Does the new rental law not affect me and my company? -Imagine!

On October 1, 2022, new rules in the Temporary Employment Act came into force, which will be applied from October 1, 2024, and although many companies are approaching this date with concern, surprisingly few have taken action. According to the new law, consultants who have been temporary employed by the same client company for 24 months out of a 36-month period are entitled to permanent employment with the client company. This could have major consequences for many companies.

According to the Swedish Skills Companies, the staffing industry employs around 170,000 consultants in Sweden, and within the IT consulting industry, it is estimated that there are between 70,000 and 80,000 consultants. According to industry analyses, 10–15% of these consultants are hired out long-term in a way that makes them eligible for the new law. This means that 27,000–45,000 consultants may be affected, and it will not be possible to ignore it when it affects your own business.

What does this mean for you and your company?

Many companies have not yet set a strategy for how they will handle consultants who may be subject to the new law. At Upgraded, we have been talking to clients in both the public and private sectors over the past year to help them understand what the law means and how to act based on their long-term goals. Strategic planning is crucial, whether you choose to continue with your consultants or replace them after 24 months.

Consequences for consulting companies

At the same time, consulting companies are facing major challenges. They have invested time and resources in developing their consultants and building businesses around their expertise, but with the new law, these companies could risk losing their key people if client companies hire the consultants instead. This creates an imbalance. Many consultants do not want to be employed by client companies, but the law could force changes that entail high costs for both companies and society at large. Several consultants face an uncertain future where they risk losing their assignments and being replaced, not because they lack expertise, but because companies are taking the safe option before the unsafe option and terminating consultants as a result of vague legislation.

What can you do?

At Upgraded, we are equipped to help companies navigate the new reality we face. We have solutions to replace consultants who need to be rotated out, and we help consultants who are unable to continue their assignments find new opportunities.

The question is: How are you preparing for this change? Have you started to analyze how the new law will affect your company and your consultants? It is high time to act. The law is here and the companies that act now will be the ones that will survive this upheaval the best.