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This paper aims to offer an analysis of the conflicting values behind Norway's much celebrated inclusive working life (IWL) programme, which aims to reduce sickness absenteeism, to increase the average age of retirement, and to hire functionally challenged persons. This article, moreover, presents sorely needed qualitative data from a preliminary study on IWL that shows how state‐owned enterprises have struggled to cope with the conflicting goals.

This is a qualitative study based on interviews with regional managers and representatives of the unions who had to adapt to IWL, and the results suggest possible explanations behind the disappointing numbers found by other quantitative studies on IWL.

Because of the decision to implement IWL, regional managers are caught in the middle of two different ideologies, namely, neo‐liberalism or new public management (NPM) and the welfare‐state ideology, and they find themselves making choices according to the former. This study on state enterprises at the local level has found that managers and union representatives appeared to support the intentions behind the programme, but they clearly prioritized productivity and efficiency over inclusiveness.

As the results are from a preliminary qualitative study of IWL that only included state enterprises, there is a need for further research that also includes the private enterprises.

This study finds that IWL is ineffective because it cannot harmonize the NPM and the welfare‐state ideologies.

This article helps to remedy the lack of qualitative documentation on the progress of IWL. These results also question the prevailing optimism over the potential of IWL by pointing to the ideological tensions between welfare and efficiency.