As population diversifies, Swedish firms start to as well

Like many European enterprises, Svensk Bilprovning faces a major labor problem as the country's graying population reaches retirement age: Over the next five years, it will lose nearly a quarter of its employees.

Magnus Ehrenstråhle, chief executive of the company, which conducts all vehicle inspections in Sweden, knows it will be tough to fill those positions with native Swedes.

"We have difficulty recruiting Swedes with the right background. Not enough people want to do this kind of greasy, messy work anymore," he says. "At the same time, we have people from other countries who can't find work even though they have technical experience. We won't make it unless we turn to these groups."

So Svensk Bilprovning has done something highly unusual for a Swedish company: It has crafted a diversity plan that requires all its regional offices to hire at least one non-Nordic trainee each year.

While American employers have long touted the idea that diversity is good for business, it's still a novel concept for many European companies. But Swedish employers, many labor-market observers here say, are waking up to the fact that first- and second-generation immigrants spend big money on goods and services – more than $30 billion a year, according to a recent study by Timbro, a Stockholm think tank founded and supported by an employer association.

Between 2001 and 2004, immigrants' buying power rose 9 percent, said the study, released last October. Consumption among immigrants from the Middle East and Africa – regions that will account for most of Sweden's population growth over the next decade – rose 30 percent.

"Employers want to capture this market, and they finally realize that they can't do so unless they diversify their workforce," says Ivan Daza, founder of an employment agency that helps immigrants find jobs. "There is still prejudice out there, but it doesn't weigh as heavily as business profits do."

Skilled migrants have it tough, too

Employers' growing interest in hiring immigrants is good news for residents like Hassan Sabik.

Fluent in Arabic, French, and Swedish, and with a teacher's certificate to boot, Mr. Sabik should be a hot commodity in a job market desperate for foreign-language teachers and Arabic translators.

Instead, Sabik is selling furniture in Rinkeby, a Stockholm suburb with high unemployment and small ethnic shops rarely visited by native Swedes.

"It's just hard to integrate into this society if you're an immigrant and speak with an accent," says Sabik, a Moroccan who's lived here for nine years. "The first thing I heard when I came here was that all immigrants get stuck cleaning offices or doing other menial jobs. So I decided to work for myself instead."

The Somali men sipping coffee at a local Rinkeby cafe echo that. Asked why so many of them can't find work, they describe an invisible wall that still separates many immigrants from Swedes.

With 17 percent of the country's 9.1 million residents now classified as having an immigrant background, Sweden has become one Europe's most diverse societies. Last year, a record 96,800 people immigrated to Sweden, just over half of whom came from outside Europe.

Sweden prides itself of its relatively generous immigration laws. Last year, 30,000 asylum seekers who were in limbo while appealing their deportation order – including 8,000 people in hiding – were given blanket amnesty.

But such benevolent government policies sometimes collide with a society that is still unwilling – or at least unprepared — to accommodate the newcomers, says Lena Nekby, an economist and immigration expert at Stockholm University.

She offers a laundry list of the obstacles that immigrants face in the Swedish job market.

Poorly trained job counselors

In addition to facing employment discrimination, newcomers are often placed in communities where there is housing but few jobs. Poorly trained employment counselors, weak networks, and a lengthy immigration process that can last several years also delay immigrants' entry into the job market, explains Ms. Nekby.

"We have a labor market that lacks knowledge about the skills and credentials immigrants bring," she says. "Many employers also feel uncertain about how these people will fit in socially."

That helps explain why 14 percent of immigrant youths and nearly 10 percent of immigrants overall in Sweden's booming economy remain unemployed, including many with university degrees. Only 4 percent of native Swedes were officially without work in March.

"We are wasting a tremendous amount of competence this way, and a lot has to do with the fact that Swedes still aren't used to interacting with people from other cultures," says Gabriella Nilsson Fägerlind, founder of a Swedish diversity-consulting firm. "There is still the sense that you 'don't know what you get' when you hire an Iraqi man, even if he has a Swedish technical degree."

One of the first major corporations to embrace the idea that a more diverse workforce could enable the business to tap into an increasingly diverse population's buying power is the Sweden-based furniture giant IKEA.

At its Kungens Kurva store south of Stockholm, nearly 25 percent of the workforce has an immigrant background. Employees hail from 60 countries and speak more than 40 languages, reflecting the community in which the store is located.

The global furniture empire has become a poster child of sorts for other Swedish companies that are now starting to dabble in diversity terminology.

"What we're after is knowledge about our customers and the languages they speak," said Henrik Dider, the IKEA store's human-resource manager. "And the more different our employees are, the more open they are to the needs of our customers."