Part 4: Jobs on export
Jobs are increasingly going on export in Denmark. To stay competitive the nordic finance sectors must approach the future of work, during and post the digital transition. Annette Mikkelsen, International Coordinator at Finansforbundet Danmark, argues that the winners will be defined by their ability to foresee the changing job functions and act on it.
This week NFU publishes expert insights to the disruptive forces of the digital transition in the nordic finance sector written by seven trade union representatives in policy, politics and research. Each opinion piece is a written summary of a presentation given at the NFU Policy Affairs Forum on the 9-10th of April 2018.
The result, shows a fast-increasing trend for off-shoring finance sector jobs to low-cost countries. This is likely due to increased possible mobility and to digital solutions. The number of jobs exported does not yet amount to a high number, but the increase is noticeable fast. Of the exported jobs large banks make up the main part of off-shoring in the finance sector. The jobs for direct off-shoring mainly relocates to 1) Lithuania 2) India 3) Poland; while indirect off-shoring is declining a bit and is mostly relocated to more distant countries like India.
The type of jobs that are off-shored today generally have more specialized functions. For example IT-functions, which constitutes over 60% of Danish offshoring in the finance sector (see graph for off-shoring by function 2017). Meanwhile, foreign workers in Denmark tend to hold more high-level positions today compared to middle level positions in 2008.
This change may indicate that there either are unhealthy drivers for off-shoring. For example, legal loopholes for social dumping related to lower costs abroad. Or a vacuum of missing high-level competencies inside Denmark. It may on the other hand indicate that there are healthy drivers for off-shoring. For example, that there are more high-level functions in the sector today compared to 10 years ago. Possibly even that there are more jobs or new types of jobs. Healthy relocation is clearly beneficial for the sector, customers, employees and society. Unhealthy relocation on the other hand always means a significant loss. Looking at the bigger picture, when IT competence clusters move abroad so does innovation connected to the local societal needs or the national context. In turn this may slow down progress, growth and hamper international investments. This calls for political macro solutions.
To stay competitive the sector needs to approach the future financial labour market. Rather to focus on career security than job security. Career security requires a systemic and structural investment in high-level competences. Digitalization requires that the updating of skills is done in a faster way than ever before. There is a political responsibility here to recognize the finance sector as a growth sector with a lot of healthy potential that must be stimulated by political will. To stay competitive the Nordic countries need to better promote the Nordics as a sustainable hotspot and centre for further development of finance technology.
Resources: Copenhagen economics (2017) in presentation by Annette Mikkelsen, International Coordinator at Finansforbundet Danmark 10th April
This is a written summary of a presentation given by Annette Mikkelsen, International Coordinator at Finansforbundet Danmark, on the 9-10th of April 2018 at the NFU Policy Affairs Forum. An event for secretariat staff with expertise in, or with a role connected to, sectorial and industry policy affairs. The overarching theme was: the disruptive impact of the fourth industrialization on the financial service sector. The purpose of the forum was to provide participants with the chance to exchange expertise and experiences on key finance sector topics while stimulating future cooperation and coordination on sectoral policy issues. Several interesting proposals on how to follow up and improve coordination to increase the effect of shared policy work were proposed by the participants as a result.
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