25 June 2013

Eastern European workforce is here to stay

Eastern European workforce

When Danish employers hire East European workers it is mainly because they experience them as flexible and willing to work whilst carrying out work of the same quality as Danish employees, at a lower cost. A newly published book from the Employment Relations Research Centre (FAOS) at University of Copenhagen argues that the Eastern European workforce in Denmark is here to stay.

Workforce photo"42 percent of the companies in our survey state that the primary reason for employing East European workers is the lack of a qualified Danish workforce. This is not synonymous with a lack of professional qualifications or skills but rather, that East European workers are seen to be more flexible and willing to work – with less sick leave – than their Danish counterparts," says Director at FAOS, Søren Kaj Andersen.

The book, 'Danish companies' use of Eastern European workforce', co-authored by Research Assistant Jonas Felbo-Kolding, focuses on labour force strategies and practices by Danish businesses.

Salary slightly above minimum wage

It appears, based on the answers in the survey, that the majority of East European workers employed within Danish companies recieve a salary slightly above minimum wage in accordance with the collective agreement. This salary will typically be lower than that of Danish employees in a similar job.

"The East European with lower salery demands who arrives in Denmark, possibly without any family commitments, hence willing to work and be flexible, will more than likely be perceived as attractive labour for many Danish businesses," says Søren Kaj Andersen and explains:

"This does not imply that Danish employees are unwilling to work or inflexible. This is not what our study indicates. It does however indicate that there is a heightened degree of competition for unskilled work in the industries which we investigated."

The following industries were included in the study: agriculture, service and hospitality, building and contruction, as well as selected areas of the industry, and cleaning services.

Not just at peak times

The survey asked over 10,000 companies about their use of East European labour. Based on the incoming responses, 1,370 companies were subsequently interviewed not just about their motivations for employing or not employing East European workers, but also about their experiences as well as salary and working conditions.

The survey showed that 9 per cent of the private Danish companies with five or more employees did in fact employ East European workers. The survey also showed that East European workers are not merely in Denmark to solve short-term needs for Danish businesses but that they have become an integral part of the Danish labour market.

"8 out of 10 of the companies employing East European workers state that they have become part of the ’ordinary operations’ of the business. In other words, the East European labour force is no longer just a solution for peak times, e.g.during a financial upturn," says Søren Kaj Andersen.

This is emphasised by the fact that as much as 78 per cent of the businesses expect a continued use of East European labour as part of their work force.

A common European labour market

The EU enlargement in 2004 and 2007 created a ’globalisation’ within the EU. Consequently, Danish businesses had a more immidiate access to the recruitment of labour from low-wage countries to the Danish labour market. The financial boom leading up to the financial crisis resulted in record-high rates of employment and attracked large numbers of East European workers. With the financial crisis came a significant rise in unemployment, yet despite this development, the number of East European workers on the Danish labour market has continued to rise.

This trend is set to continue which in turn means that East European workers will constitute an even greater percentage of the labour force. This will lead to challenges for both the regulation and the conditions on the Danish labour market. The combination of open labour markets and neighbouring low-wage economies has the potential to squeeze salaries and create long-term societal changes.

However previous studies indicate that East Europeans do not look for work in western Europe purely for economic gain or because of the new opportunites brought on by the EU Enlargement. Instead the primary incentive is in fact the demand for East European labour by western European businesses.

"Based on this finding we have chosen to focus on the employers and thus their explanations as to why they employ East European workers," says Søren Kaj Andersen.

Director of FAOS Søren Kaj Andersen
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