When the talk falls upon employment in Europe, flexicurity is a popular topic. The Danish labour market model is a good example of flexicurity in practice.
Flexicurity is made up of the special mix of labour market flexibility combined with social security. The purpose of flexicurity is to join various kinds of flexibility with different degrees of security.
In Denmark, the main focus is on security in employment and income combined with flexibility in relation to hiring and firing of workers.
There are four different kinds of flexibility:
- Numerical flexibility – adjustment of the number of employees
- Functional flexibility – flexibility between work tasks
- Working time flexibility
- Pay level flexibility
There are four different kinds of security:
- Job security: Remaining in the same job
- Employment security: Staying employed, but not necessarily in the same job
- Income security upon unemployment or illness
- Combination security: The possibility of combining work life and private life through, for instance, parental leave schemes and special schemes for senior employees
Employers and workers become willing to take risks
By combining flexibility and social security, both employees and workers become more willing to take a risk on the labour market. By increasing the security in connection with, for instance, job change, workers are encouraged to become more mobile in the labour market. Flexibility with regards to hiring and firing means that employers can afford being more risk-taking by, for instance, hiring employees who are alienated from the labour market.
Flexicurity exists on a number of different levels
Flexicurity may cover the labour market as a whole or only certain sectors or job types (such as temporary workers or older workers).
Different means may be used to apply flexicurity in practice, for instance legislation, individual contracts or collective agreements.