Barriers to talent recruitment threaten tech sector

In recent decades, Sweden has transformed from a predominantly industrial nation to an increasingly knowledge-intensive service society. Industry is still a central part of the economy, but the service sector is growing steadily. The knowledge-intensive part of the sector alone currently employs almost 900 000 people. The service sector contributes research, development and other key services to both industry and the public sector and also accounts for a growing share of Swedish exports - over 40%.

Growth in business services is largely driven by climate change and digitalization, and jobs requiring engineering or IT skills are steadily increasing across Sweden. In Stockholm, programmers are already the single most common occupation.
At the same time as knowledge-intensive industries are growing, companies are having difficulty finding the right skills. According to the National Institute of Economic Research, seven out of ten computer consultants and technical consultancies have difficulty recruiting the skills they need. For those companies that cannot find the right skills in Sweden, recruitment from abroad is crucial if they are to develop and grow.

Seven out of ten computer and technical consultancies struggle to recruit the skills they need

Since 2008, Sweden has had a simple regulatory framework for labor immigration from outside the EU. People who are offered a job with wages and conditions in accordance with agreements or practices in the profession are given a work permit for two years with the possibility of extension. This system has served Sweden well. According to the OECD, the system has been an advantage for Sweden in the competition for international talent.

Migrant workers contribute key skills that in turn create more jobs in Sweden

Using data from the Swedish Migration Agency, we have mapped out the occupations to which labour immigration has taken place during the years 2010 to 2021. The survey shows that just over 140,000 people from third countries have received work permits in Sweden since 2010 - excluding seasonal workers. Of these, almost 60 000 people worked in IT and engineering. Two percent of all civil engineers and seven percent of all IT architects and system developers working in Sweden are migrant workers. They often contribute key skills that in turn create more jobs in Sweden, with most returning home after a few years.
Despite this, an increasing number of political parties want to severely restrict labor immigration. They argue that this would create more jobs for unemployed people in Sweden, especially newly arrived refugees, and combat fraud. Unfortunately, the proposals will create major problems for many industries.

Waiting times must be shortened, not lengthened

The most far-reaching proposal is the reintroduction of a labor market test. This will further lengthen the already long permit periods. The system whereby the Swedish Public Employment Service determined the need for foreign labour was abolished for good reason in 2008. Reintroducing it would radically reduce Sweden's attractiveness for highly skilled global talent.
Although IT and technology companies would likely pass a shortage occupation test by the Swedish Public Employment Service, additional bureaucracy risks delaying each individual work permit. Over the past year, waiting times have increased significantly at the Swedish Migration Agency, creating major problems for our industries. The fast track for highly skilled services no longer exists in practice. Instead of the promised ten-day processing time, a decision now takes around 50 days. Waiting times must be shortened, not lengthened.

More talent with fewer barriers

Another far-reaching proposal is a salary requirement of at least SEK 28,000 per month for work permits. This would lead to four out of ten existing work permits being withdrawn. Migrant workers are often at the beginning of their careers and thus have lower salaries. Sometimes they work part-time for various reasons. Requiring a monthly salary of SEK 28,000 to 30,000 for a work permit would mean that between 10% and 15% of work permits for IT technicians, systems scientists and engineers would be at risk of being withdrawn. In other shortage occupations, labor migration would stop altogether.
Unfortunately, it is a reality that some rogue companies cheat on work permits. But this should be combated through tougher controls, not through sweeping measures that affect those who offer good jobs with good conditions. If Sweden is to retain its leading position in IT and technology, our companies must continue to be able to recruit the necessary talent where it exists.

Åsa Zetterberg, Director of TechSverige
Anders Persson, Acting Director of Innovationsföretagen
Patrick Joyce, Chief Economist, Almega

The debate article was published by Uppsala Nya Tidning 2022-08-20.