The Flexicurity Approach
Flexicurity is based on the approach that in the labor market, a balance should be achieved between:
Employees' Security – the ability of employees' to adapt to changes in the market that might affect them negatively, such as layoffs or wage cuts; and
Employers' Flexibility – the ability of employers to adjust the use of human capital – such as the number of people employed, salaries, working hours or training – to the market's changing needs.
The core of the flexicurity approach is the fostering of human capital, as a competitive edge in the global market – This approach is based on the understanding that it will be harder for a flexible labor market to develop a sustainable competitive edge unless it provides its workers with security in the form of developing their human capital. This is the source of the perception that sees security and flexibility as necessary and complementary factors in the global economy, rather than as opposing factors.
The need to possess a competitive labor market that provides its workers with financial security caused Denmark to develop the flexicurity model that combines flexibility with security. The Danish flexicurity model is comprised of four components: a flexible labor market, life-long learning, effective active labor market policies for weaker groups in society and a work-oriented welfare system. A number of member states in the European Union have embraced the notion of flexicurity while adopting it into their labor markets' special characteristics.