Swedish companies use crisis as pretext to shed poor performers
TT/David Landes · 28 May 2009, 15:55
Published: 28 May 2009 15:55 GMT+02:00
Roughly a third of managers interviewed for a labour market analysis carried out by the staffing company Proffice said they had used the financial crisis as a pretext to get rid of underperforming workers, the Dagens Nyheter (DN) newspaper reports.
Often companies give notice of impending layoffs for more employees than necessary based on purely economic reasons. The phenomenon is most common in medium sized companies with 26 to 49 employees where younger managers are more willing than more seasoned bosses to use the weak economy as an excuse for getting rid of employees not seen to be pulling their weight.
For the study, respondents were asked if they agreed that the financial crisis was being used as a reason to get rid of less effective employees at their own companies.
Of managers questioned for the study, 7.6 percent were in full agreement, 30.3 percent partially agreed, and 11.1 percent slightly agreed.
Meanwhile 45.1 percent said they disagreed with the statement and 6.0 percent did not respond at all.
Of those managers who had carried out layoffs themselves, 48 percent said they had eliminated more positions than was necessary.
“The numbers confirm what many thought but couldn’t prove,” Profice CEO Lars Kry told DN.
The Legal Bureau of the Swedish Trade Union Confederation (LO-TCO Rättsskydd) has also seen evidence to suggest that employers are culling their ranks during tough economic times, which has seen an increase in the number of labour disputes in recently.
“We’ve seen this in previous periods of low economic growth. What we don’t see are people who take advantage of exceptions or negotiate a list based on ‘last in-first out’. But redundancies based on personal reasons are increasingly common during tough economic times,” said union attorney Annett Olofsson to DN.
The redundancies can also take their toll workers who remain on the job, with 44 percent of managers who have carried out layoffs reporting they sense a palpable frustration among remaining employees.