Since the mid-1990s, Denmark has been doing very well financially. Unemployment was therefore only 2% at the end of 2008. Many economists believe that one of the reasons for this good achievement is a special balance between flexibility and security in the labour market - also called flexicurity.
The golden flexicurity triangle
Flexible rules for hiring and firing
Active labour market policy
High unemployment benefit
It may deter companies from hiring new employees if the rules for firing them again are too severe or cost the company too much money. In Denmark there are flexible rules for hiring and firing their workers. So when consumers buy a company's products and it is necessary to hire more workers to follow, the company can safely do it.
They can quickly fire the workers again if consumers stop buying the company's goods. Companies can therefore quickly adapt, depending on whether you need many or few employees.