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Understanding the flexible Danish labour market

The Danish labour market is characterised by flexibility, a well-educated workforce and high productivity coupled with competitive salary levels in a European context.

In Denmark, you will experience a flat organisational hierarchy and employees who are active in shaping their roles and tasks. In addition, it is easy to scale your business up or down according to strategic priorities and commercial needs.  

The flexibility in adapting your business is unique to the Danish labour market model, where you combine the flexibility of hiring and firing with a safety net for employees. This enables businesses to pursue opportunities and ensures the right talent is there to deliver, while mitigating risk for both parties.

Key features of the Danish labour market:

  • Very flexible labour market in terms of hiring and firing
  • Competitive level of labour costs
  • Highly motivated and productive workforce
  • High English proficiency

How to secure flexibility and security?

An integrated approach that simultaneously enhances flexibility and security in the labour market is the winning formula. This is possible through a combination of personal taxation, unemployment benefits and securing three-year collective agreements in the public sector. It reconciles employers’ need for a flexible workforce with workers’ need for security while simultaneously promoting stability and adaptability.

Full flexibility in hiring and firing

The combined approach offers a high flexibility in hiring and firing practices, which is unique in Europe. Provided a valid reason exists and legal notice is given, the employer is entitled to dismiss any employee at any time, without incurring costs, making it easier for an individual business to adjust the size of its workforce in Denmark.

Competitive labour costs

At first sight, Danish salary levels may seem high compared to other European countries. The competitiveness of Danish labour costs is, however, visible when considering both salary and non-salary related costs, as employers have a lower aggregated cost burden in terms of social security, labour taxes and more.

This makes the overall gross labour cost very competitive without compromising employees’ rights and benefits. As such, Denmark offers a high level of social security for people who get ill or lose their job, but the employer’s direct contribution to social security is minimal.


Denmark has a highly educated population with excellent foreign language skills. In fact, we are ranked among the top countries for English proficiency on the EF English Proficiency Index and it is easy to find multi-lingual staff in Denmark.

Highly educated, productive and egalitarian

The Danish workforce is perceived as highly motivated by foreign companies operating in Denmark. Denmark is characterised by a flat hierarchical structure and a team-oriented approach, where employees play an active role in problem solving. This breeds ideas and innovative solutions, integrating user-centered design and processes.

A high level of education combined with independence and flexibility makes the Danish workforce capable of taking on tasks, which elsewhere would be reserved for management.

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