[Interview] "Government Should Intervene Only When Necessary...Companies Must Strike a Balance in Profit Distribution"

Author of 'Denmark's Competitiveness: The Third Hour'

Interview with writer Yuka Harikai

Danish expert with over 15 years of local experience

"In Denmark, the government intervenes only when absolutely necessary, and the basic social expectation is that disagreements should ultimately be resolved through negotiations between labor and management. Strikes are not considered evidence that the system has failed, but are accepted as a legitimate means within the process of collective bargaining."

Yuka Harikai, a Danish culture researcher, told The Asia Business Daily in a written interview on August 1 regarding the recent controversy surrounding the 'N% performance bonus,' "Labor unions and employers may have conflicting interests, but both sides are also clearly aware that they are long-term partners."

Image of artist Harikai Yuka. Provided by the artist.

Harikai, originally from Japan, earned her master's degree at Waseda University's Graduate School of Social Sciences by researching Denmark's labor market 'Flexicurity' model. In late 2009, she married her Danish husband and moved to Denmark, where she has lived and worked for more than 15 years, providing local insights about Denmark. She has written over 400 articles and appeared on numerous TV and radio programs, as well as authoring books including 'Leaving at 4PM, Twice the Results: Denmark's Competitiveness and the Third Hour,' recently published in Korean translation, 'Do Danes Value Three-Minute Conversations More Than Meetings?', and 'The Danish Philosophy of Rest.'

Harikai noted, "Both labor and management share a consensus that it is best to coordinate differences through established rules and negotiations, rather than creating long-term conflict or social instability," adding, "Wages, working hours, and many other employment conditions are determined not by law, but through collective agreements."

She emphasized, "Even for a company generating huge profits, such profits do not result in immediate and dramatic wage increases for employees," and, "Wages are mostly determined by collective agreements, so no matter how profitable a company is, it cannot unilaterally decide to dramatically increase salaries." She added, "Instead, companies must strike a balance in how they distribute profits. Some of the profits are reinvested in R&D, some are used for capital investment, some are distributed to shareholders as dividends, and some are allocated to employee compensation and improvements in working conditions."

She went on to say, "Another crucial factor is the relationship between supervisors and employees." Harikai added, "Workplaces in Denmark typically have relatively flat organizational structures, making it much easier for employees to discuss their concerns or needs directly with their supervisors through one-on-one meetings or everyday conversations," and, "If issues are not resolved through discussions with supervisors, employees can seek advice from the workplace union representative." She concluded, "This combination of honest communication and institutional support acts as a buffer that prevents disagreements from escalating into serious labor disputes."

A male office worker in Denmark is working at a height-adjustable desk. Photo by Yuka Harikai

In Denmark, labor unions are organized by industry or occupation, rather than by individual companies. This means workers do not need to leave their union even if they change jobs. Through the 'Holiday Pay' system, accrued holiday pay is not lost when changing jobs, and pension benefits can also be transferred.

◆Even Non-Regular Employees Can Become Full-Time at Any Time...Opportunities Exist Everywhere= Danes change jobs an average of over seven times throughout their lives. Unlike Japan and Korea, there is no expectation of lifelong employment at a single company. Job changes are considered a natural part of working life.

Harikai stated, "Even if someone loses their job, Denmark provides a strong safety net through unemployment benefits and social security," and added, "Danish companies are very proactive in hiring experienced employees." She continued, "Because employers can relatively easily dismiss employees, the reverse is also true: they are more open and proactive about hiring new staff." According to Harikai, "People who change jobs are often seen positively as talents unafraid of new challenges," because "they are well aware that opportunities always exist elsewhere."

The lack of a strict division between regular and non-regular employees is also one way to boost productivity. "For example, if someone chooses part-time work temporarily for childcare or other reasons, there is no social stigma based on employment type, and it is fully possible to return to full-time work whenever they wish," Harikai explained. "I know several women who reduced their hours while their children were young, later returned to full-time work, and were even promoted to managerial positions."

She said, "People need to feel a sense of security that 'Even if a job change doesn't work out perfectly, I'll be fine,'" adding, "If people don't have the minimum social safety net and confidence that 'Even if I quit my job now, I'll manage to get by,' it's only natural they'd hesitate to take risks in changing their careers."

◆The Reason Productivity Stays High Even With a 4 PM Finish= Harikai commented, "Finishing work at 4 PM certainly seems very early, and many Japanese are surprised by this," explaining, "Shorter working hours in Denmark were not the result of a single turning point, but rather the gradual outcome of various positive factors such as the labor movement, increased female participation in the labor market, and expanded public childcare facilities."

She added, "Since the 1960s, collective bargaining between employers and labor unions has led to a gradual reduction of working hours," and, "With dual-income households becoming the norm, Denmark evolved away from a society where men worked long hours and women stayed home, into one where both men and women work full-time and share family responsibilities."

According to Statistics Denmark, the annual working hours per worker decreased from about 1,960 hours in 1966 to 1,370 hours in 2023. In Korea, annual working hours still exceed 1,800. Nevertheless, Denmark records high economic growth rates among European countries: in the first quarter of this year, Denmark's GDP increased 6.2% year-on-year. Employment rates for men and women are also at similar levels.

Harikai describes what she calls the 'third hour': using energy recharged in everyday life to achieve the greatest results at work. This means work and life create a mutually supportive, positive cycle. According to her, leaving work early to find stability in one's personal life helps maintain focus at work the next day. Danes also use their work hours efficiently to ensure they can finish by 4 PM. It is also common to use height-adjustable desks to promote health.

Harikai stated, "Employers genuinely value creating an environment where people are happy to come to work and can perform to the best of their abilities," and, "Employers place great importance on employees' health and well-being, and encourage them to change positions throughout the day instead of just sitting for hours at a time."

◆Leaders Facilitate Rather Than Command= Harikai said, "In the past, Denmark had hierarchical relationships similar to those in many other European countries," but, "Today’s horizontal social relations emerged gradually through a combination of diverse factors." She highlighted, "This transformation involved the labor movement, farmers’ cooperative movements, development of the welfare state, educational reforms, greater social participation by women, and changes in management philosophy." She emphasized, "The labor movement played a particularly important role, as it promoted the idea that workers and employers are not simply superiors and subordinates, but equal negotiating partners."

Especially since the 1980s, Danish organizations have actively embraced a 'participative leadership' style, in which managers are not mere commanders, but support and foster employees’ success. Harikai explained, "At Danish companies, managers are not generally regarded as people who stand above others due to their position," adding, "Instead, a good manager is seen as someone who creates the right environment, supports employees, and helps them realize their abilities—a facilitator."

Danes share workspaces regardless of their position and work seated wherever they feel comfortable. Co-working space BLOXHUB_1

She continued, "In other words, leadership is understood as being a good facilitator, rather than someone who wields power," and, "From an early age, Danes naturally encounter the idea that 'a good leader is someone who listens, supports others, and creates conditions for people to excel.'"

Harikai stated that these relationships are closely linked to educational approaches during childhood. "In Denmark, children are encouraged from kindergarten to express their opinions assertively and to develop a sense of self-agency," she said, adding, "Teachers are not simply viewed as authority figures imparting knowledge, but rather as supporters, who create safe environments and help each child build confidence and independence."

At the corporate level, large Danish companies are highly committed to management development and provide formal leadership training. "Novo Nordisk places great importance on individual leadership and executive education programs," said Harikai, "offering programs that deeply examine questions such as, 'What does it mean to be a leader?', 'What is the role of a manager?', and 'How can a leader help employees and organizations grow?'"

This content was produced with the assistance of AI translation services.