[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 fundamental social expectation is that the government intervenes only when absolutely necessary, and differences of opinion are ultimately resolved through negotiations between labor and management. Strikes are not seen as evidence that the system has failed, but rather are accepted as a legitimate means within the process of collective bargaining."

Yuka Harikai, a researcher of Danish culture, stated this in a written interview with The Asia Business Daily on August 1, adding, "While labor unions and employers may have conflicting interests, both sides are also keenly aware that they are long-term partners."

Image of artist Harikai Yuka. Provided by the artist.

Harikai, who is originally from Japan, earned a master's degree after researching Denmark's labor market 'Flexicurity model' at Waseda University’s Graduate School of Social Sciences. At the end of 2009, she moved to Denmark after marrying her Danish husband, and has spent more than 15 years sharing local insights on Danish society. She has written several books, including 'Leave Work at 4 PM, Double the Results: Denmark's Third Hour of Competitiveness,' recently published in Korean translation, as well as 'Do Danes Value a 3-Minute Conversation over a Meeting?' and 'The Danish Philosophy of Rest.' She has contributed over 400 articles and appeared on numerous TV and radio programs.

Harikai said, "Both labor and management share the consensus that it is best to coordinate differences through established rules and negotiation rather than cause prolonged conflict or social unrest. Wages, working hours, and many other employment conditions are determined through agreements rather than laws."

She emphasized, "Even companies that make significant profits do not translate those into sudden, dramatic wage increases for employees. Since most wages are determined by collective agreements, even highly profitable companies cannot independently and drastically raise wages." She added, "These companies, instead, must strike a balance in how they distribute their profits. Some of the profits are reinvested into research and development (R&D), some are used for facility investments, some are paid as dividends to shareholders, and others go toward improving compensation and working conditions for employees."

She further emphasized, "Another important element is the relationship between managers and employees." Harikai explained, "Danish workplaces typically feature a relatively flat organizational structure, making it much easier for employees to directly share their concerns or requests with their managers through regular conversations or one-on-one meetings." She continued, "If an issue cannot be resolved through discussions with a manager, employees can seek advice from a union representative within the company. This combination of honest communication and institutional support acts as a buffer, preventing disagreements from escalating into serious labor-management conflicts."

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

In Denmark, unions are joined by industry or occupation rather than by individual companies. This means that when people change jobs, there is no need to leave the union. Through the 'Holiday pay' system, vacation funds that have already been accrued do not disappear even if the employee changes jobs, and retirement pensions can also be transferred in the same way.

◆ Non-regular workers can become regular employees at any time...Opportunities exist everywhere = Danes change jobs more than seven times on average. Unlike Japan or Korea, there is no expectation of working for a single company for life. Changing jobs is considered a natural part of professional life in Denmark.

Harikai said, "Even if someone loses their job, Denmark offers a robust safety net via unemployment benefits and social security programs. Danish companies are also highly proactive in hiring experienced workers." She continued, "Because employers can relatively easily let employees go, they are also more open and proactive about recruiting new talent." Harikai added, "Those who are changing jobs are often positively viewed as talent who are not afraid of a new challenge, because everyone understands that there are always other opportunities available elsewhere."

The lack of a strict division between full-time and non-regular employment types also helps raise productivity. Harikai said, "For example, if someone works part-time temporarily for childcare or other reasons, they are not socially stigmatized because of their employment status, and it is entirely possible to return to full-time work whenever they choose. I know multiple women who reduced their working hours while their children were young, then returned to full-time positions and were even promoted into management roles."

She continued, "People need to feel a sense of reassurance that, even if a job change does not work out perfectly, they will still be okay. If there is no minimum safety net and confidence that 'even if I quit my job now, I will somehow get by,' it is only natural that many people would hesitate to take the risk of changing careers."

◆ The reason results are delivered even when people leave work at 4 p.m. = Harikai said, "Finishing work at 4 p.m. certainly seems very early, and many Japanese people are often surprised by this. Denmark’s reduction in working hours did not come from a single turning point, but was achieved gradually through several evolving factors, including labor movements, increased participation of women in the labor market, and the expansion of public childcare facilities."

She added, "Since the 1960s, working hours have been gradually reduced through collective bargaining between employers and labor unions. As dual-income households became widespread, Denmark evolved from a society in which men worked long hours and women stayed at home to one in which both men and women work full-time and share family responsibilities."

According to Statistics Denmark, the annual working hours per Danish worker have consistently decreased from approximately 1,960 hours in 1966 to 1,370 hours in 2023. In Korea, annual working hours exceed 1,800 hours. Despite this, Denmark has maintained one of Europe's highest economic growth rates. In the first quarter of this year, gross domestic product (GDP) grew 6.2% year-on-year. The employment rates for men and women are also at equal levels.

Harikai sees what she calls the 'third hour' as the time when people recharge their energy during daily life and channel it into their work to produce the best results. Work and life should complement each other. The idea is that leaving work early provides a sense of stability in one’s personal life, allowing for better focus at work the next day. Furthermore, Danes use working hours efficiently in order to leave work by 4 p.m. It is also common for people to use height-adjustable desks for their health.

Harikai said, "Employers in Denmark genuinely value creating environments in which people feel good about coming to work and can maximize their potential. Employers prioritize the health and well-being of employees, encouraging them to change positions throughout the day rather than constantly remaining seated for hours on end."

◆ Leaders do not command, but act as facilitators = Harikai said, "In the past, Denmark also had hierarchical relationships like many other European countries, but contemporary horizontal social relations have gradually formed through a combination of different factors." She continued, "These include the labor movement, the farmers' cooperative movement, welfare state development, education reform, expanded participation of women in society, and changes in management philosophy. The labor movement, in particular, played a critical role by promoting the awareness that workers and employers are not simply superiors and subordinates, but should be equal negotiating partners."

Especially since the 1980s, Danish organizations have actively embraced a participatory leadership style, redefining the manager’s role as one of supporting employees and fostering their success, rather than simply giving orders. Harikai explained, "Within Danish companies, it is generally not considered appropriate for managers to stand above others simply because of their title. Instead, a good manager is someone who creates the right environment, supports employees, and enables them to thrive—in other words, takes on the role of a facilitator."

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

She added, "In other words, leadership is understood less as the exercise of power and more as being a good facilitator. From a young age, Danes are taught that ‘a good leader is someone who listens to others, supports them, and creates the conditions for people to reach their potential.’"

Harikai pointed out that such relationship-building is deeply connected to the educational methods of childhood. "In Denmark, children are encouraged from their kindergarten years to express their opinions confidently and develop a strong sense of identity. Teachers are not seen simply as authoritative figures who impart knowledge, but instead frequently act as supporters who help create a safe environment and enable each child to build confidence and independence."

On the corporate level, Danish major companies actively invest in developing managers and offer formal leadership education. Harikai stated, "Novo Nordisk gives high importance to individual leadership and executive management training programs. Their programs deeply explore questions such as 'What does it mean to become a leader?', 'What roles should a manager play?', and 'How can a leader contribute to the growth of employees and the organization?'"

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