Are you considering expanding your business to Sweden but not sure where to start? In this article, we will let you know about the most important employment rules and what to expect when hiring in Sweden.
Who and where to look for?
Sweden is called the Silicon Valley of Europe for a reason! It’s the birthplace of many successful start-ups and home to some top IT professionals.
With over 3 million professionals on the market, most of the talent is located in the 3 largest cities: Stockholm, Gothenburg, and Malmö. The talent is mostly focused on Engineering with nearly 20% of Stockholm’s population employed in tech and programming, being the number one job for men under thirty. You can also find some amazing talent in Pharma, Operations, and Sales.
If you are in search of entry-level graduates, the biggest Universities producing Swedish talent are Stockholm University, Uppsala University, and Lund University. Even though most of the employed population in Sweden has completed either secondary or tertiary education, Swedes put experience over education, and you can often find great specialists with no diploma. Be mindful of that.
You don’t speak Swedish? Don’t worry! Most Swedes communicate in perfect English and many companies use English as their primary language.
Contracts in Sweden
The most popular type of employment in Sweden is a permanent or Indefinite contract. The intent to make the contract temporary needs to be clearly communicated to the candidates and mentioned in the contract to avoid any misunderstandings.
The probation period is called “provanställning,” and can be maximally six months long. Once the probationary period is over, the employment is automatically deemed to be permanent and ongoing, or “tillsvidare.”
The Swedish Contracts Act limits what can be put into an employment contract, forbidding the inclusion of unreasonable terms.
You can also use an employment agency to hire contingent workers for a certain period as an intermediary between the contract with your company and the worker. You don’t even need to create an entity in Sweden for that!
There is also a B2B option. Seasoned contractors may have their own limited company set up to issue contracts and maximize tax savings.
An interesting fact is that Sweden doesn’t have a minimum wage. Instead, employers usually set wages based on Collective Bargaining Agreements (CBAs) made with trade unions which are big in this country. About 90% of workers in Sweden, including non-union members, are protected by collective agreements.
In 2022 an average monthly salary was 45.100 SEK, but this may vary depending on the role and region.
The famous employee benefits
Nordic countries are known for their work-life balance. Sweden is no exception. The Unions help to regulate many employee benefits and other contract details so you can pretty much say it’s an employee market.
A regular work week should be no longer than 40 hours and overtime cannot be more than 48 hours per week. Another interesting fact is that Swedish law does not include any overtime pay requirements. They are individually negotiated with the unions and it’s in good tone to include them in the contract. They might go up to 200% of the standard pay.
It’s a similar case with the holidays. All employees in Sweden are entitled to 25 days of holiday per year but many companies add extra holiday days as a bonus and courtesy towards their employees. Another important local custom is allowing the employees to take four consecutive weeks of vacation during the summer. This privilege is guaranteed by law in The Swedish Vacation Act. In the country with 55% of daylight hours being likely cloudy you can’t really blame Swedes for wanting to use all the sun they can.
Who didn’t hear about the famous Paternity leave?! Swedish parents can take paid parental leave of up to 480 days after giving birth at any time until the child turns 8. The 480 days can be divided up between partners, but each person gets 60 days reserved exclusively for them and can’t be transferred to their partner. Parents of children under age 9 also have the right to work part-time. Employees who are expecting a child are entitled to seven weeks before and seven weeks after their child’s birth. Their partners receive 10 days off.
Lastly, all employees who become ill can receive up to 14 days of leave, paid at 80 percent of their usual salary.
Maybe you thought about hiring someone from abroad in Sweden? The good news is that it’s quite easy! Sweden is part of the European Union so to work in Sweden your EU employee only needs to register in the Swedish Population Register and can start right away. To do that a person needs to be able to show that they are employed and working or will be working in Sweden.
All EU and EEA citizens are entitled to stay and work in Sweden for three months. This means that they can work in Sweden even if they do not have a Swedish personal identity number.
Hiring someone from outside the EU is a bit more tricky. As an employer, you would need to initiate the work permit application and then the timeline can be between 3-6 months. The application cost involved for the employer is between 200-300 EUR.
Hiring in different countries forces an employer to know all the local specifics and laws. A lack of such knowledge could be costly. If getting into all the boring details is not particularly your cup of tea, it’s always good to use the help of an agency that owns a legal entity in Sweden. They have already done all the work and could offer you an easy solution or even manage the employees for you.
Posted in: Sweden