Executive summary:
- Sweden is a nation of only 10 million people, but it has been consistently identified as one of the most productive and innovative economies in the world.
- Much of what underpins this global competitiveness is counter-intuitive from a British perspective.
- “Employee-centred” flexible working, an overwhelming focus on employee health and well-being, a genuine commitment to work-life integration, minimal power distance between leaders and employees, and a deep trust in employees to do the right thing for the organisation.
- What can UK leadership learn from the Swedish model? At the very least it should cause us to challenge our traditional paradigms.
We find ourselves today in a scenario where a great skills shortage looms as the baby boomer generation are fast retiring. With the incoming millennial generation being much smaller in number and with skilled (and soon to include unskilled) EU worker headcounts fast declining, the war for talent is fierce.
Most employers are banking on attracting fresh-faced millennials that will hit the ground running and simply continue where the baby boomers left off. However, employers are also fast learning that millennials are an entirely new species of worker who feel disillusioned with traditional business motives and are expecting more from their employers than financial reward. They also seek meaning in their work, want to feel part of something bigger and look for employers with values that they can believe in.
Because of this shift, (and partly because it is a struggle to increase financial incentives when the economy is volatile) employers are looking for other methods to attract, retain and boost the productivity of their talent.
Perhaps UK employers can look to their Swedish counterparts for some guidance.
But Why Sweden?
Whilst UK productivity has long been stagnant and recently suffered its fastest drop in 5 years, Sweden’s productivity level is one of the highest in the world. Despite only having a population approximately the same size as Greater London, Sweden’s economy is booming, and it is a leader in the international innovation rankings (Global Innovation Index). By way of example, there are 20 start-ups for every 1000 employees in Sweden, versus 5 for every 1000 in the US. Also, second to Silicon Valley, Sweden’s capital Stockholm is home to the world’s highest number of billion-dollar start-ups per capita.
One common cited reason for this success is the collaborative culture found in Swedish workplaces. Swedish companies, like UK companies, have ambitious corporate goals. However, in pursuing these goals they do not forget to maintain strong company cultures that prioritise employee happiness, teamwork and work-life balance. Swedish employers learned long before the rest of us that a healthy company culture leads to greater talent retention, a boost in innovation and increased profits.
So, what exactly does this strong company culture look like, and what practices can English employers glean from the Swedes?
- Flexible working
Flexible working is a very familiar concept within Swedish organisations. Employees tend to be given the freedom to work how (and often where) they want. The implementation of flexible working ranges across companies. Some companies operate a flex-bank system. If employees have ‘banked’ hours by coming in much earlier, they can then take the time off in lieu at the end of the day or at some other point during the week. Other companies set core hours of the day during which employees must be at work, but the remaining day is seen as flexitime, where employees are trusted to meet their work targets as and when they want. It is very normal in Sweden to see parents leave work around 3pm to pick their children up from school, or see colleagues leave a few hours earlier on a Friday to drive to their summerhouses.
Despite this essentially being a ‘free’ initiative that UK employers could use to boost their employee value proposition, UK employers seem to fear flexible working. It is equated with a lack of control, low productivity and employees who take advantage. What Swedish businesses exemplify is that a successful implementation of flexible working relies as much on a cultural change as it does a policy change. Management need to first create a culture of trust, where employees are trusted to produce good work even when not under the watchful eye of their employer. Secondly, flexible working must be encouraged and supported. There is no point implementing a flexible working policy in a company where presenteeism is rewarded and colleagues are quick to shun employees who put flexible working into practice. Again, this cultural change will need to start from the top down, with managers encouraging flexible working and rewarding staff who produce strong work away from the office. Many Swedish employees will confirm that they feel supported by colleagues and management to work flexibly, they know they are entrusted to handle their own time in any way they want, provided the work continues to be completed to a high standard.
Rather than fear flexible working, UK employers must try to see the potential. Where flexible working schemes are implemented well, business overheads can be reduced, organisations can become greener and employee wellbeing improves. Swedish employers’ openness to flexible working resulted in the country being ranked best in the world in a recent HSBC survey for work-life balance. Only 1.1% of Swedish workers work very long hours, compared to the OECD average of 13%. This work-life balance also helps the country as a whole to attract and retain highly educated workers.
- Employee wellbeing
Perhaps the fact that the word arbetsglädje “happiness at work” exists in Sweden, or the fact that Sweden has one of the highest life expectancies in the world indicates that Swedish employers are getting something right!
When it comes to employee wellbeing, Swedish employers tend to adopt a holistic approach. Aside from the more traditional offerings such as health insurance and annual general medical examinations, employers also offer incentives such as ‘wellness grants’ which employees can spend on sporting activities of their choosing. This encourages employees to take responsibility for their own welfare, facilitates healthier lifestyles and in turn reduces the levels of sickness absence. Another norm is for employers to offer free fruit or subsidised meals in the office, along with free health and wellbeing treatments such as massages, or support to stop smoking.
For employers with restricted budgets, smaller, less costly changes should not be underestimated. Swedish workplaces often live and breathe the principles of “ergonomics” in the widest sense of the word. Changes such as good lightning, comfortable chairs and the addition of plants to an office space can have a big impact on employee wellbeing. Swedish employers also often have workplace wellbeing panels – another free initiative with the purpose of promoting work-life balance and healthy lifestyles.
- Work-life balance and productivity – a happy medium
The Swedish mindset around work-life balance is entirely different to that in the UK. UK employers and employees have only recently started warming to the idea that a good work-life balance can offer a number of benefits. Simultaneously however, a healthy work-life balance is generally still viewed as an unattainable ideal. In Sweden, work-life balance is not just an ideal but an absolute priority; with employers putting strategies in place to ensure the balance is achieved, and actively discouraging overtime. Whilst overtime in the UK is often hailed as a sign of dedication and ambition, overtime in Sweden is viewed as unnecessary and simply an indication of inefficiency or poor planning.
The statistics show however that the Swede’s focus on work-life balance does not mean that productivity levels are skimped. In fact, the opposite is shown. Perhaps this is because employees who know that they are expected to stay at work for long hours regardless of whether they are highly efficient or not, are more likely to feel disillusioned and unmotivated. On the other hand, employees who have more autonomy and realise that high levels of efficiency during the working day will enable them to leave work at a reasonable time and focus on other equally important aspects of their lives, are possibly more likely to demonstrate high levels of productivity.
The Swedish word lagom meaning “just the right amount” and the Swedish “fika” break perhaps best exemplify the Swedish attitude to work and life in general. The fika break often takes place two or three times a day in Swedish offices. It is essentially a coffee break during which colleagues come together to share something to eat and drink. It is a chance for colleagues to fully switch off during the working day. Again, both the fika and the Swedes’ “lagom” attitude are fundamentally free initiatives that can be adopted by UK employers to help foster an environment which results in happier, more productive employees.
- Flat hierarchies and transparency
It is not only Swedish furniture that comes flat-packed! Swedish management styles tend to be very flat too. The focus lies on employers understanding their workforce, on collaboration and the success of the team, as opposed to on hierarchy or individual achievement.
There is a sense of antipathy towards strictly enforced hierarchy in Sweden. Attributes such as self-sufficiency, openness and integrity garner more respect than materialism and competition. The absence of hierarchical divides between employees is seen as vital by employers, as it allows management to remain close to their subordinates and understand what they are really thinking. As a result, you will often find management and junior team members working in close contact. Across the board, communication style is respectful but informal; it is in no way tailored to the seniority of the person being spoken to.
The hierarchical structure of a company can have significant impacts on feelings of autonomy and job satisfaction amongst employees. In order to develop a flat management structure that optimises company happiness and fosters productivity, UK employers can take heed of the following Scandinavian practices:
- Focus on teams, not managers
Rigid hierarchical structures tend to systematically disempower junior employees, meaning that they are susceptible to feeling a lack of ownership for work produced. Workplaces with flat management structures, or where the emphasis is on small autonomous teams as opposed to management pyramids, help empower all employees no matter their level. Within team structures each employee is an equal and valued contributor, and therefore feels a greater sense of ownership, as well as accountability, for work produced. This can also lead to greater feelings of motivation and dedication to their employer.
- Use transparency and communication to generate trust
When thinking about implementing a flat hierarchy, UK employers do not have to abolish all management levels. Seemingly obvious practices such as being authentic and ensuring transparent communication between everyone within an organisation can make a big difference in fostering higher levels of employee engagement, collaboration towards the company’s goals and trust. Open communication can be facilitated by giving employees unrestricted access to senior leaders.
Like UK companies, Swedish companies have big goals. The difference in Sweden is simply that employers are very open about their expectations and the status of any goals. It is not unusual for example, for the Director of a Swedish company to share and discuss the company cashflow with all employees. Swedish employers also make clear that the achievement of a goal is a shared responsibility.
- Embrace individuality
In Sweden, flat management is as much about abolishing hierarchy as it is about promoting individuality. Employees are encouraged to be themselves and not be afraid of trying, failing and learning from mistakes. Where employees feel comfortable sharing their opinions and feel supported to try new ideas and ways of working, innovation and motivation thrives.
Conclusion
It is important to acknowledge however that these practices are commonplace in companies operating in Sweden, a country whose unique combination of free market capitalism and a generous social welfare system facilitates a forward-thinking approach in the workplace. By way of example most Swedish workers benefit from state provided childcare, state reimbursements for days taken off to care for a sick child, virtually free schools, virtually free healthcare, and a generous 480 days of paid parental leave (at least three months of which must be taken by the father/second partner) amongst other benefits. Therefore, achieving the high levels of employee productivity, happiness and commitment described above becomes a more straightforward task for a Swedish employer than it is for an employer operating in the UK.
Although it is easier for Swedish employers to effect flexible working, employee wellbeing and work life balance against this backdrop, UK employers should not be deterred. UK employers need not drastically transform their organisations, it is a good start to simply be aware that there are alternative ways of doing things. UK employers can attempt to implement some of the above practices where they feel these practices would compliment and positively impact their organisation.
The first step is simply about broadening perspectives. After all, employers cannot repeat the same actions over and over again but expect radically different results.
16th March 2020