by Laura Inlow, lminlo15@smumn.edu


Check back at the end of Weeks 2 and 4 (OL 635, Summer Term 1, 2016) for an overview and analysis of news regarding Swedish business culture.

Update #2 | May 30, 2016

Making Advances in a Better Work-Life Balance


By Magnus Laupa, The New York Times
By Magnus Laupa, The New York Times

There is an experiment going on in Sweden to see if shorter workdays with no pay cut can improve the well being of employees and companies mutually (Alderman, 2016).

According to Alderman (2016), Sweden often serves as a breeding ground for initiatives looking to strike a better work-life balance for professionals.

The experiment mandates 30-hour workweeks instead of 40. Some companies have been putting this into practice for years. Results so far have yielded lower rates of absences, better health and more productivity rather than less (Alderman, 2016), but not everyone is a fan.

Larger corporations especially have been slower to embrace it. In Kiruna, northern Sweden, the measure was scrapped after 16 years, citing high expenses (Alderman, 2016).

City of Gothenberg Mayor Maria Rydén says in the long run, the initiative could hurt the economy, based on unfavorable results in France. There, a 35-hour workweek became mandatory in 2000, resulting in reduced competitiveness and billions in cost to companies (Alderman, 2016). However, the measure is thought to be riddled with loopholes.

Supporters include small start up companies, large hospitals and even a service garage.

Maria Brath, of an Internet SEO startup in Stockholm, says the company has enjoyed a doubling in profits and its employees work more efficiently (Alderman, 2016).

At Gothenburg’s Sahlgrenska University Hospital, the measure was introduced to reduce burnout. Initially, the hospital had to hire 15 new employees to cover shifts, but currently reports that almost no one calls in sick anymore, and everyone works more efficiently (Alderman, 2016). Executive Director Anders Hylander says that the hospital's surgery unit is now performing 20 percent more operations with surgery wait times cut drastically (Alderman, 2016).

Martin Banck, service center director at a Toyota vehicles center, says they changed to the six hour workday 13 years ago. He now reports that work gets done faster than ever before (Alderman, 2016).

The idea is that employees have more time at home to take care of their personal business and spend time with their families and unwind. When they are at work, they have more energy and enthusiasm to give to the job. Mixed results seem to say that the measure is promising, but corporate culture will ultimately influence whether or not it can work at any given employer. Check out my personal reflections page for more thoughts on this measure.

References

Alderman, L. (May 20, 2016). In Sweden, an experiment turns shorter workdays into bigger gains. Retrieved from
http://www.nytimes.com/2016/05/21/business/international/in-sweden-an-experiment-turns-shorter-workdays-into-bigger-gains.html


Update #1 | May 15, 2016

Housing Crisis in Stockholm Making it Hard for Businesses to Recruit Talent


Image from Getty Images
Image from Getty Images

In early-to-mid April, news circulated that a current housing crisis in Sweden's capital city of Stockholm threatened the ability of the country's startups and other businesses to grow and thrive.

Founders of the music streaming company Spotify, Daniel Ek and Martin Lorentzon, were some of the first to speak out in an open letter to Sweden's politicians—a call for major change. Among their complaints—high taxes, issues with the educational system, and foremost, a congested housing market (Verbergt and Duxbury, 2016).

Europe, although home to many tech companies, has never produced a tech giant to compete with the likes of Facebook, Apple and Google (Verbergt and Duxbury, 2016). Spotify, founded in 2006, competes with products like Apple Music and Google Music, but the growing company may be forced to leave if change doesn't happen soon (Verbergt and Duxbury, 2016).

Other companies, like Germany's Cuponation, have recently considered moving to Stockholm and then reconsidered after learning the ins and outs of the housing crisis (Edwards, 2016), which include strict housing regulations and a lack of affordable options. Sweden’s Minister for Enterprise Mikael Damberg said these issues are Sweden’s biggest growth problem today (Verbergt and Duxbury, 2016). For startups and other companies, they present issues when trying to attract the talent that can help these companies hit it big.

Currently, Sweden’s economy is set to grow by 3.9 percent in 2016 (Savage, 2016), but a paper by the Confederation for Swedish Enterprise (Svenskt Näringsliv) reported that “61 percent of companies have experienced recruitment problems over the last year, with employers citing the housing shortage in 31 percent of cases” (Savage, 2016).

Stockholm has a queuing system–a regulated market–to determine who gets housing. The Stockholm Housing Agency allows people to register as housing applicants, then look for housing and post notices of interest for those places. Unlike other European countries that reserve public housing for those on lower incomes (The Local, 2016), anyone can register. Those who make it to the top of the list are given “first hand” contracts, while others rent “second hand” in Sweden’s big cities (The Local, 2016).

Knowledge of the crisis is only making the queue longer, as people join the queue wile not actively looking for housing "just in case," according to Jenny Burman, press officer for Stockholm’s housing service (The Local, 2016).

High prices coupled with high demand mean that more and more people are renting "second hand" and poorer people are being forced to squeeze more tenants into tinier spaces (Edwards, 2016). Price-tracking company Svensk Maklarstatistik AB said apartment prices in central Stockholm rose 17% in 2015 and 10% in 2014 (Verbergt and Duxbury, 2016).

One of the issues is that there’s no market for new construction because rents aren’t set by the free market (Edwards, 2016).

However, according to Verbergt and Duxbury (2016), the Swedish government does plan to provide the equivalent of $394.4 million for the construction of more apartments and housing each year through 2020 to address the crisis.

Svenskt Näringsliv's Acting Chief Economist Jonas Frycklund said this kind of structural problem could really hold back the economy (Savage, 2016). Other economists worry that the "housing bubble" could burst, which could have a devastating effect on the country's economy (Edwards, 2016).

On the back of the open letter from Spotify, startup entrepreneurs staged a protest on May 11 to raise awareness of the issue (The Local, 2016). Fewer than 100 people attended the protest, considerably less than the 1,200 who joined the protest’s Facebook event, but in line with Sweden's non-confrontational culture. The event nevertheless got the attention of the news media, and time will tell of its affects.

References

Edwards, J. (January 14, 2016). The housing bubble in Sweden is so severe there is a shortage of toilets. Retrieved from http://www.businessinsider.com/sweden-house-prices-bubble-2016-1?r=UK&IR=T

Savage, M. (May 10, 2016). Housing shortage ‘could hold back growth’ for Sweden. Retrieved from http://www.thelocal.se/20160510/housing-shortage-holding-back-growth-for-sweden

The Local. (May 11, 2016). Startups: ‘Housing is a hurdle if you’re coming to Stockholm.” Retrieved from http://www.thelocal.se/20160511/startups-to-shower-stockholm-with-love-at-housing-protest.

The Local. (January 30, 2016). Housing queue now ’20 years’ in parts of capital.” Retrieved from http://www.thelocal.se/20150130/insecure-apartment-seekers-on-the-rise

Verbergt, M. and Duxbury, C. (April 12, 2016). Spotify founders blast Sweden’s business environment in open letter. Retrieved from http://www.wsj.com/articles/spotify-founders-blast-swedens-business-environment-in-open-letter-14604796