Swedish employers told not to let language be a barrier to hiring staff

Sweden's jobs agency has urged employers to consider hiring people with limited Swedish skills to fill vacancies, as new stats show a labour shortage amid falling unemployment.

A woman waiting tables.
Sweden's hotel and restaurant industry is crying out for workers. Photo: Stina Stjernkvist/TT

A total of 388,000 people were registered as unemployed with the Swedish Public Employment Service (Arbetsförmedlingen) at the end of September, 77,000 people fewer than the same month last year – a fall from 9 percent to 7.5 percent in a year.

But there’s a shortage of skilled workers, reports the service. Almost 124,000 jobs were advertised on its site in September, up from 60,000 last year and 80,000 two years ago.

“Even before the pandemic, there was a shortage of skilled labour, such as chefs, engineers and assistant nurses. Now that the labour market has started up again, the shortage is again noticeable,” writes Arbetsförmedlingen in its report on Tuesday.

Employers are also struggling to fill certain entry-level jobs, such as restaurant waiting staff. One possible reason for this is that many people in the hotel and restaurant industry were laid off during the pandemic and have in the meantime found a job in another sector.

More than 219,000 foreign-born people were registered as unemployed in September – down from 248,000 last year but more than the 168,000 native Swedish job seekers. More than 177,000 job seekers were born in a country outside of Europe, according to the report.

The number of non-European job seekers has fallen from 197,000 in September 2020, but long-term unemployment has increased within the same group. Last month, more than 96,000 non-Europeans had been without a job for at least 12 months, up 5,000 in a year.

Arbetsförmedlingen warned that around a third of its registered job seekers had never completed their upper secondary education, which is in theory voluntary in Sweden but is compulsory in practice as most job advertisements state it as a requirement.

The report added that many job seekers don’t have the level of Swedish that’s often required, and urged employers to step up their work to retain and attract the workers they need.

“It may be good to review your list of requirements as an employer. You might want to think about whether it’s possible to hire someone with limited experience or a slightly lower level of Swedish,” Arbetsförmedlingen analyst Annika Sundén told the TT newswire.

Long-term unemployment increased overall in Sweden in the past year, up 15,000 to more than 186,000 last month. However, it has fallen in recent months, from a record 190,000 in summer.

The map below shows the current unemployment rate in each of Sweden’s 21 regions.

Member comments

  1. I don’t really understand the intent of the government request/statement: if employers wanted to hire skilled people with limited Swedish or people with limited skills, but fluent in Swedish, wouldn’t they have done so already? I wonder if to get employers to change their behavior the government needs to incentivize them?

    I can tell you as a skilled person with limited Swedish (between A2 & B1), zero employers have been interested in even interviewing me for jobs I was certainly qualified for. Even when I’ve submitted CV & personlig brev på svenska. If they had wanted to interview me, they would’ve.

    I agree it’s a serious problem; I don’t think employers do, though.

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What will Sweden’s interest rate hikes mean for foreigners in Sweden?

Sweden's Riksbank now expects its base interest rate to be close to two percent in three years' time. What will this mean for foreigners living in Sweden?

What will Sweden's interest rate hikes mean for foreigners in Sweden?

How high could interest rates go? 

The Riksbank on Thursday increased its key interest rate above zero for the first time since the autumn of 2014.

But it isn’t going to stop there, it expects to hike the rate in small increments over the next three years, to 1.18 in the middle of next year, to 1.57 in the middle of 2024, and to 1.81 in the middle of 2024. 

At a press conference on Thursday, the bank’s governor Stefan Ingves said that people should prepare for higher rates, but stressed that there would be “no extreme rate levels”. 

“We’re not slamming on the brakes, more taking our foot off the pedal,” he said. 

It’s worth remembering, though, that in the run-up to the Swedish banking crisis in the early 1990s, the key interest rate moved from 1 percent to 2 percent to as high as 10 percent, before the Riksbank finally upped it to 500 percent in a desperate attempt to defend the krona. 

As recently as February the Riksbank was not expecting to raise rates from zero until 2024, so if inflation proves more stubborn than expected, the key rate could possibly go higher. 

But Robert Boije, chief economist at Swedish state-owned mortgage lender SBAB, said that as inflation today is most likely the result of higher energy prices, and supply-side constraints, rather than because there’s too much money in the system, the risk of seeing higher rates than the Riksbank has outlined is relatively small.  

“There’s a higher probability of a lower repo interest rate [than expected] in 2024 than of a higher interest rate,” he said. 

How will higher interest rates affect mortgage rates? 

According to Claudia Wörmann, SBAB’s housing economist, interest rates on floating mortgages could nearly double over the next year from around 1.8 percent today to about 3 percent in January 2026.

She expects two-year fixed mortgages, which are now at around 2 percent to rise to 3.4 percent in January 2025, while five-year fixed-rate mortgages will rise from 2.5 percent today to 3 percent in 2023 and 4.1 percent in 2026. 

Many mortgage lenders had already anticipated Thursday’s rent rise, with Handelsbanken/Stadshypotek, Skandiabank, and SBAB all upping their mortgage rates by as much as 0.25 percentage points last week. 

Bigger monthly payments for those with loans

According to Wörmann, someone with a million kronor mortgage who currently has a two percent interest rate, would see their monthly payment double from about 1,160 to 2,330 if their mortgage rate rises to four percent. 

As most borrowers pay more than they need to simply to meet their interest payments, however, many have some flexibility, meaning they can slow down their repayments to make it easier to bear the increased cost, she said.  

“One aspect is the interest rate, but you need to bear in mind that a normal household amortises much more than they pay in interest rates,” she said. 

Lower buying power for those without a mortgage

For foreigners in Sweden looking to borrow to buy a house, higher mortgage rates will reduce the amount of money they can borrow to buy a house or apartment.  

Houses and flats in Sweden might get more affordable

Two years of rising house prices showed signs of coming to halt last month. 

The Swedish financial supervisory authority warned earlier this month that in its worst-case scenario, where rising interest rates are compounded by higher power costs for consumers, house prices could fall by as much as 30 percent. 

In its less dramatic scenario, the prices of apartments owned as part of a cooperative – so-called bostadsrätter – would fall only slightly, while the price of detached houses would fall 10 percent. 

“Our prognosis is that housing prices at the end of 2024 will be about ten percent lower than what they were on January 1st this year,” said Boije. 

The decline will start with a 1.3 percent drop this year, followed by a bigger 6.1 percent drop next year, and then a 3.8 percent drop in 2024. 

For most buyers the affordability of housing will not change very much, Boije points out, as higher interest rates will reduce the amount they can borrow. 

“If there’s a one-to-one correlation between the interest rate and housing prices, then the use cost of housing in economic terms will not change very much,” he said. 

Foreigners who are able to buy in Sweden without taking out a loan, will see a benefit, however.

It will also become easier for those taking out a mortgage to gather together the 15 percent of the value of the property they are required, under Swedish law, to pay in cash. 

READ ALSO: Will Swedish housing prices plummet as interest rates rise?

Wörmann said there was little doubt that the increase would start to pull down house prices, particularly when you looked at rising costs and post-pandemic effects. 

“It’s more expensive to buy food, you have to take into account that people are spending much more money on electricity and on fuel,” she said.

“We are leaving a pandemic where we were stuck in our homes, which might have meant that people didn’t mind paying a lot of money for their house as they spent so much time there. Now we are released from our home, and that might change how we look at our homes and our willingness to buy something expensive.” 

For foreigners who have yet to buy a house or flat in Sweden, a 30 percent fall in prices would of course be quite welcome, increasing the affordability of property in the country. 

Foreigners paid in local currency may benefit from a stronger krona

The hike in interest rates saw the value of the Swedish krona rise against both the dollar and the euro on Thursday.

If the Riksbank has now left behind the loose monetary policy which saw it keep the key interest rates negative between February 2015 and December 2019, the krona could strengthen against other currencies. 

“If markets now expect the Riksbank to be more hawkish relative to the Fed in the US and the ECB, this should increase the value of krona,” Boije said. 

This will mean foreigners paid in kronor will earn more once their salary is converted into another currency. Conversely, those paid in euros or dollars, but living in Sweden, could see an effective salary cut.