The OECD wrote last year that the job rotation scheme introduced in Denmark in 2006 has had “positive effects.” The organisation found that the scheme offered a viable solution to the problem of workers being absent for training purposes. A champion of “flexicurity”--a mashup of flexibility and security--the Scandinavian country of 5.9m has an unemployment rate of around 4.2%.

In Luxembourg, the Idea Foundation has taken up the idea and has suggested, in a recent issue of its publication Décryptage, that it be brought to the grand duchy.

Here are five relevant questions to ask.

1. What is the job rotation scheme?

As it has existed for nearly two decades years in Denmark, the job rotation scheme has two objectives. Firstly, to support the ongoing training of employees already in a post. And secondly, to encourage people who are registered as unemployed to return to work.

It works by having unemployed persons replace employees when they--the employees--are absent from the company for a long period of time for a training course. “This method allows the company to benefit from the new skills of the trained employee and to ensure continuity in the performance of regular tasks by a temporary substitute,” writes Ioana Pop, the economist at the Idea Foundation who wrote the article for Décryptage.

2. How (in more detail) does it work?

Job rotation, at least as the Danes do it, happens as follows: the employer advances the costs of a training programme to be undertaken by an employee, as well as the cost of their salary and that of their replacement.

A system of public subsidies then kicks in: the local employment agency (the equivalent of Luxembourg’s Adem) or the local authority pays the company an allowance for each hour worked by the replacement. The state pays 60% of this allowance.

The conditions for eligibility are minimal: the employer must not be in receipt of any other subsidy relating to remuneration; the employee must have been with the company for at least three months; and the replacement must have been registered as unemployed for at least six months.

3. What are the results?

“The net effect [of the job rotation scheme] on employment is very positive and it strengthens over time,” writes Pop, referring to a study conducted by the Danish Labour Market and Recruitment Agency in 2021. The survey showed that, one year later, people who had completed a replacement assignment were 1.2% more likely to be employed, rising to 4% after 18 months, 4.9% after 24 months and 5.8% after two-and-a-half years. The average duration of the replacement was 17 weeks.

Naturally, the employees who leave for the training programmes also have an impact. Three qualitative analyses--based respectively on trials in Aarhus, Randers and Norddjurs--show that the scheme has concretely improved staff skills while also providing an additional recruitment channel.

4. Why this proposal?

Pop cites the Danish example in support of what she describes as “a certain paradox” in the Luxembourg labour market. Namely, that the number of jobseekers with higher education qualifications is going up, but so is the number of jobs requiring higher qualifications.

By the numbers, between 2017 and 2023 the number of unemployed people with college degrees who were registered with Adem for 12 months (or more) increased by 35.9%, while for jobseekers with only a secondary school education that number rose only by 0.2%. For those registered for 7-11 months, the number went up by 50.5% for people with a higher education and 27.3% for those with a secondary education.

“Against a backdrop of rising unemployment, training for the unemployed and professional reintegration policies are also becoming increasingly important,” comments Pop. “Continuing training would enhance the employability of the long-term unemployed and reduce the vulnerability of employees, i.e., their likelihood of becoming unemployed as a result of current changes, such as increased digitalisation or the importance given to the environmental dimension.”

5. Does this apply to Luxembourg?

The Idea Foundation thinks so. Coupled with the draft law (tabled last year) on the introduction of a forward-looking employment and skills management programme, Pop points to a “win-win-win” for the job rotation scheme: it would enable (1) employers to make up for labour shortages during the long-term training of employees, (2) employees to acquire new skills and (3) the unemployed to benefit from work experience.

“Implementing such a model in Luxembourg would increase the chances of long-term jobseekers re-entering the labour market, by helping them to find sustainable employment, and would also strengthen the safety net by maintaining their entitlement to unemployment benefits,” says Pop.

“However,” she adds, “the implementation of this scheme would have to take into account certain administrative constraints linked to the company’s human resources policies and simplify them as much as possible. A rotation allowance would also be paid to the employer to help cover the employee’s training costs and the salary of the replacement.” The economist advocates adapting the scheme according to the local context and the needs of the Luxembourg labour market. She also suggests going even further than Denmark, by potentially extending the scheme to other groups like jobseekers with shorter periods of unemployment.

This article . It has been translated and edited for Delano.