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Why does Denmark have so many job vacancies?

The number of job vacancies in Denmark is at its highest level for over a decade, according to new figures released on Thursday.

Why does Denmark have so many job vacancies?
File photo: Thomas Lekfeldt/Ritzau Scanpix

A total of 53,500 private sector vacancies were registered in the second quarter of 2021, an increase of 14,000 compared to the preceding quarter and the highest number in the 11 years the data has been recorded, according to Statistics Denmark.

Vacant positions now comprise 3 percent of all jobs in Denmark, according to the agency.

Meanwhile, figures from job website Jobindex show that vacancies at the end of August were at their highest level since February 2008, shortly before Denmark was hit by the global financial crisis.

As vacancies have soared over the summer, so has the number of people employed on the Danish labour market.

Unemployment is now close to dropping under the level it was at immediately prior to the Covid-19 crisis.

READ ALSO: Denmark wants migrants to work for welfare benefits

The two trends are evidence of Denmark’s emergence from the economic impacts of the coronavirus, according to Jeppe Juul Borre, senior economist at Arbejdernes Landsbank.

“It’s pleasing to see that the Danish economy has got moving so well,” Borre said.

“But the flip side of the coin is that more and more companies are reporting a lack of labour,” he stated.

The need for labour has become a politically discussed topic in recent weeks.

Earlier this week, the government presented proposals it claims will add to the number of workers on the market.

Those proposals include cutting the standard monthly unemployment insurance payment for new graduates as well as shortening the eligibility period.

The government argues this will encourage university graduates to take jobs sooner, including unskilled work outside their area of expertise, if necessary.

READ ALSO: What do Denmark’s proposed welfare reforms mean for foreign residents?

The overall welfare reform package will increase employment by 10,400 people by 2025, according to government expectations.

The Confederation of Danish Industry (Dansk Industri, DI) praised the government for looking for solutions to the problem but called for measures that tackle the lack of hands in the shorter term.

Businesses wanting to fill various positions are held back by limits on bringing in workers from abroad, DI has suggested.

The business interest organisation backs a reduction in Denmark’s pay limit scheme or beløbsgrænse, which sets a minimum wage which businesses must pay skilled non-EU nationals in order for the employee to qualify for a Danish work permit.

READ ALSO: Denmark’s proposal to recruit skilled foreign labour falls apart (2018)

“Businesses are really challenged by being unable to find the staff they need. That means they have to say no to orders, thereby denying Denmark economic growth,” DI vice director Steen Nielsen said.

“The government’s direction is good but it doesn’t solve the challenges we are facing here and now,” Nielsen added.

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WORKING IN DENMARK

Feriepenge: Denmark’s vacation pay rules explained

If you work for a company in Denmark, your yearly time off is likely to be provided for by the 'feriepenge' accrual system for paid annual leave.

If you work in Denmark, a good understanding of 'feriepenge' (holiday allowance) rules will help you plan time off in the summer and around the calendar.
If you work in Denmark, a good understanding of 'feriepenge' (holiday allowance) rules will help you plan time off in the summer and around the calendar. Photo by Felipe Correia on Unsplash

One of the perks of being a full-time employee in the country, Danish holiday usually adds up to five weeks of vacation annually. There are also nine days of public holidays, which everyone benefits from.

The Danish Holiday Act (Ferieloven) provides the basis for paid holiday through accrued feriepenge (‘vacation money’ or ‘vacation allowance’). This covers most salaried employees, although some people, such as independent consultants or freelancers, are not encompassed.

What is feriepenge?

‘Holiday money’ or feriepenge is a monthly contribution paid out of your salary into a special fund, depending on how much you earn.

You can claim back the money once per year, provided you actually take holiday from work. It is earned at the rate of 2.08 vacation days per month.

If you are employed in Denmark, you will be notified when the money can be paid out (this is in May under normal circumstances) and directed to the borger.dk website, from where you claim it back from national administrator Udbetaling Danmark.

Anyone who is an employee of a company registered in Denmark and who pays Danish taxes is likely to receive holiday pay, as this means you will be covered by the Danish Holiday Act (ferieloven). You are not an employee if, for example, you are self-employed, are a board member on the company for which you work or are unemployed.

How do I save up time off using feriepenge?

The law, which covers the five standard weeks or (normally 25 days) of paid vacation, states that you are entitled to take vacation during the vacation year period. You earn paid vacation throughout a calendar year at the rate of 2.08 days per month.

You earn vacation time in the period September 1st-August 31st. You can then use your vacation in the same year that you earn it and up to December 31st the subsequent year – in other words, over a 16-month period.

These rules also mean that holiday earned during a given month can be used from the very next month, in what is referred to as concurrent holiday (samtidighedsferie).

So when can I take time off using this accrued vacation?

The Danish vacation year is further broken down so that there is a “main holiday period” which starts on May 1st and ends on September 30th. During this time, you are entitled to take three weeks’ consecutive vacation out of your five weeks.

A lot of people take three weeks in a row while others break it up – which is why you often hear Danish people who work full time wishing each other a “good summer holiday” as if it’s the end of the school term.

Outside of the main holiday period, the remaining 10 days of vacation can be taken whenever you like. You can take up to five days together but may also use the days individually.

If your employer wants to decide when you should take any of your vacation days, they have to let you know at least three months in advance for main holiday, or one month in advance for remaining holiday (barring exceptional circumstances, such as an unforeseen change to the company’s operations or if the company closes for the summer shortly after you begin employment).

If you have not earned paid vacation, you still have the right to take unpaid holiday.

Public Holidays

In addition to the vacation days, there are also public holidays. These are bunched up mostly in the early part of the year and around Christmas. However, the period between June and Christmas includes the above-mentioned main annual leave, so there’s not usually long to wait until you can take time off.

Denmark has public holidays on:’

  • New Year’s Day  
  • Maundy Thursday
  • Good Friday
  • Easter Monday  
  • Great Prayer Day (Store Bededag)
  • Ascension Day
  • Whit Monday
  • Christmas Day
  • Boxing Day

In addition to the usual public holidays, companies can choose to give extra time off, for example on Christmas Eve or New Year’s Eve. There are also differences regarding Labour Day and Constitution Day, depending on where you work, what kind of work you do, or the collective bargaining agreement under which you are employed.

Sometimes you can get a whole day off for these extra holidays, sometimes just a half day. Check with your employer for details.

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