3. Literature review: Employers’ perspectives on and experiences with hiring immigrants

As noted above, this literature review primarily focuses on employers’ views, experiences and perspectives regarding the hiring of immigrants in the Nordic countries. In this section, we seek to address the following questions: What motivates employers (in both the private and public sectors) in the Nordic countries to hire immigrants, and what benefits have they observed? What challenges have employers identified when hiring immigrants?

The literature review has identified numerous benefits for employers associated with hiring immigrants. Bjerck et al. (2018) differentiate between motivations for inclusion linked to social responsibility, and those stemming from a perceived benefit perspective. The former is driven by a commitment to inclusion, in which it is seen as ethically right and essential for the community. The latter emphasises the financial advantages of promoting inclusion. The authors found that in practice these two motivations frequently intertwine. For municipalities acting as employers, the low employment rate among immigrants can lead to economic consequences such as a diminished tax base and increased strain on municipal budgets. Consequently, integrating immigrants into the labour market becomes beneficial for the broader community’s wellbeing. For private employers, their commitment to maintaining social responsibility in the local community is not only advantageous for enhancing their public image and reputation, but can also positively impact the organisation’s profitability (Bjerck et al., 2018).

Labour shortages are a significant concern in the Nordic labour markets (Lämsä et al., 2019; Sánchez Gassen et al., 2022). Hiring immigrants is seen as one solution to these shortages, and as a way of ensuring businesses’ operability and vitality (Bjerck et al., 2018). This is particularly evident in sectors facing a pronounced shortage of skills and talents, as in the agricultural sector (Barth & Zalkat, 2022). In industries such as fishing, in which native-born employees are often reluctant to work, or in sectors with high turnover, such as the grocery industry, or in sectors with an increased demand for seasonal workers, e.g. hotels, hiring immigrants was found to be particularly beneficial (Bjerck et al., 2018).

A commitment to inclusion might be driven by marketing considerations. Embracing inclusion can enhance an organisation’s reputation and have a positive influence in terms of generating consumer support (Bjerck et al., 2018). A 2023 survey of Swedish consumers commissioned by the Tent Partnership for Refugees showed that companies that publicly support refugees, especially by hiring them, appeal to consumers. The survey showed that about 50% of consumers are more likely to buy from a company that hires refugees (Tent, 2023). 

Workforce diversity may encompass a range of characteristics, such as gender, age, ethnic/cultural background, class and abilities, with exact definitions varying across organisations (Vanhanen et al., 2023). There is a large body of literature that presents evidence of diverse businesses being more profitable and innovative (Konrad et al., 2006; Mullins, 2008; Stevens et al., 2008). According to a survey conducted among 1,500 Norwegian enterprises, 70% believed that businesses might miss out on valuable expertise by not hiring immigrants (Andersen & Braanen Sterri, 2022). As highlighted by diversity management literature, a diverse workplace, with teams characterised by a variety of perspectives and experiences, can enhance creativity, knowledge, innovation and problem-solving capabilities (Finnish Institute of occupational health, 2016; Hofhuis et al., 2016).

Moreover, diversity can be used to enhance the ability to meet the needs of diverse customers in a more effective way, leading to better sales and increased profit (Andersen & Braanen Sterri, 2022; Bjerck et al., 2018).

In the Norwegian context, employers emphasise that many refugees have a robust work capacity and a strong work ethic. This is often attributed to their familiarity with more demanding job markets, as a result of which they are more inclined to be flexible and take on extra shifts (Fedreheim et al., 2022). This perspective was further emphasised in the study by Friberg & Midtbøen (2019), who found that Norwegian employers in the fishing and hotel industries preferred employing immigrants due to their work ethic and superior moral values. However, it should be acknowledged that despite these positive perceptions, immigrants were usually preferred for more basic or low-skilled positions.

In a survey of HR professionals for the Finnish Diversity Barometer (2016), some respondents indicated that service or care workers with an immigrant background tend to be more client-oriented, especially when interacting with a customer or patient (Finnish Institute of Occupational Health, 2016). The respondents also pointed out that an ethnically diverse workforce improves the service to customers from different cultural backgrounds and provides opportunities for customers to communicate in their native languages (Finnish Institute of Occupational Health, 2016). This is particularly pronounced in some sectors. For example, in the retail sector, hiring female refugees is described as a strategy that resonates with an increasingly female and multi-ethnic clientele (Tent, 2021). Furthermore, a diverse workplace affords a more flexible distribution of working duties, due to workers from different religious backgrounds being willing to work on Christian holidays and Sundays (Bjerck et al., 2018).

Diverse workplaces are associated with improved job satisfaction, a greater sense of inclusion, and more efficient knowledge-sharing among teams (Hofhuis et al., 2016). Text Box 2 provides a brief overview of the positive outcomes associated with diverse workplaces.

This section presents an overview of the key challenges and barriers faced by employers when hiring immigrants and integrating them into a workplace. The discussion is organised around three levels of barriers that employers encounter when hiring immigrants: structural, organisational and individual (Fedreheim et al., 2022; Syed & Özbilgin, 2009).

Structural barriers concern regulative and legislative obstacles that influence employers’ behaviour. They might concern structural aspects of local labour markets, lack of jobs, skill mismatches, and the structure and characteristics of wage subsidies (which we explore in depth in chapter 4), as well as difficulties faced by immigrants when obtaining work permits, which present challenges to employers during the hiring process. While only a limited number of studies addressed these issues, the following aspects can be highlighted.

From the viewpoint of employers, legal and administrative obstacles related to access to the labour market may limit the immigrants’ employability. Such challenges can make employers reluctant to recruit immigrants or invest in their skills development (Baglioni, 2020). Specific administrative requirements, e.g. for work permits, may put refugees and asylum seekers at a disadvantage (OECD/UNHCR, 2016).

In their study, Bjerck et al. (2018) found that framework conditions, as well as the language requirements in the public sector in Norway, might restrict both the provision of internships and the recruitment to permanent positions of vulnerable groups such as immigrants. The HR managers interviewed in the study note that candidates who perform well in the internship might be excluded from permanent or part-time positions due to language requirements, which for some jobs may be too strict. Public-sector employers also mention that the Inclusive Work (IA) agreement

The agreement aims at preventing and reducing absence due to sickness, strengthening attendance and improving the working environment, as well as preventing dropping out of working life. The first IA agreement was concluded in autumn 2001. The current IA agreement applies for the period 1 January 2019 to 31 December 2024.

only advantages internal employees. Bjerck et al. (2019) claim that there is a discrepancy here, as the Norwegian State Employer Policy (The Norwegian Government, n.d.) points out that municipalities must be inclusive of all types of candidates, but at the same time the policy’s guidelines embed direct obstacles to recruitment and employment at the structural level.

Poor collaboration and coordination among public authorities can hinder employment for vulnerable groups (Højbjerre et al., 2023). In a study on the labour inclusion of refugees through internships in Norway, the employers interviewed highlighted three primary obstacles regarding co-operation with other actors in the integration process (Fedreheim et al., 2022). Firstly, they identified a lack of support from both authorities and employers’ organisations for facilitating internships among immigrant workers, as stipulated in the national Introductory Programme

This is part of the Introductory Programme, the so-called ‘fast-track’ (hurtigsporet). The fast track is a a tool in the Norwegian Integration Act, which is based on acquiring skills and resources that are transferrable to Norwegian working life. The fast track is intended to be a work-oriented course, to be integrated with Norwegian language training and other qualifying measures. It is a collaboration between NAV, the refugee service, adult education and relevant employers. The target group for the fast-track element consists of newly arrived refugees with an upper-secondary education or more, who are participating in the Introductory Programme and will continue to do so for up to six months, with the possibility of a six-month extension. In order to be relevant for fast track, it is important that the acquired expertise can be applied in practice on the Norwegian labour market.

. They pointed out the need for more structured, professional, and strategic collaborations with municipal welfare offices for the planning, training, and follow-up of internship programmes. Secondly, several employers view the provision of internships for refugees and subsequent employment as a societal duty, and criticise municipalities for their limited involvement in this mission. Thirdly, they emphasise that NAV and the refugee service do not work purposefully, and suggest that tailored training should be provided to businesses and individual workers who participate in teaching refugees the Norwegian language and culture. 

In Sweden, the Public Employment Service has been criticised for its limited contact with the business sector (Gottfridsson, 2017). The January Agreement of 2019 sought to address this by making private entities more responsible for preparing and matching job-seekers with relevant training and job opportunities. However, many companies expressed concerns over the effectiveness of this system, and referred to inadequate or ineffective partnerships with both the Public Employment Service and local municipalities (Svenskt Näringsliv, 2022).

Evaluating an individual’s formal and informal competencies and skills can pose challenges for employers, and may potentially hinder the employment of certain candidates (Baglioni, 2020). In a study of the Swedish context by Risberg & Romani (2022), the employers interviewed point out that difficulties in assessing competencies and degrees complicate the process of determining how well potential hires meet the skills requirements for available positions. In a Norwegian study, Søholt (2016) found that both employers and the Norwegian Labour and Welfare Administration (NAV) are uncertain about how to map formal and experience-based skills within the local immigrant population. In addition, a Norwegian study found that unfamiliarity with assessing foreign competencies led employers to opt for what they perceived as familiar, and therefore safe. This tendency was found to put immigrant applicants at a disadvantage (Bjerck et al., 2018).

The organisational barriers in this report refer to challenges that arise at a workplace, i.e. within the companies or organisations themselves, when attempting to employ immigrants. These barriers can be deeply rooted in an organisation’s structure, practices and culture. Some key organisational barriers include:

There might be a perception among employers that training or integrating immigrants is more costly than hiring local personnel (Lundborg & Skedinger, 2016; Risberg & Romani, 2022; Tent, 2021). For example, this is evident in the agricultural sector in Sweden, where companies show reluctance to hire immigrants due to anticipated higher initial costs and the belief that local workers are a more secure investment (Barth & Zalkat, 2022; Højbjerre et al., 2023).

While there are advantages to a diverse workforce, as highlighted earlier in this report, employers can also encounter obstacles when integrating immigrants into their teams due to language barriers or cultural differences. These challenges can negatively influence hiring decisions and hinder the integration of immigrants into the workforce. If not addressed, these challenges can evolve into significant management issues, which clearly illustrates the importance of effective diversity management practices (Bjerck et al., 2018).

Diverse workplaces require that managers and leaders cultivate an organisational culture that embraces diversity, in order to ensure that everyone feels valued regardless of their unique cultural attributes and resources (Fedreheim et al., 2022). Without a supportive environment, in the form of mentoring programmes, language training or cultural orientation, organisations may hesitate to hire immigrants due to concerns about providing adequate support. The lack of such measures can turn workplace diversity from a strength into an obstacle (Guillaume et al., 2017; Hofhuis et al., 2016; Turi et al., 2022). Søholt (2016) found that maintaining more conscious and open management practices can be challenging for smaller companies that do not have dedicated training departments, especially when these companies rely on new employees being able to quickly adapt and learn on the job.

Managerial attitudes significantly influence recruitment decisions and the integration of immigrants into the workforce (Abramovic & Traavik, 2017). Research indicates that managers are more inclined to support diversity practices if they align with their personal values and their experiences with specific ethnic groups (Risberg & Romani, 2022). The study by Bjerck et al. (2018) revealed that negative attitudes to hiring refugees among staff – and to some extent from customers, users and patients –can make employers hesitant.

Conscious or unconscious biases against immigrants can influence hiring decisions. Such biases can stem from stereotypes, negative perceptions or unfounded fears about these groups (Risberg & Romani, 2022). While discrimination can manifest at the structural and individual levels, the focus in this report is on its expression at organisational level, and how it affects both the employers’ hiring motivations and the employees’ employability.

Discrimination can occur during the recruitment, selection and career advancement phases. One form of discrimination is preference-based, in which recruiters and employers favour one group of job applicants (e.g. native-born individuals with local qualifications) over others, such as foreign-born candidates (Arbetsförmedlingen, 2017; Ravn & Bredgaard, 2021).

Another form of discrimination arises from perceptions and prejudices. Culturally based generalisations can lead to certain personality traits being attributed to individuals. For instance, a person from one cultural background might be perceived as a high-performing employee, while another from a different culture might be deemed less competent (Arbetsförmedlingen, 2017). For example, there are concerns among some employers that immigrants may not uphold the same work ethic as native workers; and various surveys reveal that certain employers believe that employees with refugee status are less motivated in the workplace (Fedreheim et al., 2022). In Norway, employers were seen to treat applicants differently based on their country of origin. In the study conducted by Birkelund et al.  (2020), employers sometimes drew conclusions about specific ethnic groups based on past negative encounters and the subsequent development of stereotypes. This perception-based discrimination extends to areas such as the immigrants’ education, training and professional experience, with foreign qualifications often perceived as being inferior to those of local candidates (Risberg & Romani, 2022).

Another example of prejudice-based discrimination is the assumption of poor language proficiency based on a foreign-sounding name (Arbetsförmedlingen, 2017) – a bias that puts jobseekers at a disadvantage. According to the Finnish Diversity Barometer (2016), 40% of interviewed HR professionals believed that a foreign-sounding name could impede a job seeker’s chances of getting an interview in Finland (Finnish Institute of Occupational Health, 2016). A survey of 1,046 entrepreneurs in Sweden conducted by Järvaveckan Research (2023) revealed that about 73% of all respondents indicated that poor Swedish skills negatively affected their hiring decision; 47% were negatively influenced by religious or cultural attributes; and 17% by Middle Eastern-sounding names during interviews (Järvaveckan Research, 2023).

The large-scale displacement from Ukraine brought to light several instances of discriminatory treatment based on race and nationality. While major companies and employers have expressed a willingness to provide jobs and training opportunities to Ukrainian refugees, this has sparked concerns about possible discriminatory practices against other immigrant groups (Berlina, 2022).

Individual barriers concern personal characteristics that influence immigrants’ employability as perceived by employers. These barriers can involve cultural aspects, values and the particular attributes that employers seek in potential employees. For immigrants, these challenges often concern language barriers and difficulties in understanding the company’s norms and culture. 

Studies looking at the primary obstacles to hiring immigrants often highlight an absence of local language proficiency. Lundborg and Skedinger (2016) observe that not only is a language assessment crucial, but some employers perceive any deviation from ‘Nordicness’ as a shortcoming. Certain employer groups tend to assume that inadequate local language proficiency directly correlates with decreased productivity in migrant workers (Baglioni, 2020). In Finland, Bergbom et al. (2016) note  that insufficient Finnish language skills hinder immigrant employees from moving to senior roles or undertaking more difficult managerial tasks. Similarly, a Norwegian study by Birkelund et al. (2020) identifies language barriers as the primary reason for negative hiring experiences with immigrants. The study highlights issues such as communication challenges during interviews and frequent misunderstandings between immigrant employees, clients, and their peers.

Bjerck et al. (2018) emphasise that language proficiency is crucial, particularly when interacting with customers, users and patients, as well as in relation to safety protocols and fostering a harmonious work environment. However, multilingualism also brings opportunities, especially given the growing diversity and multiculturalism of customers and user groups.

The 2022 survey among members of the Confederation of Danish Industry highlighted the important role of language skills in hiring Ukrainian refugees. Although one in ten member companies stated that they were able to offer jobs regardless of language and professional competencies, the majority considered language or professional skills essential for employment (Local Government Denmark & Dansk Industri, 2023).

In addition to inadequate language proficiency, lack of professional skills is another hindrance to hiring lower-skilled immigrants, as observed in both Norwegian (Proba samfunnsanalyse, 2018) and Swedish contexts (Arbetsförmedlingen, 2017). This issue is more evident for refugee women, who typically have fewer years of formal education and professional experience than men (Tent, 2021). As in the case of language, employers associate poor professional skills with lower productivity.

Employers may sometimes view immigrants’ cultural norms and values as being potentially disruptive to organisational performance, leading to an expectation that these job seekers should adapt to local values and standards (Dahlstedt & Vesterberg, 2017; Risberg & Romani, 2022). In workplaces in which conformity with written and unwritten norms is prioritised over diversity, employers might have the perception that employees with an immigrant background might not fit in well with the organisation’s culture.

As noted by Bjerck et al. (2018), some Norwegian employers viewed the perceived prioritisation of family responsibilities over work by refugee women as a barrier to their recruitment. As such, it is crucial to ensure that measures are in place to assist these women in navigating and balancing expected gender roles and caregiving duties.

Table 2. Overview of employers’ perspectives on benefits and barriers to the integration of lower-skilled immigrants into the labour market.