Executive Search in Denmark – 2019 Outlook
Strong Economy Presents Recruiting Challenge
The Danish economy is very strong. The unemployment rate dropped to 3.9 %, which is close to full employment. This figure, however, covers a structural unemployment within different industries and geographical areas and increased recruitment from other EU countries.
Companies are reporting increased problems in recruiting due to acute shortage of qualified staff both in Denmark and the EU. The consequences have been production limitations, refusal of orders etc.
GDP growth has in recent years gradually increased to about 2%, with the exception in 2018, where the growth was limited to 1%. The growth in 2019 expected to return to 2%. The growth is partly because of private households and partly because of a substantial contribution from export.
The prerequisite for continued growth is access to skilled staff, which presupposes reforms to increase the available labor. However, increased pressure on production capacity and increased difficulties in attracting qualified staff is expected to put limitations on growth.
Hard Brexit threatens growth
Denmark is a very open economy, very dependent on exports, primarily within the EU (61%). Major countries involved are the UK (8.1%), Germany (15%) and Sweden (12%). The USA is at 7.8%. Because Great Britain is the fourth largest export market for Denmark, a hard Brexit is one of the major threats to the expected GDP growth.
About 60,000 jobs are supposed to be affected by a hard Brexit. The IMF expects that Denmark is one of the countries which is affected most when Great Britain leaves EU. The increased threat towards international trade is another threat to the Danish GDP growth and we see an increased trend towards nations focusing still more on themselves (Trump, USA, and the initiated trade war with China).
We have a national election coming up before summer. Very difficult to predict whether we shall have another government (social democratic) or if we continue with the existing (liberal). However, as both sides will be very much against immigration of any kind, the job market will probably not be more liberal and open.
Threats about an election for a Daxit has been an issue, but we do not expect anything like that in the foreseen future.
The scandal in the finance sector about money laundering has led to a situation where not much is happening there within recruitment. In some institutions, recruitment has even come to a temporary hiring freeze.
As a result, even if the demand for staff has been, and still is, increasing, we expect an overall slight reduction in demand for our recruitment and headhunting services in 2019 compared to 2018. A hard Brexit in March may even push this to a further reduction.