IDA's members receive the highest salary increases since the financial crisis

IDA's new salary statistics are released today and show that in average, IDA's privately employed members have received a salary increase of 6.5 percent in 2023. This is the highest increase since the financial crisis. In the same period, inflation was 0.9 per cent.

You can't have missed the numerous headlines or clicked through news sites without encountering a slew of articles discussing the labour shortage in Denmark – A labour shortage with a severe lack of qualified STEM professionals at its core.

The scarcity of STEM candidates also leaves its mark on salary trends, evident in the robust average salary increases for IDA's members in the private sector over the past year.

Privately employed IDA members get a good salary increase

For privately employed IDA members, the salary statistics for 2023 reveal an impressive average increase of 6.5 per cent. During the same period (September 2022-September 2023), Denmark's inflation rate has been 0.9 per cent.

Among IDA's members in the public sector, the average salary development has been 3.7 per cent. State-employed members have had an average salary increase of 3.4 per cent, while members in municipalities and regions have had a salary increase of 4.3 percent in average.

In the assessment period (May 2022-May 2023), inflation clocked in at 2.9 per cent.

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High demand translates to competitive salaries

"Engineers, science graduates and IT specialists are in short supply in many companies. Unemployment among our members has remained consistently low, and the latest forecast indicates sustained demand for IDA's members in the foreseeable future," remarks Malene Matthison-Hansen, Chairman of the Council of Employees in IDA.

"We're simply not training enough knowledge workers with STEM skills, and there's also a shortfall in attracting and retaining highly trained specialists from abroad. When a resource is scarce, prices rise. This dynamic influences salary trends, resulting in a favourable average real salary increase for our members in the private sector over the past year," she adds.

The salary development is back on track after high inflation

She points out that with an average salary increase of 6.5 percent in the private sector and thus a real salary development of 5.6 percent on average, many have likely recuperated a significant portion of the purchasing power erosion caused by last year's rapid inflation.

"Many members are back on track and have made up for lost time. But we are also aware that these are average salary increases. So, there are also members who continue to experience that their purchasing power is not what it was just a few years ago," says Malene Matthison-Hansen. 

Labour shortage to impact future salary levels

She anticipates that the shortage of highly educated individuals in IT, technology, and natural sciences will continue to influence salary trends in the years ahead.

"Our recently qualified members swiftly enter the labour market. The notion of academics being trained for unemployment in Denmark remains a myth, especially for IDA's member groups," emphasizes Malene Matthison-Hansen.

"There's intense pressure on the labour market for STEM graduates, resulting in many job openings. We regularly receive employment contracts via our legal advice services. While the good times seem set to continue for individuals, it raises concerns for Denmark as a manufacturing country and a knowledge society. Bottlenecks in various industries are detrimental to development, progress, and prosperity," she adds.

She encourages the companies that have unfilled positions to consider international graduates who have completed their education in Denmark and wish to remain. Simultaneously, she urges a more targeted focus on the most experienced forces in the labour market.

"When it comes to addressing the labour shortage, there is definitely something to be gained by recruiting international graduates. I would also strongly encourage companies to address the shortage by focusing more on their senior employees. We know that many seniors involuntarily exit the labour market due to dismissals when they reach a certain age. There's room for improvement, and senior agreements with increased flexibility are a viable tool to retain the most experienced staff keen on remaining in the workforce," concludes Malene Matthison-Hansen.