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Job optimism as Danish SMEs are best in ten years

Many smaller companies had to cut jobs during the financial crisis but are now expecting the highest employment rate in ten years. The main obstacle is the threat of labour shortage. Danish bakery Vadehavsbageriet and machinery firm ARO Maskinfabrik are two companies that feel the impact of both.
The bread is rising at Vadehavsbageriet in Ribe, and business is also going well. Finding temporary workers, however, has proven to be a challenge.

Publiceret: 07.02.2018
Af Lotte Malene Ruby mail

Things are going well for small and medium-sized enterprises all over Denmark. After a number of years marked by the crisis, optimism is back all across the board. One of these places is Vadehavsbageriet in Ribe, a smaller bake-off manufacturer that was badly hit when new legislation on opening hours in 2012 ruined business for the petrol stations and grocers who had sold the bakeries’ products but now lost customers to supermarkets with long opening hours.

“We were not so affected by the financial crisis, but the new opening hours legislation was a real punch in the gut. It forced us to seek out new paths,” says Jytte Kruse, who owns the company together with her husband.

A new strategy was also necessary because Vadehavsbageriet simultaneously faced increasing competition on bake-off products from larger bread manufacturers. The solution was a systematic search for the “gaps in the market”, Jytte Kruse explains.

“Our advantage is that we have a very small and flexible production, which allows us to be the first to offer new products when a new niche arises, such as gluten-free products. No one predicted it would become so big, but because we came first, it opened a lot of doors for us,” she says.

High growth and more hands

The strategy has worked so well that the bakery now has high expectations for business in the coming year.

“At the moment, we have seven employees in our core group, but I imagine that we will be up to ten before the end of 2018. In terms of turnover, I predict a growth of 10-20 per cent in the coming year,” Jytte Kruse estimates.

Spirits are also high at ARO Maskinfabrik in Odense, which provides solutions for district heating, district cooling and waste heat recovery, among other things. The company, which is facing a generational handover, focuses on advising and sales.

“We are really doing well. We are seeing traditional growth within our core activities, and at the same time, we are also working on a number of new initiatives - in relation to expanding both our business and exports. We currently have eight employees, but another employee will start on Thursday, and I expect that we will take on one or two more before the end of the year,” says Michael Sørensen, CEO of ARO Maskinfabrik.

And when things go well at ARO Maskinfabrik, they also go well for the companies currently in charge of manufacturing the heating and cooling systems that the company sells.

“It means there will also be more jobs for machinists and industrial technicians,” he says.

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Looking brighter all across the board

The developments at the bakery and the machinery firm are hardly exceptions. A new analysis from the Confederation of Danish Industry shows that SMEs are now expecting the highest growth in ten years – and that pleases Karsten Dybvad, CEO at the Confederation of Danish Industry.

“Danish society remains deeply dependent on our many small and medium-sized enterprises, which bring orders and growth into the local communities and together provide jobs for more than 800,000 people. It is therefore very pleasing to see that this part of business, which really suffered during the crisis, has had such a strong comeback,” he says.

The analysis, which is based on responses from DI’s Business Panel, also shows positive results when you look at private sector employment overall. When you include the biggest companies in the equation as well, unemployment is expected reach the highest level ever.

There is also some bad news. The future looks bright for Danish companies, but it is also necessary to consider the dark side of the numbers – namely that when employment increases, it simultaneously becomes more difficult for companies to find the right employees. This is something that the companies in both Ribe and Odense have already experienced.

“When it comes to permanent employees, we have not yet had any problems, but we use quite a few temporary workers for our gluten-free production. Because we cannot produce other products at the same time, we need to work at full steam for one to two weeks, but it is difficult to find people that are able to slip into the flow of things for a limited time period. That is probably our greatest challenge,” says Jytte Kruse from Vadehavsbageriet.

Michael Sørensen from ARO Maskinfabrik has also felt the effects of a tightening labour market.

“Recently, we were looking for an internal salesperson, but the stack of applications was small and many of them seemed as though they were written by people who were only applying because they had to. Fortunately, we managed to fill the position, but it was purely a coincidence, so it is clear to me that there are not many to choose from,” he explains.

See also: DI: Hoping for other ways of securing more employees

DI: We must help companies

CEO at the Confederation of Danish Industry Karsten Dybvad follows the increasing labour shortage with concern.

“Many small and medium-sized enterprises will be badly hit, because they cannot brand themselves as a famous workplace like major companies, nor do they have the HR competences to recruit abroad when there are too few Danish candidates,” he says.
The solution to the issues requires a multipronged initiative, but the first step is straightforward.

“First of all, we need to acknowledge the labour shortage as a mutual challenge for all of society – and not merely the companies’ problem. When companies across the country are unable to recruit, it affects all of us, because it means these companies have to turn down orders. In that way, we will miss out on growth and prosperity here in Denmark,” Karsten Dybvad emphasises.

See also: Optimistic Europeans fire up Danish radiators

At the moment, we have seven employees in our core group, but I imagine that we will be up to ten before the end of 2018. In terms of turnover, I predict a growth of 10-20 per cent in the coming year.

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PUBLISHED: 2/7/2018 LAST MODIFIED: 2/9/2018