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.

October 2024 marks Cybersecurity Awareness Month, and this year’s theme is “Secure Our World.” This month, individuals and organizations around the world are encouraged to raise awareness about cybersecurity and take steps to protect themselves and their digital environment.

In today’s increasingly digitalized society, cybersecurity is more important than ever. From protecting personal data to securing critical business information, the threat landscape is ever-present. By following a few simple steps, we can all help secure our world – both online and offline.

Tips to improve your cybersecurity:

1. Use strong passwords: One of the easiest and most effective ways to protect yourself is to use strong, unique passwords for each service. Use a combination of uppercase and lowercase letters, numbers, and special characters. Use a password manager to keep track of them.
2. Enable two-factor authentication (2FA): 2FA adds an extra layer of security by requiring you to confirm your identity via a second method, like an SMS code or an app.
3. Be careful with emails and links: Phishing attacks, where malicious links or fake emails are used to trick users into giving up sensitive information, are a common method of cybercrime. Never click on links from unknown sources and be skeptical of emails that seem suspicious.
4. Update regularly: Make sure your devices, operating systems, and applications are always up to date. Security updates patch known vulnerabilities and help protect your devices from attacks.
5. Back up your data: Make regular backups of important files. If your computer is ever attacked by a cyberattack, such as ransomware, you can restore your information from your backups.

By following these simple tips, you can help create a safer digital world. Whether you are an individual or represent a business, it is important to prioritize cybersecurity and protect what is valuable online.

The new rules in the Temporary Employment Act that came into force on 1 October 2024 were originally intended to ensure the security of individuals working as staff in industry, but given their design, most service-oriented industries are covered. In recent months, we have seen several examples where consultants in the IT industry who have chosen to move to a job within a line organization have been dismissed from their new job only a few months into their new job. The fact that there is now legislation that “forces” consulting companies to offer employment or pay two months’ salary in the event of a longer commitment means that we should see significantly more examples where individuals leave a secure job with a consulting company to go to a line organization where the principle, as everywhere else, “last in” – “first out” applies. In this case, with the knowledge that the job offer is enforced by law, we should be able to see many more sad examples where individuals are thrown into unemployment within a short time of their employment.

Risks of permanent employment at the client company

1. Uncertain future with changing needs: Many people see employment in a line organization as a safe solution, but this is not always the case. If you get a permanent job with a client company, there is always a risk that your specific skills will no longer be in demand when the project you were hired for ends or if the company’s needs change. Companies may need to restructure, which can lead to you becoming redundant, being reassigned to a role that does not match your skills, or in the worst case, being laid off.
2. Lack of development opportunities: Becoming a permanent employee at a client company can also mean that you are stuck in a specific role or task for a long time. It can be difficult to develop your skills or advance if the company does not offer the right development opportunities. This can hinder your career development and make you less attractive in the job market in the future.
3. Reduced flexibility: As an employee in a line organization, you are tied to a company and must adapt to their long-term strategy. It can be difficult to change tasks, departments or get access to exciting projects. If you remain as a consultant through a consulting agency, you retain the flexibility to quickly change assignments and adapt your career to your own goals and interests.

Advantages of being a consultant through a consulting agency

The consulting role through a consulting agency has several advantages that should not be underestimated. You often have greater opportunities to build your attractiveness by broadening both industry experience and experience from different roles and positions as a consultant.

1. Greater security through continuous assignments: As a consultant through a consulting agency, you have access to many different assignments and if one project ends, the agency will help you find the next one. This provides a smoother workflow and reduces the risk of suddenly being out of work, which can happen in an employment with a line organization when the need for your skills ceases.
2. Opportunity for continuous development: As a consultant, you can work in different industries, with different types of projects, and for different clients. This gives you the opportunity to constantly expand your skills, gain experience from different work environments, and stay up to date with the latest developments in your field. This variety allows you to constantly grow professionally, something that can otherwise be difficult to achieve.
3. Stronger negotiating position: Consultants, especially through consulting agencies, often have better opportunities to negotiate compensation and terms. Because you offer specialized skills for specific projects, you can value your expertise and negotiate better compensation and benefits.
4. Flexibility and freedom: As a consultant, you retain the freedom to choose the assignments that suit you best and you can easily change direction if you wish. You can work with multiple companies, thus avoiding the uncertainty that can come with a traditional line-organizational position, where you are dependent on the success and needs of a single company. This flexibility is often one of the greatest advantages of being a consultant, especially in a changing job market.
5. Long-term security through the consulting agency: By working with a consulting agency, you gain access to a broad labor market and assignment opportunities. The company helps you find new assignments when a project ends, which means you always have a backup plan. This creates long-term security and reduces the risk of periods of unemployment.

Conclusion

By working as a consultant, you maintain the advantage of having access to several different assignments while minimizing the risk of becoming redundant or trapped in a role that does not match your ambitions.

Upgraded People continues its strong growth journey during the third quarter of the year and has a turnover of 1,217 million sek during the first 9 months of the year, a growth of 72.5%. In the 3rd quarter, the turnover reaches 376.5 million sek (236 million sek). The month of September is the strongest month in history in terms of turnover with a turnover of 163 million sek!

We experience that the market is gaining momentum, the request volumes are increasing, the time to decision from our clients is decreasing and the project initiatives are tending to become larger. We also notice that the request volumes for project managers and requirements managers are increasing significantly, which are early roles in customers’ project initiatives. This, together with a continuously increasing customer base, means that we are very positive about the end of the year and the start of 2025.

New business and assignments

We are continuing on the path we have chosen and during the 3rd quarter of this year we have been awarded new exciting assignments in both the public and private sectors. If we look at the private sector, it is primarily in the banking, finance, insurance and energy segments that things are moving the most. In the public sector, we are also noticing that inquiry volumes are starting to move from having been relatively low during the latter part of 2023 and the beginning of 2024. We are also noticing an increasing international interest in Swedish consultants, as the weak Swedish krona makes them very competitive in a global context.

Looking at technology areas, AI, Business Intelligence (BI) and IT security are the areas that have had the strongest growth in inquiry volumes.

Stronger brand

Upgraded is strengthening its position in the market and has ambitious goals for the future. By both attracting new customers and building on the trust of our existing customers, we ensure continued strong growth. In a competitive market, it is crucial to constantly develop our service portfolio in order to offer the market high-quality solutions that meet current needs. I would like to extend a big thank you to all our employees, customers and partners who make this impressive growth journey possible, and I look forward to the rest of 2024 and the beginning of 2025 with great optimism, says Birgitta Hedegård, CEO of Upgraded People AB.

About Upgraded

Upgraded offers the market tailor-made solutions to meet its clients’ unique needs and desires and has a focus on services that lead the digital transformation forward to sleeplessly take on the challenges and opportunities of the future. Upgraded’s clients are found in both the public and private sectors with resource deliveries in Sweden, Norway and Denmark with over 1000 consultants on assignment. We provide the right resource at the right time to enable our clients’ goals and visions for the benefit of the individual, organizations and society.

For more information:

CEO, Birgitta Hedegård

birgitta.hedegard@upgraded.se

Upgraded Gazelle company for the second year in a row! This is a feat that very few companies manage to achieve. Less than 1 percent of all Swedish limited companies meet the requirements to become a Gazelle company each year. Upgraded not only doubled its turnover during the measurement period, but also grew by a whopping 274%!

Sweden needs growth and the country’s entrepreneurs need inspiration, practical knowledge and strong role models. The Gazelle survey ranks Sweden’s most successful companies in 21 counties. The survey is based on the company’s four most recent annual reports. To be eligible for the title of Gazelle company, the following criteria must be met:

1. A net turnover exceeding SEK 10 million, according to the most recent annual report.
2. At least ten employees, according to the most recent annual report.
3. At least doubled its turnover, comparing the first and last financial year in the four-year investigation period.
4. Increased its turnover every year for the last three years.
5. A positive overall operating profit for the last four financial years.
6. In all material respects, it has grown organically, not through acquisitions or mergers.
7. Sound finances.

I feel enormous joy and pride! This award would not have been possible without our fantastic employees, customers and partners. We have managed to combine innovation, quality and a good corporate culture with commercial success. Together we continue to develop our business and look forward to an exciting 2025. It will be a year that will be about refining what we have, constantly developing ourselves and our customers to new levels, says Birgitta Hedegård, CEO at Upgraded People.

After the Temporary Employment Act has been in force for more than two years, discussions continue about its application. A new EU ruling on the law has recently been issued, but the question is whether it contributes to increased clarity or whether the confusion persists.

“To create clarity, it can be stated that the EU ruling is still somewhat unclear,” says Birgitta Hedegård, CEO of Upgraded People AB, one of Sweden’s fastest growing consulting agencies. “Anyone who was hoping for clear guidelines will be disappointed.” However, the ruling addresses the difference between staffing and service delivery. When it comes to IT consulting companies, it is common for them not to conduct an activity where consultants are hired out to work under the direction and control of the client company, which is an important aspect in assessing the applicability of the law. If a consultant is employed for other purposes or works with different types of service deliveries, the criteria of the law are not met.

The judgment particularly emphasizes what is meant by “control and management”. To be considered to be working under the management of the client company, the client company must both direct the work tasks, determine how the work is to be carried out according to the company’s instructions and rules, and supervise the work. In practice, this means that the entire responsibility for work management needs to have been transferred to the client company. The client company must then have both the competence and resources to manage the work, as well as the authority to do so according to the business agreement. In the current EU case, it turned out that the right to manage the work had not been fully transferred, which meant that the law was not applicable. This creates an interesting room for interpretation, especially for IT consultants who often work independently based on the entire competence base of the consulting company, where they follow the client company’s goals but decide themselves how the work is to be carried out. According to this interpretation, IT consultants are not covered by the Temporary Employment Act and client companies therefore do not have to offer the consultant two months’ wages or employment after two years of work during a three-year period.

What can consulting firms do? Birgitta believes that it is important to clearly specify in the business agreement how the services are delivered and who is responsible for management and working methods. However, she believes that further guidance from future legal cases in Swedish courts is needed to create greater clarity and finds it very regrettable that many clients now, fearing being forced to hire or pay two months’ salary, are instead choosing to terminate innovative projects.