10 ms·

Sweden's Job-Security Councils Make Layoffs Easier

55 points by imartin2k 9y ago

Overtonwindow 9y ago
This is what I always believed unemployment SHOULD BE in America. The amount from unemployment is painfully low for most people who need it, but having been on unemployment a few times, beyond the check, there's very little support.
- geofft 9y ago
  Social protections for the unemployed allow you to disentangle "Should I ruin this person's life" and "Is this person contributing to my business". I understand the reasons why those two got entangled historically, but I've always thought anyone who's really invested in a society with both laissez-faire capitalism and a claim to moral decency should support an extremely generous social safety net.
  - walshemj 9y ago
    For some people SS in the USA is more generous when I worked for a company that went bust benefits £56 pounds a week ran out after 18 weeks.
SOLAR_FIELDS 9y ago
My anecdotal experience, from having lived in Sweden and worked with Swedes for some time now, is that actually firing someone in Sweden for performance reasons is quite difficult for both cultural reasons and worker protections. So this might make the process of widespread company layoffs easier on the employee, but it's not something that makes the workforce significantly more mobile, at least from an outsider's perspective.
- rnd33 9y ago
  Definitely agree, firing someone for performance reasons is so rare that unless the person is generally disliked, and generally thought to be really bad at his/her job morale will take a huge hit.
- emj 9y ago
  This is more or less true, big layoffs are pretty easy in Sweden, but some organizations can easily kick out people for performance issues, even though it's supposed to be hard.
- surfmike 9y ago
  Based on experience from Norwegian colleagues: Yes it is more difficult than in say the US but not that hard. You just must document over a period of months that the employee is underperforming and not improving; you can’t just fire them with no notice or warning. Most big corporations in the US work this way anyway as well.
  - pyronik 9y ago
    Yeah and its a complete pain in the ass. It's funny these people can't do their jobs but they are masters of using HR departments to shield them from their own incompetence.
    - forapurpose 9y ago
      Or are they using reasonable leverage to protect themselves from employers who fail at their jobs (good management, training, obtaining and allocating resources, etc.) or who fire good employees for bad reasons (whistleblowers, scapegoats, to protect the job of the person you're sleeping with, etc.).
    - jernfrost 9y ago
      In my experience managers are utterly horrible at giving early feedback to people who are not performing, and working with them to improve. It is I suppose part of human nature. People think it is awkward to deal with so they avoid it. You have to consider that for society it is very wasteful to have people live off welfare schemes rather than working. Even if you are not a high performance worker, it is better for society that you are working than staying unemployed.
      - pyronik 9y ago
        No amount of feedback can turn a lemon. Also, its not the role of corporations to play makework and pretend they are contributing. So someone gets fired and takes a job more befitting of their abilities... that's not welfare that's just life.
  - alkonaut 9y ago
- alkonaut 9y ago
  > but it's not something that makes the workforce significantly more mobile, Right. The rules for layoffs are more or less that "performance" is not a valid grounds for firing someone. The reasoning here is that the employees performance is the responsibility of the employer, who has to provide management, training etc. An employee have to basically mismanage their job to the point where it's illegal to be possible to fire. Now, you can always fire Joe because he's a slow worker- but the union will protest. He'll likely be fired anyway, but it'll cost the employer (Joe will get a years salary and leave). The rules are basically "First in first out" - and employers have to buy each exception. The same would apply when closing a whole branch/factory for example. The employer likely knows which 20% of staff they would like to keep around, but they will have to wrestle with the union for every exception to the order. It's usually well worth the money for employers to keep the good employees and let the worst go. In Sweden this is effectively the only way you can make the "stack ranking": you move a bunch of workers to a special branch or factory. Then shut down that product/factory/office. Then pay those workers a years salary or two to not come back. So the solution discussed in the article is meant to make it easier for companies to change strategies e.g. by laying off entire branches. Such as banks closing offices now that most people bank online, or Ericsson shutting down all their factcories that made landline phone switches. It's not about the ease of firing individual employees. A system for making labor laws less strict to make it easier to lay off individual employees is popularly called "Flexicurity" after the model used in Denmark. Basically, the worker collective would accept liberalization of the ordering rules in exchange for public safety nets being so good that being laid off doesn't really matter (Say e.g. 80 or 90% pay in unemployment benefits). This type of model has been proposed for Sweden, but it has never really been close to being implemented yet.
  - gaius 9y ago
    This is how it is in France, off the top of my head, unemployment is 85% of salary for up to 2 years. I know a few people who just chillaxed after the dot-com bust in '01 waiting for the economy to pick back up again.
  - jordanb 9y ago
    > In Sweden this is effectively the only way you can make the "stack ranking": you move a bunch of workers to a special branch or factory. Stack-ranking has been horrible every place it's been tried so I'm not really sure how this is a bad thing. From what I've seen in my time in corporate America, poor performers are often kept around regardless of if a union is involved or not for a variety of reasons: * firing someone for performance is a hassle even without any union representation because HR requires careful documentation, * for the manager, firing an employee for performance means admitting that you made a mistake on hiring, * firing the person may put the budget for their salary at risk, and * if layoffs were to happen in the near future the manager will need the person as a sacrificial lamb to protect the rest of the team (this behavior is greatly enhanced by stack ranking, to the point where people are hired specifically so they can later be marked as non-performers and let go in the next culling).
- WalterBright 9y ago
  The harder it is to fire someone, the more reluctant companies will be to hire people, and the more choosy they'll be.
  - expertentipp 9y ago
    Looking at the absurd and unpenetrable job search market we might be around the peak of this phenomenon currently.
  - eesmith 9y ago
    You make it sound like "more choosy" is a bad thing. Aren't all the big technology companies choosy about who they'll hire? The numbers given the essay suggest that Sweden's employment rate is not unusually low, so is your comment really a meaningful basis for making a policy decision? When it's easy to fire people, it's also easy to fire people for personally motivated reasons, rather than reasons which are good for the company. For example, the boss might want to fire someone to bring in a family member. Nepotism isn't illegal. But the union contract helps prevent these sorts of (non-business related) firings. People tend to work better when they aren't worried about being fired for reasons that have little or nothing to do with their job.
    - WalterBright 9y ago
      > You make it sound like "more choosy" is a bad thing. Aren't all the big technology companies choosy about who they'll hire? Let me rephrase - less willing to give someone a chance who may not have done well in the job interview. > employment rate is not unusually low Wouldn't that also suggest that finding another job won't be difficult? > fire people for personally motivated reasons Why would you want to work for someone that dislikes you and doesn't want you around? > People tend to work better when they aren't worried about being fired A workplace where people hate each other doesn't sound like a happy place, either.
      - eesmith 9y ago
        I understand the model you are presenting. My question again is, is it useful enough to guide policy decisions? Based on the information given, it doesn't seem like it is. Perhaps there are other mechanisms in place (like this job-security council) which compensate? How would you expect the Swedish job market to look if employees didn't have these protections? You ask: "Why would you want to work for someone that dislikes you and doesn't want you around?" Here's an example from the blog of a small-town teacher I read. If you are a teacher, and coach Little League baseball, and the principal puts pressure on you to place the county education board member's grandson on the team (say it's from pressure from the board member), then who's going to back you if you refuse, and end up on the principal's bad side? Or are you going to quit your job, uproot your family, and move away? Because it's likely not easy to find another teaching job in the same small town. To put it another way, why is it that if 1 person dislikes you out of the 40 or 50 people you work with, and that person happens to be the principal, then you have to leave? Why does he deserve that much power over you?
- runj__ 9y ago
  Normally people are hired with a "provanställning" for the first three/six months, basically an at-will contract where you can fire the person for basically any reason (it's very pro-employer). In my experience you can tell if the person is going to be fired because of low performance in that time span. So "companies don't hire because it's hard to fire" doesn't really ring true for Sweden. People (in tech) don't hang around the same company for too long either, even when someone who doesn't know anything gets a cozy job some company is going pay them better for another cozy job.
expertentipp 9y ago
Funny, Swedish outsourcing centers in CE Europe don't have councils. They just pay half of Swedish salary, demand obedience, and fire at will. Job counseling those laid off? No such thing. Someone has to work for and pay for their luxurious conditions back home. You're welcome, Swedes - hope you'll choke on your redundancy packages.
- walshemj 9y ago
  Yes a lot of European companies that behave well at home behave badly overseas I know of one that artificially bankrupted a uk subsidiary to avoid paying the statutory redundancy payments. They called every one to a meeting said where bankrupt you don't have a job and there's a pile of RB2 forms over there. Th Rb2 form is to claim the much reduced redundancy payment from the state, when the parent company could have paid the statutory redundancy out of petty cash
  - TheAdamAndChe 9y ago
    This is why worker protection laws are so important. All big companies will behave sociopathically in order to maximize profits. It's only through government regulation that such anti-worker behavior can be limited and controlled.
    - ploxiln 9y ago
      This is why worker protection laws are so dumb. You just can't force other people to give other people money, they'll always find a way not to. Worst case they'll just practically never hire people in your country. So those people are desperate to get into another country without those worker protections, e.g. US or UK or NZ, so they can get a job and make some money. This is happening in France, Italy, Spain, etc.
      - TheAdamAndChe 9y ago
        Sounds more like that's a side effect of globalization. When other countries can provide more labor for less cost, it leads to a race to the bottom to see what country can provide the lowest wages, thus decreasing the quality of life for workers. I understand that return on investment is important, but corporate profits are overall higher than they have ever been before. When is enough enough? When should we start to again prioritize the quality of life of our workers? edit: To those downvoting me, could you please explain the flaw in my logic? I don't see what's wrong or inaccurate with either of my comments.

55 points by imartin2k 9y ago

This is what I always believed unemployment SHOULD BE in America. The amount from unemployment is painfully low for most people who need it, but having been on unemployment a few times, beyond the check, there's very little support.

geofft 9y ago
Social protections for the unemployed allow you to disentangle "Should I ruin this person's life" and "Is this person contributing to my business". I understand the reasons why those two got entangled historically, but I've always thought anyone who's really invested in a society with both laissez-faire capitalism and a claim to moral decency should support an extremely generous social safety net.
- walshemj 9y ago
  For some people SS in the USA is more generous when I worked for a company that went bust benefits £56 pounds a week ran out after 18 weeks.

SOLAR_FIELDS 9y ago

My anecdotal experience, from having lived in Sweden and worked with Swedes for some time now, is that actually firing someone in Sweden for performance reasons is quite difficult for both cultural reasons and worker protections. So this might make the process of widespread company layoffs easier on the employee, but it's not something that makes the workforce significantly more mobile, at least from an outsider's perspective.

rnd33 9y ago
Definitely agree, firing someone for performance reasons is so rare that unless the person is generally disliked, and generally thought to be really bad at his/her job morale will take a huge hit.
emj 9y ago
This is more or less true, big layoffs are pretty easy in Sweden, but some organizations can easily kick out people for performance issues, even though it's supposed to be hard.
surfmike 9y ago
Based on experience from Norwegian colleagues: Yes it is more difficult than in say the US but not that hard. You just must document over a period of months that the employee is underperforming and not improving; you can’t just fire them with no notice or warning. Most big corporations in the US work this way anyway as well.
- pyronik 9y ago
  Yeah and its a complete pain in the ass. It's funny these people can't do their jobs but they are masters of using HR departments to shield them from their own incompetence.
  - forapurpose 9y ago
    Or are they using reasonable leverage to protect themselves from employers who fail at their jobs (good management, training, obtaining and allocating resources, etc.) or who fire good employees for bad reasons (whistleblowers, scapegoats, to protect the job of the person you're sleeping with, etc.).
  - jernfrost 9y ago
    In my experience managers are utterly horrible at giving early feedback to people who are not performing, and working with them to improve. It is I suppose part of human nature. People think it is awkward to deal with so they avoid it. You have to consider that for society it is very wasteful to have people live off welfare schemes rather than working. Even if you are not a high performance worker, it is better for society that you are working than staying unemployed.
    - pyronik 9y ago
      No amount of feedback can turn a lemon. Also, its not the role of corporations to play makework and pretend they are contributing. So someone gets fired and takes a job more befitting of their abilities... that's not welfare that's just life.
- alkonaut 9y ago
alkonaut 9y ago
> but it's not something that makes the workforce significantly more mobile, Right. The rules for layoffs are more or less that "performance" is not a valid grounds for firing someone. The reasoning here is that the employees performance is the responsibility of the employer, who has to provide management, training etc. An employee have to basically mismanage their job to the point where it's illegal to be possible to fire. Now, you can always fire Joe because he's a slow worker- but the union will protest. He'll likely be fired anyway, but it'll cost the employer (Joe will get a years salary and leave). The rules are basically "First in first out" - and employers have to buy each exception. The same would apply when closing a whole branch/factory for example. The employer likely knows which 20% of staff they would like to keep around, but they will have to wrestle with the union for every exception to the order. It's usually well worth the money for employers to keep the good employees and let the worst go. In Sweden this is effectively the only way you can make the "stack ranking": you move a bunch of workers to a special branch or factory. Then shut down that product/factory/office. Then pay those workers a years salary or two to not come back. So the solution discussed in the article is meant to make it easier for companies to change strategies e.g. by laying off entire branches. Such as banks closing offices now that most people bank online, or Ericsson shutting down all their factcories that made landline phone switches. It's not about the ease of firing individual employees. A system for making labor laws less strict to make it easier to lay off individual employees is popularly called "Flexicurity" after the model used in Denmark. Basically, the worker collective would accept liberalization of the ordering rules in exchange for public safety nets being so good that being laid off doesn't really matter (Say e.g. 80 or 90% pay in unemployment benefits). This type of model has been proposed for Sweden, but it has never really been close to being implemented yet.
- gaius 9y ago
  This is how it is in France, off the top of my head, unemployment is 85% of salary for up to 2 years. I know a few people who just chillaxed after the dot-com bust in '01 waiting for the economy to pick back up again.
- jordanb 9y ago
  > In Sweden this is effectively the only way you can make the "stack ranking": you move a bunch of workers to a special branch or factory. Stack-ranking has been horrible every place it's been tried so I'm not really sure how this is a bad thing. From what I've seen in my time in corporate America, poor performers are often kept around regardless of if a union is involved or not for a variety of reasons: * firing someone for performance is a hassle even without any union representation because HR requires careful documentation, * for the manager, firing an employee for performance means admitting that you made a mistake on hiring, * firing the person may put the budget for their salary at risk, and * if layoffs were to happen in the near future the manager will need the person as a sacrificial lamb to protect the rest of the team (this behavior is greatly enhanced by stack ranking, to the point where people are hired specifically so they can later be marked as non-performers and let go in the next culling).
WalterBright 9y ago
The harder it is to fire someone, the more reluctant companies will be to hire people, and the more choosy they'll be.
- expertentipp 9y ago
  Looking at the absurd and unpenetrable job search market we might be around the peak of this phenomenon currently.
- eesmith 9y ago
  You make it sound like "more choosy" is a bad thing. Aren't all the big technology companies choosy about who they'll hire? The numbers given the essay suggest that Sweden's employment rate is not unusually low, so is your comment really a meaningful basis for making a policy decision? When it's easy to fire people, it's also easy to fire people for personally motivated reasons, rather than reasons which are good for the company. For example, the boss might want to fire someone to bring in a family member. Nepotism isn't illegal. But the union contract helps prevent these sorts of (non-business related) firings. People tend to work better when they aren't worried about being fired for reasons that have little or nothing to do with their job.
  - WalterBright 9y ago
    > You make it sound like "more choosy" is a bad thing. Aren't all the big technology companies choosy about who they'll hire? Let me rephrase - less willing to give someone a chance who may not have done well in the job interview. > employment rate is not unusually low Wouldn't that also suggest that finding another job won't be difficult? > fire people for personally motivated reasons Why would you want to work for someone that dislikes you and doesn't want you around? > People tend to work better when they aren't worried about being fired A workplace where people hate each other doesn't sound like a happy place, either.
    - eesmith 9y ago
      I understand the model you are presenting. My question again is, is it useful enough to guide policy decisions? Based on the information given, it doesn't seem like it is. Perhaps there are other mechanisms in place (like this job-security council) which compensate? How would you expect the Swedish job market to look if employees didn't have these protections? You ask: "Why would you want to work for someone that dislikes you and doesn't want you around?" Here's an example from the blog of a small-town teacher I read. If you are a teacher, and coach Little League baseball, and the principal puts pressure on you to place the county education board member's grandson on the team (say it's from pressure from the board member), then who's going to back you if you refuse, and end up on the principal's bad side? Or are you going to quit your job, uproot your family, and move away? Because it's likely not easy to find another teaching job in the same small town. To put it another way, why is it that if 1 person dislikes you out of the 40 or 50 people you work with, and that person happens to be the principal, then you have to leave? Why does he deserve that much power over you?
runj__ 9y ago
Normally people are hired with a "provanställning" for the first three/six months, basically an at-will contract where you can fire the person for basically any reason (it's very pro-employer). In my experience you can tell if the person is going to be fired because of low performance in that time span. So "companies don't hire because it's hard to fire" doesn't really ring true for Sweden. People (in tech) don't hang around the same company for too long either, even when someone who doesn't know anything gets a cozy job some company is going pay them better for another cozy job.

expertentipp 9y ago

Funny, Swedish outsourcing centers in CE Europe don't have councils. They just pay half of Swedish salary, demand obedience, and fire at will. Job counseling those laid off? No such thing. Someone has to work for and pay for their luxurious conditions back home. You're welcome, Swedes - hope you'll choke on your redundancy packages.

walshemj 9y ago
Yes a lot of European companies that behave well at home behave badly overseas I know of one that artificially bankrupted a uk subsidiary to avoid paying the statutory redundancy payments. They called every one to a meeting said where bankrupt you don't have a job and there's a pile of RB2 forms over there. Th Rb2 form is to claim the much reduced redundancy payment from the state, when the parent company could have paid the statutory redundancy out of petty cash
- TheAdamAndChe 9y ago
  This is why worker protection laws are so important. All big companies will behave sociopathically in order to maximize profits. It's only through government regulation that such anti-worker behavior can be limited and controlled.
  - ploxiln 9y ago
    This is why worker protection laws are so dumb. You just can't force other people to give other people money, they'll always find a way not to. Worst case they'll just practically never hire people in your country. So those people are desperate to get into another country without those worker protections, e.g. US or UK or NZ, so they can get a job and make some money. This is happening in France, Italy, Spain, etc.
    - TheAdamAndChe 9y ago
      Sounds more like that's a side effect of globalization. When other countries can provide more labor for less cost, it leads to a race to the bottom to see what country can provide the lowest wages, thus decreasing the quality of life for workers. I understand that return on investment is important, but corporate profits are overall higher than they have ever been before. When is enough enough? When should we start to again prioritize the quality of life of our workers? edit: To those downvoting me, could you please explain the flaw in my logic? I don't see what's wrong or inaccurate with either of my comments.