The persistent labor shortage continues to challenge businesses, with 39% of companies reporting difficulties in finding new employees, according to the latest Entrepreneur gallup. Responding entrepreneurs and business representatives have proposed solutions such as increasing local agreements and shortening unemployment security periods. Currently, one in eight businesses employs foreign labor, and the majority believe their companies have sufficient language proficiency for such hiring.
Among companies employing five or more individuals, approximately 67% face workforce recruitment challenges. The issue is most pronounced in the industrial and construction sectors, where over half of businesses struggle to find suitable candidates.
The labor shortage appears to be a nationwide concern, with minimal regional variations. The most recent survey, conducted in March 2023, revealed that 39% of small and medium-sized business representatives reported labor shortages.
Furthermore, one in four businesses (26%) still sees workforce shortage as an obstacle to growth.
Janne Makkula, Director of Finlands Entrepreneurs, expressed concern, stating, "The labor shortage limits the growth of up to 80,000 companies in Finland. Enormous growth potential remains untapped. That's why we need changes in the labor market and social security system. Additionally, actions by companies, such as offering internships, play a vital role."
Proposed remedies include reducing ancillary labor costs and increasing workplace agreements.
Entrepreneurs who participated in the survey suggested several effective ways to alleviate the labor shortage, encompassing both regulatory reforms and internal company measures.
The top solution identified was reducing ancillary labor costs (48%). Other significant measures included increasing local agreements (39%), easing individual-based layoffs (38%), and simplifying fixed-term contracts (37%).
For businesses employing more than ten individuals, the most important actions to address labor shortages were reducing ancillary labor costs (63%), increasing local agreements (59%), easing individual-based layoffs (59%), removing the re-employment obligation (55%), and simplifying fixed-term contracts (54%).
Makkula commented positively on these suggestions, saying, "Entrepreneurs are proposing the very measures included in the government program. It's excellent that the government has swiftly initiated regulatory changes."
Offering internships (29%), increasing local agreements (27%), and enhancing cooperation with educational institutions (27%) received the most mentions among the company's internal measures to alleviate labor shortages.
However, only one in eight companies (12%) currently employs foreign labor, with the proportion increasing significantly with the size of the company. The industrial sector reports the highest percentage of foreign labor employment (31%).
Albert Mäkelä, an expert at Finlands Entrepreneurs, emphasized that work-related immigration is not a universal solution to all companies' labor shortages, citing the cumbersome recruitment process for small enterprises.
Approximately 10% of businesses indicated intentions to hire foreign labor, a lower figure than in a comparative 2021 survey. Meanwhile, 77% of respondents had no plans to employ foreign workers. Nonetheless, 54% of companies believe that facilitating the hiring of foreign labor should be a priority.
Mäkelä urged for streamlined and simplified immigration processes, especially emphasizing the need to abandon considerations of foreign labor availability. He noted, "When labor is needed immediately, companies can't afford to wait several months for a work permit. Immigration processes must be expedited and simplified."
The majority (71%) assessed their companies as having adequate language proficiency for hiring foreign labor, although there was a significant difference between the capital region (84%) and Northern and Eastern Finland (65%).
HT
