The Swedish IT marketDe Zweedse IT marktThe Swedish IT marketThe Swedish IT market
I have visited Stockholm this week to visit a few of our Swedish customers and to speak to some prospective customers. My general conclusion is that offshoring is even more important for the future of the Swedish IT industry than it is for the Dutch. The shortage of IT staff in Stockholm is quite substantial. The entrepreneurs that I have spoken to, all report that it has been a struggle in the past years to attract the right people to get their work done. Outside Stockholm, in smaller cities, this problem is even worse. Stockholm has a big population and is attractive for people to relocate to. But the country is large and remote cities have shortages and less incoming mobility.
A second factor that makes offshoring important is the labor costs, which are even higher than in my own country. Salaries and employers taxation are high, especially for more senior people in Stockholm. Overhead is also high as rents and staff salaries are high. In short: everything in Sweden is expensive (24 Euros for a one way ticket from the city to the airport!).
Ik ben deze week in Stockholm geweest om een paar van onze Zweedse klanten te bezoeken en te praten met een paar toekomstige klanten. Mijn algemene conclusie is dat offshoring nog belangrijker is voor de toekomst van de Zweedse IT industrie dan voor de Nederlandse. Het tekort aan IT personeel is in Stockholm flink hoog. De ondernemers die ik gesproken heb zeggen allemaal dat het moeilijk geweest is de laatste jaren de juiste mensen te vinden om hun werk gedaan te krijgen. In de kleinere steden buiten Stockholm is het probleem nog groter. In Stockholm wonen veel mensen en het is een aantrekkelijke plek voor mensen om naartoe te verhuizen. Maar het land is groot en de afgelegen steden hebben tekorten en zijn minder mobiel.
I have visited Stockholm this week to visit a few of our Swedish customers and to speak to some prospective customers. My general conclusion is that offshoring is even more important for the future of the Swedish IT industry than it is for the Dutch. The shortage of IT staff in Stockholm is quite substantial. The entrepreneurs that I have spoken to, all report that it has been a struggle in the past years to attract the right people to get their work done. Outside Stockholm, in smaller cities, this problem is even worse. Stockholm has a big population and is attractive for people to relocate to. But the country is large and remote cities have shortages and less incoming mobility.
A second factor that makes offshoring important is the labor costs, which are even higher than in my own country. Salaries and employers taxation are high, especially for more senior people in Stockholm. Overhead is also high as rents and staff salaries are high. In short: everything in Sweden is expensive (24 Euros for a one way ticket from the city to the airport!).
I have visited Stockholm this week to visit a few of our Swedish customers and to speak to some prospective customers. My general conclusion is that offshoring is even more important for the future of the Swedish IT industry than it is for the Dutch. The shortage of IT staff in Stockholm is quite substantial. The entrepreneurs that I have spoken to, all report that it has been a struggle in the past years to attract the right people to get their work done. Outside Stockholm, in smaller cities, this problem is even worse. Stockholm has a big population and is attractive for people to relocate to. But the country is large and remote cities have shortages and less incoming mobility.
A second factor that makes offshoring important is the labor costs, which are even higher than in my own country. Salaries and employers taxation are high, especially for more senior people in Stockholm. Overhead is also high as rents and staff salaries are high. In short: everything in Sweden is expensive (24 Euros for a one way ticket from the city to the airport!).
Third, the labor laws are strict. You can hire an employee for a trial period of 6 months and after that, you have to provide a long term contract. Once an employee has this contract, it’s very hard to fire him/her again, hence making your capacity very inflexible.
The last factor, which holds true in all countries in Europe: the working population is graying. Soon, the baby-boomers (that also have a large representation in the IT industry) will get their pensions. This diminishes the availability of skilled people even more.
My feeling is that many entrepreneurs in the IT industry are very aware of this reality. They acknowledge that it has been hard to find the right people for a long time already and now (with the economic recovery getting stronger every day) is the time to start finding solutions for it.
Now offshoring is off course not the only solution, but all companies fishing in the same pond of IT-people where there aren’t enough is surely not going to work. In Eastern Europe and India, there are plenty of very skilled people, motivated to start working for Swedish companies tomorrow. If a company manages to take the step, it can establish strong growth and higher profitability. It will bring access to plenty of skilled people, which can be engaged in flexible contracts at substantial lower costs than in Sweden.
Een tweede factor die offshoring belangrijk maakt zijn de loonkosten, die zelfs nog hoger zijn dan in mijn eigen land. Salarissen en werkgeversbelastingen zijn hoog, zeker voor de ouderen in Stockholm. De vaste bedrijfskosten zijn ook hoog omdat de huur en salarissen van het personeel hoog zijn. Kortom: alles in Zweden is duur (24 euro voor een enkeltje van de stad naar het vliegveld!)
Een derde factor zijn de arbeidswetten, die zijn erg streng. U kunt een werknemer aannemen voor een proefperiode van 6 maanden en daarna moet u een contract op lange termijn aanbieden. Als de werknemer dit contract eenmaal heeft is het heel moeilijk hem/haar weer te ontslaan, waardoor uw capaciteit niet flexibel is.
De laatste factor, die voor alle landen in Europa geldt: de populatie vergrijst. Binnenkort zullen de babyboomers (die ook goed vertegenwoordigd worden in de IT industrie) hun pension krijgen. Dit zorgt ervoor dat er nog minder ervaren mensen beschikbaar zijn.
Ik denk dat veel ondernemers in de IT industrie op de hoogte zijn van deze realiteit. Ze erkennen dat het al een hele tijd heel moeilijk is om de juiste mensen te vinden (nu het economisch herstel iedere dag sterker wordt) en het is tijd om oplossingen te vinden.
Offshoring is natuurlijk niet de enige oplossing, maar alle bedrijven proberen dezelfde IT mensen die niet ervaren genoeg zijn aan te trekken en dat werkt duidelijk niet. In Oost-Europa en India zijn er genoeg zeer ervaren mensen die gemotiveerd zijn om bij wijze van spreken morgen te beginnen werken voor de Zweedse bedrijven. Als een bedrijf de stap kan nemen kan het sterke groei en meer winst realiseren. Het zal veel ervaren mensen brengen die flexibele contracten accepteren die veel minder kosten dan in Zweden.
Third, the labor laws are strict. You can hire an employee for a trial period of 6 months and after that, you have to provide a long term contract. Once an employee has this contract, it’s very hard to fire him/her again, hence making your capacity very inflexible.
The last factor, which holds true in all countries in Europe: the working population is graying. Soon, the baby-boomers (that also have a large representation in the IT industry) will get their pensions. This diminishes the availability of skilled people even more.
My feeling is that many entrepreneurs in the IT industry are very aware of this reality. They acknowledge that it has been hard to find the right people for a long time already and now (with the economic recovery getting stronger every day) is the time to start finding solutions for it.
Now offshoring is off course not the only solution, but all companies fishing in the same pond of IT-people where there aren’t enough is surely not going to work. In Eastern Europe and India, there are plenty of very skilled people, motivated to start working for Swedish companies tomorrow. If a company manages to take the step, it can establish strong growth and higher profitability. It will bring access to plenty of skilled people, which can be engaged in flexible contracts at substantial lower costs than in Sweden.
Third, the labor laws are strict. You can hire an employee for a trial period of 6 months and after that, you have to provide a long term contract. Once an employee has this contract, it’s very hard to fire him/her again, hence making your capacity very inflexible.
The last factor, which holds true in all countries in Europe: the working population is graying. Soon, the baby-boomers (that also have a large representation in the IT industry) will get their pensions. This diminishes the availability of skilled people even more.
My feeling is that many entrepreneurs in the IT industry are very aware of this reality. They acknowledge that it has been hard to find the right people for a long time already and now (with the economic recovery getting stronger every day) is the time to start finding solutions for it.
Now offshoring is off course not the only solution, but all companies fishing in the same pond of IT-people where there aren’t enough is surely not going to work. In Eastern Europe and India, there are plenty of very skilled people, motivated to start working for Swedish companies tomorrow. If a company manages to take the step, it can establish strong growth and higher profitability. It will bring access to plenty of skilled people, which can be engaged in flexible contracts at substantial lower costs than in Sweden.
About Hugo Messer
Hugo Messer is a Dutch entrepreneur, distributed agile team specialist, and author. He is the founder and owner of Bridge Global, a software services provider, and ekipa.co., an agile coaching agency. He has been building and managing teams around the world for the past several years. His passion is to enable people that are spread across cultures, geography and time zones to cooperate. Whether it’s offshoring or nearshoring, he knows what it takes to make global cooperation work.
View all posts by Hugo Messer →
I would say you have it wrong. There is no shortage of skilled IT professionals in Sweden, only dead cheap IT professionals. What we see is the clash between a high tax society having impressive labor costs, and the global market. the industries in Sweden are export intensive, therefore the global cost level penetrates the Swedish labor market, making IT staff from India more suitable than local professionals. that’s the whole story, cost level and global competition.
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