Recruitment Crisis

What you were looking for was there all along

Danish industry plans to spend billions of kroner recruiting workers abroad while thousands are out of work at home

How many people are actually out of work in Denmark?

In 2023, there were about 60 thousand foreigners in Denmark who were “outside the labour market” plus nearly 19 thousand who were officially unemployed¹. For locals (Danes and so-called ‘descendants²’), there were 52 thousand unemployed and nearly 70 thousand “outside the labour market”. That’s about 200 thousand people.

I have separately estimated there are about 40 thousand EU (excluding the Nordics) spouses who do not have jobs. I am not sure what the true number of out of work employable adults in Denmark is but that’s sort of my point: no one does.

Invisible Unemployment

Wait! Aren’t some of them just... not looking?

Not everyone in those stats wants/needs to work. They might not even be able to because of studies or caring or some disabilities. By the same token, it is unlikely that the entire dataset is completely unemployable either.

It is hugely problematic that the true figures of people that can and want to work are hidden.

Who are these people really?

Let me see if I can make a comprehensive list of as many of the circumstances such people might be in:-

• Newly qualified (local and international) and unable to secure their first job without experience

• Career changers unable to secure their first job without “relevant” experience

• Accompanying spouses of international workers

• Returning Danes

• Attracted to Denmark by job campaigns (such as the Iranian nurses), but not able to get a job

• Disabled and neurodivergent people

• International partners of Danes

• Danish people who have foreign names or wear religious headgear such as hijab or a turban

And many people will have overlapping circumstances.

So, how many could be working but aren't?

Two hundred thousand people and how many of them wish they had jobs? How many of them are very employable but for stupid reasons like shyness or a crap network or a badly formatted cv, they just don’t get to work?

What’s the official plan?

The Moderates in Denmark have said they want to attract 90 000 more international workers by 2030. Taken at face value, that’s about 18 000 new workers every year for five years, right? As of this year, new work permit immigration is at about 26 000 and in some years it is around 30 000³. Sounds like they have it taped, right?

I have some bad news for them. Five year retention rates are so poor⁴, they need to attract more than that. How much more than that?

For the usual composition of immigrants: 166 000 or so over the five years. Crudely speaking, in the first year you would need to recruit twice as many people because half of them are going to have left by the time it is 2030.

Modelling

Let's model two extreme scenarios to see how recruitment strategy affects the bottom line.

If Denmark only recruited single people (whose retention rates are a bit worse than the average), they’d need to find 180 000 or so.

If they only recruited couples and made sure both partners had a job the retention rate goes up about 10 percentage points. They can recruit 125 000 to hit their target. Plus they’d only need housing for 62 500 new households, right? (Since they come in a set.)

Let me convert that into kroner and øre since this is a business decision.

Recruiting 90 000 international people at 40 000 kr a pop (which is what Perplexity⁵ suggested international recruitment and onboarding might cost), is 3.6 billion kroner over the five years.

Recruiting twice as many to compensate for poor retention is clearly double that: 7.2 billion kroner .

Recruiting 90 000 people from the pool of 200 000 (Danish, international and everything in between), people out of work already here is cheaper. Maybe 27 000 kroner per position hired? That’s 2.4 billion kroner all in.

That is quite the saving, whether you compare it to the recruitment of “only” 90 000 or twice as more to account for attrition.

What if you hired the spouse too?

Now, let’s say that none of the 200 000 people out of work in Denmark are qualified to do highly specialised or technical roles. It could happen! So, they need to go abroad to get those people. If they choose someone with a partner who is work-market-ready too, then they pay 40 000 to recruit one from abroad and then 27 000 to recruit the partner who arrives at the same time.

They need fewer couples than single people, since retention is better when both partners have jobs. Recruitment in this scenario would cost 4.2 billion kroner, I estimate. A saving of 3 billion kroner compared to hiring heaps of single people because you burn through them like wildfire.

Cui bono

Now, I am all for people letting the status quo do its own thing. I am fine with people giving up in the face of adversity. It is genuinely ok if Denmark recognises that it cannot change. But don’t people want to make more money?

Recruiting from the people already here could save billions of kroner and would result in zero extra pressure on housing and services.

Recruiting couples and making sure that the spouse gets a job, (if that’s what they want), saves billions of kroner and results in less pressure on housing and services than recruiting single people.

We know that job fairs and cv workshops are part of the puzzle but they have been tried for over a decade and retention is in decline.

The Ministry of Employment spends some of its budget on attending job fairs abroad and matching internationals with employers. They could also spend some of their budget matching people already here with job opportunities instead of leaving it up to chance.

Student Pathway

They’re not planning on getting everyone directly from abroad though, I should mention. They are expanding the number of English language courses such as Data Science and so on, so there will be a ready bank of international labour already here.

I love the optimism but where it falls down is that even Danish graduates struggle to get their first job because most employers look for 3-5 years of experience for almost all roles. And even if they’re open to entry level, if someone with 3-5 years applies then it’s a no-brainer. The idea that employers would suddenly get so desperate that they’d take a chance on a new international graduate (with limited Danish work experience, limited Danish network, limited Danish language skills and a foreign name), is risible. But no one is giving employers feedback on this matter.

One political side of this issue doesn’t really want the international students and workforce in the first place and the other political side are too close to the business community to be a critical friend.

They’ve asked for more English language courses and more English language courses they will get!

Here’s the model if you want to check

I coded an app to explore my recruitment and retention model in more detail.

https://fastholdelse-retention.streamlit.app/

Now I want to hear from people who understand Danish employment policy better than I do: what assumptions am I getting wrong?

Because if I’m right, why am I the only one talking about the exact billions of kroner we’re pissing away on people we do not appear serious about allowing to thrive so they stay?

1. The distinction is about whether you are registered with the job centre or not. Source for these stats: statbank.dk/ras201

2. Descendants are people born in Denmark with foreign heritage

3. Source: statbank.dk/van8k

4. https://www.kk.dk/om-kommunen/fakta-og-statistik/noegletalsanalyser

5. It’s either genius or massively reckless that I got a robot to research this question for me:

https://www.perplexity.ai/search/how-much-does-recruitment-onbo-_zNeHgLvTJKYTwTrqRs9SA