A Danish manufacturing company in Esbjerg has put 80 production workers on a work sharing arrangement, where employees alternate between working one week and staying home on unemployment benefits the next week. The solution aims to retain skilled staff during a temporary slowdown in orders, rather than resorting to layoffs.
Company Chooses Work Sharing Over Layoffs
Vestfrost Solutions in Esbjerg, a manufacturer of components for freezers and cooling equipment, has implemented an unusual solution to address a temporary decline in orders. Instead of firing employees, the company sends 80 production workers home every other week while they receive unemployment benefits during their weeks off.
The arrangement began two weeks ago and may continue until May, according to factory manager Søren Lassen. The decision came after some expected orders failed to materialize following the new year, leaving the company waiting for necessary approvals to proceed with production.
Temporary Solution to Order Decline
Vestfrost Solutions, which exports refrigeration and cooling elements worldwide including to major clients like UNICEF, faced a difficult situation when its order book shrank unexpectedly. The company needed to reduce production capacity without losing its trained workforce.
Factory manager Søren Lassen describes the work sharing arrangement as the best possible solution given current circumstances. The company stands at a crossroads regarding order intake and pending approvals, making it impractical to maintain full production schedules.
Previous Experience with Work Sharing
This is not the first time Vestfrost Solutions has used work sharing arrangements. The company previously employed the same strategy during the coronavirus pandemic when order volumes dropped sharply. Management reports positive experiences from those earlier periods, finding that employees remained committed and ready to return to full schedules when work became available again.
The company has built a stable workforce over its more than 60 years of operation. Management believes the work sharing approach demonstrates trust in employees and recognition of their contributions to the company.
Employee Perspectives on Reduced Work Schedule
Birgit Pedersen, who has worked at Vestfrost Solutions for 33 years, now finds herself home every other week under the new arrangement. Despite the financial impact, she expresses relief that the company chose this path rather than issuing layoff notices.
The financial consequences are significant for affected workers. Employees receive full wages only during weeks they work, relying on unemployment insurance in Denmark during alternate weeks. This results in noticeably lower monthly income.
Financial Impact on Workers
Birgit Pedersen acknowledges that the reduced income requires adjustments to spending habits. She notes that certain purchases and activities must be deprioritized when household income drops. The alternating schedule means workers receive roughly half their normal monthly earnings.
Despite these financial challenges, Pedersen values the arrangement. She uses her weeks off to spend time with family and grandchildren, finding positive aspects in the extra free time.
Preferring Job Security Over Full Income
When weighing reduced income against potential unemployment, affected workers generally support the work sharing solution. Pedersen emphasizes her attachment to the workplace and her colleagues, stating she would rather accept lower pay than search for new employment after more than three decades with the company.
Union representative Mai Britt Jensen echoes this sentiment, describing the arrangement as preferable to watching colleagues lose their jobs entirely. She views the company’s decision as recognition that employees perform well and that management wants to retain them for the long term.
Expert Analysis of Work Sharing Arrangements
Thomas Bredgaard, a professor at the Center for Labour Market Research at Aalborg University, notes that work sharing remains relatively uncommon in Denmark. Danish companies typically respond to reduced demand by laying off workers rather than reducing hours across the workforce.
The practice became significantly more widespread during the early stages of the coronavirus pandemic. At that time, approximately ten times as many companies used work sharing arrangements compared to current levels.
Benefits for Labor Market Flexibility
Despite requiring public funds to support workers on partial unemployment benefits, work sharing arrangements offer advantages for both companies and society. The approach maintains employment relationships that might otherwise be severed, keeping workers attached to the labor market.
Professor Bredgaard argues that these arrangements support flexibility in the Danish labor market. Workers retain their jobs rather than moving onto full unemployment benefits or social assistance, which would cost society more while leaving workers completely disconnected from employment.
Public Cost Considerations
The work sharing model means taxpayers partially subsidize companies retaining workers during slow periods. When employees spend alternate weeks on unemployment benefits, the public unemployment insurance system covers those costs rather than the employer.
Factory manager Søren Lassen defends this arrangement as a legitimate use of Denmark’s social safety net. He views the unemployment insurance system as designed precisely for situations like this, providing a tool that benefits both companies and workers during temporary downturns. The alternative would place workers on full unemployment benefits anyway, he argues, while the company would lose trained staff and face recruitment costs when orders return.
Sources and References
The Danish Dream: Unemployment Insurance in Denmark and A-kasser
The Danish Dream: Best A-kasse in Denmark for Foreigners
DR: Birgit er sendt hjem fra arbejde hver anden uge: Jeg er glad for, at det ikke er en fyreseddel
Sygehus Sønderjylland
