Sweden has answer to redeployment

Last month’s Productivity Commission report highlights the failure of our immigration policy to address skills shortages and calls for a review of the policy. This is certainly needed, but the problem goes back much further than the last decade and the attempted solution, immigration, hides a deeper malaise.

Workplace hierarchies prioritise shareholders’ short-term profits, damaging business by encouraging poor wages, poor investment and poor skills. Instead, skills are sought via employment agencies, and when they fail to deliver, through immigration. The model is opposed to investment in skills development as a long-term benefit to a business, the wider industry and national skills base.

The Swedes have a unique system. ‘‘Trygghetsfonden’’ comprises 10 jobsecurity agencies which make up a ‘‘job transition system’’. These agencies provide expert support to laid-off workers to transit into other employment sectors.

They co-ordinate counselling, coaching, providing and paying for retraining programmes. A personal mentor is allocated to an individual for up to five years and there are no limits to the money spent to get a person back into employment.

Eighty per cent of workers are reemployed in other sectors within a year.

In Sweden, employers can draw on a pool of highly skilled people. And as education levels have risen and organisations make use of employees’ intellectual capital, steep workplace hierarchies have lost any residual usefulness – Sweden has the flattest organisational structures in the world.

Trygghetsfonden is entirely funded by private enterprise. Companies typically pay 0.3 per cent of their wage bill each year to fund it.

Can we not be inspired by Sweden? John Morgan, Tauranga [abridged]