Recruiting Top Talent in Denmark
Hiring the right talent in Denmark to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in Denmark yet. Our PEO and EOR service can be the solution for your company. Recruitment can be a tricky business, especially when a company is venturing into unfamiliar countries and exploring new markets. This is the perfect occasion to bring in a specialist to oversee the process for you.
Bradford Jacobs’ benchmark platforms as a Professional Employer Organization (PEO) have worldwide reach and include a total understanding of the challenging complexities of the Danish economy and employment market. You can trust Bradford Jacobs to put the brightest talent in place for your company. Our comprehensive knowledge of all Danish employment sectors and understanding of the culture and customs guarantee an untroubled transition. Look through our guide to familiarize yourself with everything an employer needs to know about the recruitment process in Denmark.
The Recruitment Process in Denmark
The Danes are often named the world’s happiest people, with a laid-back and chilled outlook on life which can also be seen in some approaches to recruitment. Employers are happy to take a phone call from job seekers asking relevant questions about the position and like the candidate to emphasize how much they want to work for the company as well as wanting the job. Employers put a candidate’s relevant professional experience above education and increasingly use LinkedIn and Facebook as recruiting tools.
The service and industries sectors employ the vast majority of Denmark’s workforce, in education, engineering, IT, medicine and healthcare, pharmaceuticals, iron and steel, electronics, food products, clothing and textiles. Small to medium-sized enterprises (SMEs) dominate the market. The employment market is fluid and flexible, with employers hiring and firing as they respond to market forces. Employees, though, do have the security of ‘A-kasse,’ the unemployment insurance fund. It is a combination which has keyed in the word ‘flexicurity’ to describe the Danish job scene.
Recruitment is the first stage of making your company operational and competitive in Denmark. It is vital to know where to locate the finest talent to be a perfect fit for your company’s expansion plans. Foreign businesses must follow strict procedures to register and onboard employees, complying with Danish law as well as any applicable European Union (EU) directives. Procedures include:
- Obtaining a Central Business Registration (CVR) number from the Danish Business Authority (DBA) for dealing with the various legislative bodies
- Registering with the Danish Customs and Tax Administration (SKAT) for withholding tax from employees’ salaries and remitting to the authorities
- All employers must take out mandatory industrial insurance, along with the withheld Danish Labor Market Supplementary Fund (ATP) contribution
- Creating contracts – All Danish employers must provide a contract if the employee has worked for at least one month and more than eight hours a week. The contract must cover specific conditions of the employment and can be requested in the language of choice, though this is not a legal requirement
Legal Checks You Can Make on Employees in Denmark
When commencing the recruitment process in a foreign country, employers must consider their legal obligations regarding personal information. Employers must carry out background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment. These background checks may also only be carried out with the consent of the candidate, and all employee information must be protected according to GDPR and data protection laws.
Common checks carried out in Denmark include:
- Criminal record checks – Criminal records can be obtained only by the individual concerned and the employer still needs a valid reason for requesting them, such as employment with minors.
- Minors’ Safety checks – For any role which involves working with children under 15 years of age, the employer can ask for verification the employee/candidate is cleared to work with children.
- Health checks – Under the Use of Health Data in the Labor Market Act, information on the employee/applicant’s health can be obtained only if it is directly relevant to the job.
- Education Record and References – It is permitted to ask employees to supply these.
- Credit Checks – Only if relevant to the position.
- Documentation checks – Confirmation the applicant has required documentation to live and work in Denmark.
Basic Facts on Hiring in Denmark
Companies hiring staff for expansion into Denmark must comply with a framework of rules and regulations on employment and taxation that are applied at the state and municipal levels. Some areas are not subject to mandatory state regulations, which is when collective and trade union agreements and directives from the European Union (EU) can come into play. Companies expanding into Denmark must comply with various basic facts on hiring. These include:
Employers should provide a written contract within a month, providing the employee will work for more than a month and at least eight hours a day. Oral contracts are considered equally legally binding.
Foreign employees should ask for a translation if they have insufficient Danish to understand the contract terms.
Denmark typically has three types of contracts – permanent (open-ended), fixed term and casual.
Contracts should include full details of employer and employee, job type and location, vacations and other benefits, type of contract (permanent or fixed term for example), notice and termination details, and any relevant trade union, or collective agreements.
After hiring and onboarding, employers must be aware of other considerations. Minimum standards apply to such as sick leave, minimum wages, working hours, maternity allowances, paid vacations, termination, severance, notice periods and social insurance payments. Other rules regulate workplace discrimination.
Also, to hire employees, companies must follow strict procedures to set up a legal entity in Denmark to run their own payroll. These include:
- Select a unique company name and type of entity, typically a limited liability company called an Anpartsselskab (ApS).
- Register for a Central Business Register (CVR) number via the Danish Business Authority (DBA) website at a cost of DKK 670 (€90, US$104) The DBA requires a ‘NemID’ digital signature to access internet services; this needs Danish residency and a work permit.
- Transfer share capital of DKK 40,000 (€5,374, US$6,230) for operational costs.
- Provide full details, passports, and ID of all board members, who need not reside in Denmark.
- Register with Customs and Tax Administration (SKAT) for tax and VAT.
- The company must further be registered for VAT, if revenue is above DKK 50,000 (€6,717, US$7,790), payroll tax, import/export licenses (for business outside European Union), tax, which is deducted at source from employees’ salaries.
- Take out mandatory industrial injury insurance.
Working with a Recruitment Agency in Denmark
In addition to independent recruitment agencies, Workindenmark and all Danish job centres are part of the European Union’s EURES network. EURES was set up in 1994 to aid job seekers and employers across Europe to combine information and place staff by overcoming language and cultural differences, diverse employment laws and bureaucracy. The Danish Agency for Labor Market and Recruitment (STAR) works with the Ministry for Labor to reduce skills shortages in particular sectors and also oversees the recruitment of foreign staff.
As in most European nations, Danish recruitment agencies operate in their own specialist sectors, such as finance, life sciences, engineering and manufacturing, the medical sector, retail, sales, and marketing.
What are the Benefits of Hiring Outsourcing for Denmark?
A major benefit of outsourcing recruitment in Denmark is that it streamlines international expansion by opening potential new markets efficiently, speedily, and cost-effectively. Outsourcing allows companies to focus on planning and managing their new venture.
Advantages for the parent company include:
- A wide-ranging talent search was undertaken by a Professional Employer Organization (PEO) with reduced recruitment costs
- Control over capital expenditure, as outsourcing removes the initial need to establish premises for a subsidiary
- Reduce risks with an ‘easy in, easy out’ operation while exploring fresh markets
- Quickly start new projects
- Focus on core business
- Improve flexibility
- Scale the global workforce to fit the pace of expansion