Stockholm Chamber of Commerce - A functioning system for labour migration is crucial for Stockholm's growth

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Business climate

A functioning system for labour migration is crucial for Stockholm's growth

Favourable conditions for labour migration would enable Sweden to compete for international labour.

In December 2008 new rules were introduced for labour migration. The purpose was to make it easier for employers to hire labour from outside Europe and thereby offset labour shortages and maintain labour supply. The most important change was that employers themselves were allowed to determine when recruitment from a third country was necessary.

The reform was evaluated by the OECD after its implementation. Although the conclusion was that the system is straightforward, fast and cheap for employers, there is still room for improvements in the reform.

The economic value of labour migration

In total, labour migrants' annual contributions to the Swedish production sum up to approximately SEK 10 billion and around SEK 4 billion in tax revenue. Relatively small changes in recruitment patterns of the labour migrants have large effect on production levels and tax revenues. Therefore it is important to protect and develop the labour migration legislation.

The reform’s effects in the Stockholm Region

The Stockholm Chamber of Commerce evaluated the reform and its impact on the Stockholm region five years after its implementation in a short report (Swedish title; Arbetskraftsinvandringen är avgörande för Stockholmsjobben).

Shortage of IT-specialists

A functioning system for labour migration is crucial for Sweden’s and Stockholm’s growth. Europe could face a shortage of up to one million IT professionals by 2020, according to the European Commission. By that time, Sweden will have a shortage of 60 000 IT-specialists according to the Swedish Public Employment Service (Arbetsförmedlingen). The shortage is also acute in a number of areas such as healthcare.

A predictable, easy to understand and prompt system for labour migration is required in order to solve the lack of competencies. Many companies, especially fast growing high tech companies such as Spotify, Klarna, Truecaller and Tata Consultancy Services are dependent on recruiting world class developers.

Challenges

Employers are not provided with favourable conditions for employing labour from a third country.

Talents being deported because of minor errors by employers

Minor mistake years ago, even committed by a previous employer results in talents being deported from Sweden. This does not only result in personal tragedies for the labour migrants and their families but also for companies losing their colleagues. The Stockholm Chamber of Commerce shone the spotlight on Tayyab Shabab’s case.

Despite pressures from the Stockholm Chamber, media, labour migrants and other stakeholders, the Government has still not taken any actions to solve this ongoing problem.

Unreasonably long processing times

Processing times are unreasonably long, especially when applying for extended work permits. Also, the differences in processing times for work permits have increased in recent years.

Unpredictability caused by the wide margin of interpretation

The regulations have been applied inconsistently, both over time and between case officers at the Swedish Migration Agency. Changing interpretations of the regulations leads to unpredictability. Being able to clarify and convey, to employers, employees and their representatives, how the Swedish Migration Agency interpret the legislation and new case laws remains a great challenge.

Unclear statements from the Government

The Minister of Justice, Mr Morgan Johansson has made several statements saying he wants to investigate what can be done to solve the problems with the current deportations. One statement in which he referred to a meeting with the Stockholm Chamber of Commerce.

As of yet, no concrete actions from the Government has been taken despite the large media coverage on the deportations, its negative consequences on Sweden’s image as an attractive country for talents and on the Swedish economy. Nor has the Government been willing to explain when and how they are planning to initiate this new investigation.

Stockholm Chamber of Commerce’s proposals


Read the PM A functioning system for labour migration is crucial for Stockholm's growth here.