Hiring foreigners 'good for business': study

Employing foreign workers can mean a boost for businesses in terms of increased trade and competitiveness, a Swedish study has found.

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According to the report, published on Tuesday in the Swedish journal Ekonomisk Debatt, a typical Swedish manufacturing company can increase export sales by over 2 million kronor ($300,000) by hiring a foreign-born worker.

The study, which is based on on data from 7,000 Swedish manufacturing companies from over a ten-year period, also found that hiring a foreign-born worker can increase imports by 12 percent.

“Our study indicated that employing people from outside of Sweden can help overcome barriers to trade with countries where that migrant comes from,” said researcher Magnus Lodefalk of Örebro University to The Local.

Just one extra percentage point of diversity in the work place equates to 9 percent higher export sales, the study shows.

“As a result, the foreign worker brings more information for the firm in terms of how to do business with that person’s home country, the culture… having more foreign-born workers basically leads to more knowledge.”

Furthermore, Lodefalk explains that the 'migrant' workers provide firms with a larger network within which to trade, as the hiring of a foreign worker opens the doors to connections with relatives, friends, and former school mates in their home country.

“It becomes a valuable way to monitor new markets,” Lodefalk explains.

The results of the study could even be used to fight what Lodefalk refers to as potential discrimination in the workforce.

“If you look at foreign-born people in Sweden versus native Swedes, there can be cases of discrimination in the workplace. There is historically a problem of matching work with the level of education," he said.

In terms of whether the results can be used more widely outside the area of manufacturing, Lodefalk explains that the team was researching uncharted territory and that it would be hard to see where things will go from here.

“We were the first to publish a study on this topic at the level of a firm – it’s deeper and more serious than other similar studies. Now, we can look deeper into our findings and analyze what the results may mean in a broader context,” he told The Local.

Oliver Gee
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