Swedish Labour Market Analysis: Vacancies Stagnate

High inflation rates coupled with record low unemployment rates currently characterise a mixed picture for European labour markets as we start a new year.

In Sweden the annual inflation rate soared to 11.5% in November 2022, the highest since February 1991, following a 10.9% surge in October. With the unemployment rate falling but still above the EU average, the outlook seems challenging in Sweden.

With global financial markets in turmoil over rising interest rates, an energy price crisis hitting Europe hard, as well as global supply chain shortages, record inflationary pressure and the escalation of the war in Ukraine, Sweden is not alone in feeling the pressure. The challenges on the labour market have been constant and diverse over the past year.

Let’s look deeper at the situation in Sweden.

Macro Environment in Sweden

The Swedish employment market, known for its strength in transportation, technology, engineering (civil and mechanical) and financial areas, is suffering from a “talent brist,” or talent shortage, according to Magnit’s experts. There has been a wave of resignations and new hires, particularly in the technology sector. The country’s tech talent shortage has been driven by two primary factors:

• A significant inflow of new start-ups crowding the market out from more established businesses. With more entrepreneurs wanting to follow in the footsteps of Swedish success stories like Spotify and Klarna, the start-up scene continues to attract investment and new opportunities.

• Strict policies and long waiting times for work permit processing from the Swedish Migrations Agency. In fact, the country’s parliamentary Ombudsman recently spoke about the time taken for Sweden's Migration Agency to process asylum, work permit, and other requests, calling it “unacceptable”. 

In non-tech areas, Swedish language fluency can be a barrier for foreign talent as it takes time to learn the language before a candidate can hit the job market, particularly in roles in finance, compliance, teaching, civil engineering and more. 

Furthermore, a new nationalist government is driving an increasingly strict regulatory environment for contingent labour. This political change, coupled with broader macroeconomic factors such as inflationary pressure and the war in Ukraine, is dampening the Swedish employment market. 

Skills in Demand in Sweden

There is an abundance of candidates for roles such as quality assurance, project and product management, agile coaching, as well as scrum masters, compliance officers, and developers. Conversely, Magnit’s in-country experts identify that candidates with skills in machine learning, AI, full stack development, cybersecurity and cloud are more difficult to find in Sweden. Emerging skills such as SRE, design ops, HR and transformation leads, organisational development consultants, and block chain architects are increasingly in demand. 

Remuneration and Benefits in Sweden

Given the volatile economic climate, there is a need for personnel who are experts in future-proofing businesses from macroeconomic downswings and understanding how an organization should be structured from business, operations and implementation perspectives. The unemployment rate in Sweden has remained around 3% higher than the rest of the countries featured in this report and is closer to the EU27 average than the others, although it is on a downward trend. 

There has continued to be wage and benefit increases, but according to ONS data there has been little growth in the past year in terms of vacancies. Magnit research suggests that this vacancy stagnation may be driven by companies taking a cautious approach to hiring while looking to retain existing talent. In terms of specific benefits on offer, there is a large push for remote and hybrid working, with some major corporations such as Spotify working entirely remote. 

Download the Full Report for More

For more analysis of the European labour market, download our new report. The Winter 2023 Europe Labour Market Report features analysis on high-level trends across Europe, as well as a deep dive on Europe’s major markets. Discover the specific situation in each market, as well as best-practice tips for sourcing talent in Europe today.

If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at info@magnitglobal.com.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.