits
The Danish workforce is perceived as highly motivated by foreign companies operating in Denmark. Danish employees are characterised as being healthily self-critical, with a will to learn and a commitment to improvement. A high level of education combined with independence and flexibility makes the Danish workforce capable of taking on tasks, which elsewhere would be reserved for management.
Competitive labour costs
At first sight, Danish wages may seem high compared to other European countries. The competitiveness of Danish labour costs is, however, visible when one takes into consideration both wages and non-wages, as employers have low cost burdens in terms of social security, labour taxes etc. This makes the overall labour cost very competitive.
The Danish social security system is financed through taxes paid by the employees. In this way Denmark differs from a number of other countries, where major contributions to the social security system come from the employers.
Social Security Contributions
Compulsory contribution as a percentage of an income equal to GDP per capita. Source: IMD 2009
Denmark offers a high level of social security. For example, anyone suffering a loss of income due to illness or injury while in active employment has the right to sickness benefit from the first day of absence.
The rules for working in Denmark are in general among the most flexible and liberal in Europe. The normal working hours in Denmark are 37 hours in a five-day week. All employees are guaranteed 5 weeks of paid vacation every year.
In contrast to many other European countries, no restrictions apply in Denmark regarding night and weekend work, which means that companies are allowed to operate 24 hours a day, 365 days a year.
Labour qualifications and education
The public education system is free and as a result, Denmark has one of the most well-educated populations in the Europe Union with a high proportion of university graduates. 80 percent of the population has attained at least upper secondary education.
Excellent language skills
The Danish population has excellent foreign language skills, as Denmark is relatively small and globally oriented. It is not a problem finding multi-lingual staff in Denmark; 80% of the Danish workforce speak English, 53% German, 11% French and 10% Swedish.
It is generally advised to cooperate with recruitment companies with many years of experience and understanding of the market to undertake the recruitment process in order to ensure the correct match of professional and personal competencies in the right jobs.