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October 13th, 2013

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When Denmark’s largest companies need a CEO, they are increasingly going outside the country to fill the position.

This year alone, according to a Jyllands-Posten investigation, one out of every three major Danish firms has a non-Dane as its managing director. The figure marks a significant change from 2007, when the number of Danish firms with foreign executives was one in eight.

There are several reasons companies look for outside talent to fill their most high-profile positions. In Europe’s increasingly stalled economy, companies have made a paradigm shift in their hiring practices, preferring to scour the globe for the best candidate. Foreign candidates bring fresh ideas, a new set of contacts, and often a different managerial approach that can shake up a staid corporate culture.

Sabina Nielsen, a professor of international economics and management at Copenhagen Business School, stressed that the trend is not a repudiation of Denmark’s talent pool but rather a sign that a more globalised business climate has made it easier for companies to identify good managers and bring them aboard.

“It’s a trend that has definitely been observed,” Nielsen said. “The challenges of international business are increasing, and it’s ultimately about finding the best person for the position.”

Those challenges aren’t just limited to local markets anymore. Now a top executive needs to be nimble enough to navigate competition from emerging markets – a challenge many Danish companies have faced in recent years. Vestas, for example, brought in Sweden’s Anders Runevad partly because of his familiarity with Latin America, a region where the wind company was ceding market share to competitors like GE.

“You need to find people who have insight into other parts of the world,” said Tage Koed Madsen, a professor of international business at the University of Southern Denmark. “And this helps with customer and supplier markets. It becomes more and more necessary now to have this experience.”

Even as companies are increasingly looking beyond Denmark’s borders for top talent, however, the country’s immigration policies create barriers to importing candidates on a global scale.  

Despite changes in 2012 that eased some of the regulations for foreign workers, critics still say that Denmark lags behind other countries. The Consortium for Global Talent – which includes 18 of the nation’s largest companies – fears Denmark will face a shortage of highly-qualified foreign workers by 2020 and has advocated for making workers’ entry into the country less cumbersome.  

While Denmark has only just begun to experience a new era as an executive haven, many of its European neighbours have already fashioned reputations for being welcoming to foreign workers. A 2012 study by recruitment firm Guido Schilling estimated that 45 percent of executives at Swiss firms came from abroad, and the number was expected to grow to 50 percent by 2015. Germans fill many of these top-level jobs in Switzerland, similar to how Swedes have increasingly hopped over the Øresund to take Danish management positions.

Nielsen noted Denmark’s hiring trend is no different to how top-level football clubs fill their squads with elite talent from all over the world. Just like FC Barcelona always has its eye on the best emerging global talent, Danish companies need to be open to going beyond Denmark to find candidates.  

“Like any talent pool, the larger the pool, the better candidate you will get,” Nielsen said. “If the best candidate is local, then hire local. But you have to look all over the world.”