Reducing working hours is the wrong approach – for jobs, individuals, and Sweden's competitiveness
The debate on reducing working hours has gained momentum once again. For TechSweden and our member companies, it is important to be clear: reducing working hours is the wrong path for Sweden, and particularly problematic for a knowledge-intensive, internationally competitive tech industry.
The tech industry is already one of Sweden's most attractive employers. Secure jobs, low sick leave, and great flexibility with influence over one's own work situation are everyday occurrences in many companies. The balance between work and leisure time is often resolved through locally adapted agreements.
At the same time, there is a pronounced shortage of tech skills, which is preventing companies from growing and hiring more people in Sweden. Tech companies across the country report difficulties in finding the right skills, while demand for digital solutions continues to increase.
"When the skills shortage is already as severe as it is today, reducing working hours is directly counterproductive," says Einar Humlin, chief negotiator at TechSverige.
A general reduction in working hours would have significant consequences for employees and employers at many IT, telecom, and tech companies.
"The tech industry is based on innovation, development, and customer solutions, where every hour creates value and many companies depend on billable hours. Shorter working hours mean higher costs while revenues decline, which directly impacts profitability, investments, and ultimately jobs and competitiveness," says Einar Humlin.
The consequences do not stop within companies:
"When costs increase without productivity doing so, there are really only two options: cut back or pass on the cost increases in higher prices. This means that the consequences do not stop with tech companies, but ultimately affect customers, the public sector, and individual citizens through more expensive services and less room for development," continues Einar Humlin.
The tech industry also operates in a global market where capital, expertise, and assignments are mobile. There is always a risk that investments and operations will move abroad.
The tech industry accounts for a significant share of Sweden's GDP and is a key driver of growth, innovation, and productivity development. When investment declines or moves to other countries, it affects not only individual companies but the entire economy. Ultimately, this affects jobs, wage growth, and tax revenues, and thus the resources available for education, healthcare, social services, and infrastructure. Ultimately, it is a question of Sweden's long-term prosperity and security in everyday life, says Einar Humlin.
Sweden already has one of the shortest annual working hours in the OECD. Despite this, the issue of reducing working hours has once again risen to the top of the political agenda. Estimates show that reducing working hours from 40 to 35 hours per week could, in the long term, reduce GDP by more than SEK 500 billion per year, corresponding to just over 8 percent of GDP.
"When the world around us is characterized by geopolitical and economic uncertainty, Sweden needs to strengthen its resilience. We do this through work, productivity, and growth. If working hours are reduced without an increase in productivity, value creation in the economy will decline. This affects society's ability to finance welfare, pensions, defense, and necessary investments in the future, says Einar Humlin.
The consequences directly affect individuals. When companies' costs increase, there is less scope for salary increases, skills development, and new hires. In the long term, this affects both career opportunities and pension levels.
He believes that the proposal to reduce working hours is heading in completely the wrong direction in an already difficult situation.
In a time of rapid technological development, fierce global competition, and a significant skills shortage, it is not the right time to make it more difficult to run and develop businesses in Sweden. The focus must be on strengthening productivity, investment, and Sweden's attractiveness as a technation. A general reduction in working hours risks having the opposite effect and will be costly for us.