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Sweden – Staffing firms earn money from terminating workers

22 November 2013

Staffing agencies in Sweden are coming under fire for benefitting financially when they terminate their workers’ contracts, reports Dagens Arbete. An investigation by the magazine, which is a union publication, claims that staffing firms; such as Manpower, Adecco, Lernia, and Antenna, earn SEK 20,000 (€2,236) for every employee they ‘coach’ back into work, despite the fact that many workers were made redundant by the very company now supporting them in finding a new job.

In Sweden, workers can pay into an insurance system called TSL, which is an ‘adjustment program’ that will support them back into work, should they become unemployed. Founded in 2004 by the Confederation of Swedish Enterprise (Svenskt Näringsliv) and the Swedish Trade Union Confederation (LO), TSL is connected with approximately 100,000 companies and covers more than 900,000 blue-collar workers.

TSL provides administration for the service, with more than 100 companies bidding to carry out the contracts. Among those bidding for the work are staffing agencies; such as Manpower, Adecco, Lernia, and Antenna.

Referencing an unreleased report by TSL, Dagens Arbete reports that between 1 September 2011 and 31 August 2013, 798 workers received support via TSL; 426 through Lernia, 146 through Manpower, 126 through Adecco, and 100 through Antenna. Of those workers, 58% received support from the company that had just terminated their contract.

According to Dagens Arbete, temporary agency workers are being made redundant; many are receiving support from the staffing agency making them redundant, and within a short period of time are being rehired by the same staffing agency on a fixed term contract of less than six months.

Lernia has the highest proportion of so-called ‘self-transformations’, having coached 426 workers over the past two years. According to Dagens Arbete, Lernia has profited by as much as SEK 8.5 million (€950,375) simply by rotating their own staff. Lernia also has the shorted conversion rate among the four staffing agencies, with workers re-hired within as little as two months of their termination. 

When contacted by Staffing Industry Analysts, the Swedish Staffing Agencies (Bemanningsfӧretagen) declined to provide a comment.  

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