Core Characteristics Of Swedish Human Resources Commerce Essay

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Since Sweden experienced industrialization, which occurred late but rapid, the country is characterized by a well organized trade union movement and powerful employer organizations. The welfare state and employment system shows a high degree of social protection which is grounded in universal coverage and solidarity, a considerably public sector, comparatively low unemployment rate as well as a labour market regulation mainly resting upon collective agreements (Eurofound, 2010).

When looking at the core characteristics of the employment relation system one has to consider the legal context. In this context three laws will be discussed in the following. The Codetermination Act (Metbestämmandelagen, MBL) regulates employee consultation and participation in working life. The MBL is the main law for the system of collective regulations, which is realized through collective agreements. Acting like collective agents for its members, trade unions are empowered to elect their representatives, obtain information, or ask for advice about management decisions (Eurofound, 2010). The Employment Protection Act (Lag om Anställningsskydd, LAS) is an essential law in the Swedish labour market which sets and determines how and when employees can and cannot be dismissed. The Work Environment Act regulates the work environment in the labour market. The Swedish Work Environment Authority (Arbetsmiljöverket) is concerned with monitoring the implementation of both the Work Environment Act and the Working Time Act. The authority conducts labour inspection; still it has been recently decreased by about 40 per cent (Eurofound, 2010).

Concerning strikes one can say that the number in Sweden is very low and their range is limited compared to other European countries. The National Mediation Office (Medlinginstitutet MI) was established in 2000 and takes action if conflicts or strikes occur. It is an agency which deals with central government activities in the mediation field. MI mediates in cases of labour disputes with the goal to promote an efficient process in wage formation (Eurofound, 2010). Also, it is in charge of public statistics concerning wages and salaries. During the last years, there have not been many strikes in Sweden which can be ascribed to the role and work of the National Mediation Office. If the social partners need help they ask for it themselves, consequently, forced interventions in mediations are not required (Eurofound, 2010).

Since the 1930s there are discussions going on whether the "Swedish model" exists or not. Originally the model was in place with regard to developments in the Swedish labour market. The "Swedish model" is characterized by unions' and workers' avoidance of labour debates and state-intervention. In 1938, the Saltsjöbaden Agreement created a labour- employers bargaining system which worked for many years. The trade union movement and its management counterparts were well-known for their sense of responsibility and discipline (Rönnmar, n.n.). The term "Swedish model" was associated with the system of centralised wage bargaining at the national level. Later the term was referred to Sweden's domestic stability in particular and social welfare system. In contrast to most other developed countries, after Second World War, Sweden focused on two goals of economic and social policy: economic security, incorporating full employment, and egalitarianism, including income equality and the ease of poverty (Brewster, Mayrhofer, Morley, 2004). Consequently the "Swedish model" of employment relations characterizes a successful balance of power among work and capital. Also, the "Swedish model" shows particular elements of cooperation between the social partners and the state, sharing social responsibility (Rönnmar, n.n.).

After having mentioned the characteristics of the "Swedish model", important challenges and changes within the "Swedish model" can be reported since its beginning in the 1970s. Since a few years, there has been slow economic growth as well as a strong economic recession which has weakened the welfare system (Rönnmar, n.n.). Also in the last years, per-capita income has decreased which is today even lower than the average for the EU. Within 60 years, unemployment has reached its highest level. With 5.7 per cent it is, of course, quite low compared to other European countries (Brunk, 2009). Thus the traditional welfare system and consequently the "Swedish model" is criticised and seriously questioned more than ever before (Rönnmar; n.n.; Brewster, Mayrhofer, Morley, 2004).

Collective Bargaining

Collective bargaining and collective agreements have always played a vital role in the self regulation of the Swedish labour market, and traditionally made up the most important legal source in the area of labour law. Thus three-part negotiations are not common because the social partners do not want the government or any other party to intervene in collective bargaining (Eurofound, 2010).

There are various other topics which are covered by collective bargaining such as work-life balance, flexible working hours, telework, long-distance working with the purpose to increase flexibility of workers, continuous vocational training (CVT), gender equality, working time etc. (Eurofound, 2010).

In Sweden, collective bargaining has been very centralized and the collective bargaining coverage almost completes (Eurofound, 2010). However, during the last 15 years, the collective bargaining structure in Sweden has shown a shift towards decentralisation. The social partners lean towards assigning the power to negotiate wages and working time to the local level. In some cases collective agreements deciding on wage formation and wage rate settings are concluded by local parties (Eurofound, 2010). Still employer and trade unions confederations decide upon certain types of cross-country agreements as for instance pensions and collective insurance (Eurofound, 2010). Not least due to the financial crisis, the employment transition agreement has become more important. It implies that a certain percentage of the total salary goes into a fund which finances measures which supports redundant workers getting a new job or education. This agreement is called the Employment Security Council (Trygghetsradet, TRR). In case of redundancy or dismissal, TRR enables to offer both employers and trade union representatives' support and advice. In the public sector similar agreements are applied, stated in the Employment Security Fund (Trygghetsfonden), (Eurofound, 2010).

The room for bargaining for local parties was limited up until 1975. The central negotiation model was abolished in the 1980s, which means that social partners started to negotiate at sectoral level. Then, in 1997, the negotiation model has changed again due to an increase of the amount of coordination in negotiations. One key element was that negotiations in the manufacturing sector became normative as well as the dominant level for other sectors of economic activity (Eurofound, 2010). Today, the coverage rate of collective bargaining is 100 per cent present within the public sector and 72 per cent within the private sector (Eurofound, 2010).

In Sweden, two different levels of collective bargaining have to be distinguished which cover issues such as relation to pay, wage formation and other working conditions: national or sectoral level and local (company) level. Still both levels have a supplementary relation due to industry-wide agreements which contribute room for company agreements on differentiation and individualization of pay (Eurofound, 2010). By this, some parts of the centrally agreed pay increase are allocated at local level appropriate to the preferences of local actors (Eurofound, 2010). In Sweden, collective bargaining is the unique system of wage formation, in the private sector as well as in the public sector. In negotiation with the social partners on the employer side, trade unions at sectoral level deal majorly with pay bargaining. In some cases, employees have some sort of wage flexibility, as for instance based on working performance (Eurofound, 2010).

During the 1980s and 1990s the union membership rates, in particular in the public sector, were relatively stable and high. The Swedish trade union movement is centralized and composed of nation-wide industrial unions. Whereas trade union density indicates the potential bargaining strength as well as the bond between employees, bargaining coverage is an indicator of the intensity to which employees profit from union-negotiated terms and conditions of employment (OECD, 2004). Roughly 79 per cent of blue-collar workers and 78 per cent of white collar workers and professionals are union members. On the employer's side the organization rate is equally high. One reason is the unemployment benefit system which is administered by unions. Still since the early 1990s the union membership rates have been decreasing. This trend is described more detailed in Part .

In Sweden, there are three main trade union associations which are assorted according to occupation and stated in the following: The Swedish Trade Union Confederation (Landesorganisationen i Sverige, LO) consists of 1.28 million members (blue-collar workers, skilled as well as unskilled; often incorporating clerical employees and lower grade public servants). The Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO) consists of 950,000 members (mainly white-collar workers). The Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO) consists of professional unions organising 460,000 civil servants and professional employees who generally possess an academic degree (Eurofound, 2010).

In the following the development and trends of trade unions will be stated. LO and to some degree TCO rests upon the "industrial principle" which means that trade unions are rather constituted according to the economic sector in which employees perform than according to the employees' occupations. Whilst LO and TCO report a fall in membership numbers, SACO records a slight increase in membership numbers (Eurofound, 2010).

LO incorporates a total of sixteen unions with a membership of more than two million people, involving retired members. This means that LO covers roughly 90 per cent of blue-collar employees, reflecting a very high density by international standards (Eurofound, 2010). The majority of the unions which belong to LO are organised on an industrial basis, with one union at each company or site (Bamber, Lansbury, Wailes, 2005). The largest unions within LO are the Swedish Municipal Workers' Union- Kommunal, consisting of 610,000 members; and the Swedish Union of Metalworkers- IF Metall, consisting 420,000 members (Bamber, Lansbury, Wailes, 2005). The ladder one has arisen from the merger of two unions: the Swedish Metalworkers' Union-Svenska Metallarbetareförbundet and the Swedish Industrial Labour Union-Industrifacket (Eurofound, 2010). LO acts for the unions in two fields: economic and social policy. Until lately, the LO also bargained collectively by order of all members in the private sector. Still, the two major unions bargain directly in the public sector, lacking the direct involvement of the LO (Bamber, Lansbury, Wailes, 2005). TCO incorporates eighteen unions with a membership of around 1.2 million. TCO is not involved in collective bargaining, but in training and represents its unions together with the government on general economic and social policies (Bamber, Lansbury, Wailes, 2005). A trade union within TCO is the Union of White-Collar Workers-Unionen which incorporates 491,000 members. It is the largest union for white-collar workers and has arisen from the merger of two unions in 2008: The Union of White-Collar Workers in Industry (Svenska Industritjänstemannaförbundet, SIF); and the Salaried Employees' Union (Tjänstemannaförbundet, HTF), (Eurofound, 2010).

One trade union within SACO is the Swedish Association of Graduate Engineers-Sveriges Ingenjörer, which consists of 120,000 members. It has arisen from the merger of two unions in 2007: The Association of Undergraduate Engineers-Ingenjörsförbundet; and the Swedish Association of Graduate Engineers-Sveriges Civilingenjörsförbund (Eurofound, 2010).

In Sweden there are three main employer organizations. The Confederation of Swedish Enterprise (Svenskt Näringsliv SN) has arisen from the merger of two organizations in 2001: The Swedish Employers' Confederation (SAF) and the Confederation of Swedish Industry. It is the largest employer organization; it represents small, medium and large- sized enterprises with a total of 1.7 million employees in the private sector. It consists of about 50 employer organizations from different industries. In 2008 its density rate was at about 80 %, exceeding the trade union density in the private sector. The second employer organization, the Swedish Association of Local Authorities represents the governmental, professional and employer-related interests of Sweden's 290 municipalities (Bamber, Lansbury, Wailes, 2005). The third employer organization is the Swedish Agency for Government Employers (Arbetsgivarverket SAV) which represents the national government authorities. It is a state agency which is responsible for the employer policy of agencies in the public sector at national level and negotiates in the interest of about 270 public authorities (Eurofound, 2010).

Besides the above mentioned three main employer organizations, one should mention two smaller organizations which do not have the mandate to negotiate collective agreements: The Swedish Association of Entrepreneurs-Företagarförbundet which consists of 35,000 members and mainly incorporates small companies. The Federation of Private Enterprises-Företagarna consists of 55,000 members (Eurofound, 2010).

In Sweden, a main agreement, Saltsjöbadsavtalet, between the parties at national level sets the framework of their roles and regulations between them. It is the base for the cooperation between the social partners in the Swedish labour market model. At sectoral level, general agreements with guarantee or minimum levels are negotiated for salary and working time. Those agreements are the foundation for negotiations at local level (Eurofound, 2010).

Major Trends

As already mentioned in Part , in Sweden there are several trends which can be observed. Some of them are issues such as work-life balance, flexible working hours, telework, long-distance working, continuous vocational training (CVT) with the objective to adjust the worker's competencies to the needs of the labour market, gender equality, working time and so on. In the following a few trends will be discussed more detailed.


In Sweden a trend towards decentralisation can be reported. Its collective bargaining system has shifted to be more decentralized during the last 15 years. As already said before, bargaining takes place at company, sectoral and central level. However there is a shift from central bargaining to sectoral bargaining (Traxler, n.n.). The social partners show the tendency to transfer the power of wage and working time negotiations to the sectoral level. It is often the task of the local parties to set the details of their negotiations on wage formation and wage rate settings. This is ascribed to some collective agreements which are concluded without definite figures on pay of only specifying guarantee levels (Eurofound, 2010). The employer and trade union confederations still decide particular types of cross-country agreements as for example pensions and collective insurance. Not only due to the financial crisis, has the employment transition agreement become of high importance. By this agreement a certain amount of the wage sum is paid into a fund, called the Employment Security Council (Trygghetsradet, TRR), which is already mentioned beforehand (Eurofound, 2010).

Decrease of Trade Union Membership

The majority of Swedish workers regard it as sensible to belong to a union in order to be protected against possible unemployment (Bamber, Lansbury, Wailes, 2005). Still, as can be seen in and , the membership rates have been decreasing since the mid 1990s. Between 2004 and 2008, trade union density has declined by eight per cent which is broadly based and equally distributed among white-collar and blue-collar workers, men and women. The construction sector, in particular, has to note the largest decline of trade union members, from about 82 per cent in 2006 to 74 per cent in 2007 (Brunk, 2010). One particular problem is that young employees commonly depreciate to become members of trade unions; therefore there is a very low trade union density among this group. (Bamber, Lansbury, Wailes, 2005). According to Kjellberg (2008) a main reason for the general decrease in trade union density can be found in change of law which incorporates increasing fees to the unemployment funds in January 2007; as well as increasing membership fees. It is stated that people might relate membership fees to the benefits one will make use of when being a member (Eurofound, 2010).

As already said before, between 1996 and 2006, especially among young people (16-24 years), the trade union density has declined from roughly 70 per cent to 50 per cent. There are several reasons which have to be taken into consideration. In Sweden, more people are employed in the industry sector (former trade union density: 90 per cent) compared to the service sector (former trade union density: 70 per cent). There are a growing proportion of people working in the service sector. While substantial declines do not have such a strong impact on other groups, they seem to have a strong effect on younger people. The main reason for the decline among the above mentioned group is the shift in the type of employment; from permanent positions through to different types of temporary occupations. That means that the rate of people occupying temporary jobs is increasing. Also there might be a change in attitudes among younger people which means that they simply might not be interested in such a membership (Kjellberg, 2008).

Figure : Trade unions membership and density rates, 1990-2007

(Source: Derived from Kjellberg, 2008; National Institute for Working Life, 2000; Statistics Sweden)

Figure : Union Membership and Density in Sweden

Source: Pedersini (2010)

In order to act contrary to this trend several actions could be undertaken. As a response to the decline various trade unions have implemented strategies such as direct campaigns and contacts with workers at workplaces, widespread public communication, information- and web campaigns in order to attract especially young people to become a union member (Brunk, 2010). These include new steps as for example the launch of websites as well as the implementation of services addressed to young people. An example might be the introduction of substantially reduced subscription fees for students. Also traditional methods such as contacting worker at workplaces are followed and realized (Brunk, 2010). In order to counteract to the decline in union membership, the following trade unions have introduced initiatives:

In the following, the decline of union membership as well as the reaction of unions towards that trend will be discussed more detailed. In 2007, the Swedish Trade Union Confederation LO had to record a decline in membership of about seven per cent (130,000 members). As already stated before, also LO has recognized that there is a problem in recruiting younger people as well as people with temporary occupations. Thus LO undertakes several actions in order to counteract against the trend. The objective of its initiatives is to get all its incorporating trade unions to focus on recruiting new members by pointing out the importance of a high trade union density within society and to promote employees' rights (Brunk, 2010). The union which incorporates all trade unions that are members of LO is the key trade union with the largest drop in membership. Its campaign on "higher union membership" (Högre organisationsgrad) has originally been a general campaign, however, LO focused on young people, the capital city Stockholm as well as service and commercial companies. Activities of the campaign were to build a direct contact with young people at schools, internet-based information, phone services as well as assistance with longer working hours (Pedersini, 2010).

The Swedish Confederation of Professional Employees TCO also has to record a decrease in memberships because younger people decide not to be a member of TCO and its member unions. As opposed to LO, the objective of TCO is to reform TCO and its members. That means that the goal is rather to create a new image of TCO and its members as well as to point out the importance of collective representation. TCO and its affiliated organisations have implemented an initiative "Transform the trade union now" which has also attracted great media attention. This campaign focuses on younger professionals between 20 and 35 years as well as temporary workers. TCO has also launched a nation-wide advertising campaign as well as a special website www.facketförä The purpose of the website is used as a forum where one can discuss the role of trade unions and the expectations towards them. In addition, temporary workers were addressed within specific actions (Pedersini, 2010).

Since the reform of the unemployment benefit fund, Handels has lost a lot of members, a majority of them also being younger people. The union wants to establish new activities in order to attract new members (Brunk, 2010). Another initiative "Commercial Employees' Union's drive in large cities" was introduced by Handels which also focused on younger workers in three cities Stockholm, Gothenburg and Malmö (Brunk, 2010). This initiative includes the launch of a website to give information and advice as well as a forum to discuss issues which are important at work. Also, the campaign incorporated radio advertisements and granted two- month free membership for new members (Pedersini, 2010).

In order to react to the decreasing numbers on could also try to attract workers with contractual arrangements as for example part-time workers, temporary agency workers, self-employed people and freelancers. As stated by several trade unions, it is challenging to recruit those kinds of people; still they try to attract them to become a member (Brunk, 2010).

Modification of Work-Time Schedules

The European Framework Agreement on part-time work defines "part-time worker" as "an employee whose normal hours of work, calculated on a weekly basis or on average over a period of employment of up to one year, are less than the normal hours of work of a comparable full-time worker" (Corall, Isusi, 2007). According to the ILO, Convention No.175 a "part-time worker" is "any employed person whose normal hours of work are less than those of comparable full-time workers" (Corall, Isusi, 2007). In Sweden, a rising modification of work-time schedules can be reported. The most apparent indicator is the increase in the rate of part-time work compared to full-time work due to several reasons such as stronger international competition, innovative production methods and forms of organizations, increasing unemployment, increasing female participation rates and so on (Corall, Isusi, 2007). Part-time work might incorporate various modes of employment as for example job-sharing, combining work with training (such as apprenticeships), and semi-retirement (Vielle and Walthery, 2003). With a proportion of 22 per cent, Sweden is ranked in the middle (in comparison to other European countries). As can be seen in much more women are employed part- time (MPT=up to 19 hours per week; SPT= 20 to 34 hours per week). Still in Sweden the lowest differences between male and female part-time workers can be found (Corral, Isusi, n.n.). The majority of female part-time workers are in substantial part-time jobs; some of them have similar working times to full-time workers. In Sweden in particular labour law enforces equal treatment between full-time and part-time workers in order to prevent to use part-time workers as cheap work source. Thereby it is avoided that part-time employee' working hours or salary do not fall below a certain line which expels them from coverage under certain laws (Kalleberg, 2000).

Figure : Proportion of FT, SPT, and MPT (in %)

(Source: Derived from Corral, Isusi, n.n.; European Foundation for the Improvement of Living and Working Conditions)


In the following the development of telework will be looked at (Andersson, 2007). Teleworkers can be understood as "the employees who need to work outside the company premises for half a day a week while having access to the company's IT (information technology) system" (Andersson, 2007). Even before the European Framework Agreement on telework was signed in 2001, in Sweden such an agreement was already existent in the public sector both at municipal as well as regional level (Welz, Wolf, 2010). Due to fast development of telecommunication tools as well as the fact that more and more employees tend to have computer access at home, telework has been increasing as a kind of employment since the 1960s. Especially in economic sectors as for example communications, financial intermediation and services teleworkers are present. By 2005, around 230,000 teleworkers were present in Sweden (Andersson, 2007). According to findings of the EWCS (2005) in Sweden 9.4 per cent of all employees are "involved in telework at least "a quarter of the time" or more. 0.4 per cent is involved in telework "almost all of the time" (Welz, Wolf, 2010). In Sweden there is an above-average rate of telework. Concerning telework there is an overall trend which indicates that employment relationships involving "part-time" telework are on average four times more common than "full-time" telework. This indicates that telework is used in order to make employment relationships more flexible, while at the same time avoiding possible difficulties that arise when employees are constantly separated from the working environment at the employer's premises (Welz, Wolf, 2010).


To conclude one can say that the so called "Swedish model" is characterised by changes. The collective bargaining system shows a shift towards decentralization; away from central bargaining through to sectoral bargaining. Also, the trade unions have to deal with a decline in memberships. Thus, one tries to regain members by several activities. Also certain trends can be stated such as decentralization of collective bargaining, a decline in trade union membership, as well as an increase in part-time work which might continue to grow in the future.


List of literature

Andersson, P. (2007). Telework in Sweden. European Industrial Relations Observatory On-line. Retrieved from Access: 2.6.2010

Bamber, G. J, & Lansbury, R. D., & Wailes, N. (2005). International and Comparative Employment Relations- Globalisation and the Developed Market Economies. London: SAGE Publications, 4th edition

Brewster, C. & Mayrhofer, W., & Morley, M. (2004). Human Resource Management in Europe. Evidence of Convergence? Oxford: Elsevier Butterworth Heinemann

Brunk, T. (2010). Trade Union Strategies to Recruit New Groups of Workers. European Industrial Relations Observatory On-line. Retrieved from Access: 4.6.2010

Brunk, T. (2009). Unemployment High Among Young People in Sweden. European Industrial Relations Observatory On-line. Retrieved from Access: 27.5.2010

Corral, A; & Isusi, I (2007). Part-time Work in Europe. European Foundation for the Improvement of Living and Working Conditions, Dublin, pp.1-20

Eurofound (2010). Sweden: Industrial Relations Profile. European Industrial Relations Observatory On-line. Retrieved from Access: 3.6.2010

Kalleberg, A. L. (2000). Nonstandard Employment Relations: Part-Time Temporary and Contract Work. Annu. Rev. Socio. Retrieved from

Kjellberg (2008). National Institute of Working Life, 2000; Statistics Sweden

OECD (2004). Employment Outlook. p. 145, derived from: Lecture Slides Prof. Dr. Zagelmeyer

Pedersini, R. (2010). Trade Union Strategies to Recruit New Groups of Workers. European Industrial Relations Observatory On-line. Retrieved from Access: 2.6.2010

Rönnmar, M. (n.n.) Access: 2.6.2010

Traxler, F. (n.n). Collective Bargaining: Levels and Coverage. University of Vienna

Vielle, P; Walthery P (2003). Flexibility and Social Protection. European Foundation for the Improvement of Living and Working Conditions, Dublin, Access: 21.4.2010

Welz, C.; & Wolf F. (2010). Telework in the European Union. European Industrial Relations Observatory On-line. Retrieved from Access: 2.6.2010