A comprehensive report from the service sectors: Half of all companies have difficulties with recruitment, the share of foreign labour is growing in a third of all companies
According to the sector skill survey of the Service Sector Employers Palta, the Finnish Commerce Federation, the Finnish Hospitality Association MaRa and Finance Finland, half of the service companies in Finland have difficulties with recruiting competent labour. The sectors represented by the associations employ a total of about 1.3 million Finnish people, which is about two-thirds of the entire private sector.
Recruitment issues are a common problem in growing companies. Almost two-thirds of them report difficulties with recruitment. In the next 2–3 years, the number of personnel will grow in about 40 per cent of service companies. Managers from 1,120 service sector companies responded to the sector skill survey carried out by Innolink.
The most significant reasons for service companies’ recruitment issues are that there simply are no applicants (53%) and that the skills of the applicants do not meet the company’s needs (48%). The businesses that have the most difficulties with finding competent labour are accommodation and restaurants, and the same applies to different kinds of specialist positions in vocational, scientific and technical services, positions in administration and support services, and the retail sector.
The share of foreign labour will increase by 20 per cent in growing companies by 2025
According to the associations who ordered the survey, the worsening labour shortage cannot be resolved without labour immigration, because the population in Finland is ageing at a concerning pace. Without labour immigration, maintaining the current affluent society and level of services is not possible. According to the estimation of the Ministry of Economic Affairs and Employment, Finland will need 100,000 new foreign professionals by 2030.
Of the companies that responded to the service sector skills survey, over a third say that the share of foreign labour will increase in the next two to three years. The increase is predicted to be rapid, as the share of foreign employees is estimated to grow by approximately 20 per cent in the companies reporting a growing number of personnel.
At the moment, a third of service sector companies employ foreign employees. In the respondent companies, foreign labour accounts for 5 per cent of the total personnel, and in companies that reported a growing number of personnel the figure is 7 per cent. Furthermore, the share of employees with a foreign background and Finnish nationality who work in the industry is considerably higher.
The service sector skills survey was carried out by Innolink and it received responses from managers of 1,120 companies in the private service sector and the commerce sector. The material was collected via a combination of email surveys and telephone interviews in February–April 2022.
The service sector’s solutions for increasing the employment rate
Commerce and services are the largest private employers in Finland. They employ a total of 1.3 million people in Finland and the majority of all new jobs are created within them. The sectors currently have 72 per cent of all the vacancies in the private sector.
Service Sector Employers Palta, the Finnish Commerce Federation, the Finnish Hospitality Association MaRa and Finance Finland propose the following actions to resolve the labour shortage in the service sector:
- Make employment more profitable and facilitate companies’ employment processes
- Unemployment security should be made more motivating by grading the level of benefits according to the duration of the unemployment and by shortening the maximum duration of the benefits. The sanction protection based on occupational skill should be shortened from the current length of three months, because all work results in valuable experience and the shorter the period of unemployment, the better is the person’s chance of becoming employed again in the future. The costs of employing people should be lowered by promoting local bargaining, making the side costs of salaries more reasonable, and lightening companies’ administrative load by rationalising official obligations and monitoring and facilitating the processing of permits.
- Take the competence needs of the future into account on all levels of education
- The educational content of schools should be planned so that the communications and social skills are emphasised more. All levels of education, even universities, should offer study modules that focus on sales skills and the understanding of customers. The resources of vocational education should be allocated to working life teachers who support internships and apprenticeship training at SMEs.
- Accelerate labour immigration and the employment of those already in Finland
- Use the single-window principle to provide employers with support for international recruitment processes. Make the surveying of asylum seekers’ skills and employment opportunities the responsibility of the Ministry of Economic Affairs and Employment. The availability consideration should be abandoned. Additionally, the state should do everything it can to ensure that the foreign people already in Finland stay in the country. The teaching of Finnish and Swedish to immigrants and English-language education should be increased, especially in the degree programmes of sectors that are significant employers.
- Create flexible conditions for continuous learning
- In addition to learning that takes place at work, the working-life-based and easily accessible public services for continuous learning should be ensured. Effort should be made to create financing models that motivate higher education institutions and vocational education institutions to provide services of continuous learning in close cooperation with companies and working life.Continuous learning should be supported on a public digital service platform that collects every job seeker’s work experience, training and competence in one place and offers opportunities related to vacancies and updating education.
Tuomas Aarto, Director General, Service Sector Employers Palta, tel. +358 40 152 0073, email@example.com
Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 50 511 3189, firstname.lastname@example.org.
Timo Lappi, CEO, Finnish Hospitality Association MaRa, tel. +358 40 734 5549, email@example.com
Piia-Noora Kauppi, Managing Director, Finance Finland, tel. +358 20 793 4210, firstname.lastname@example.org
Further information on the survey:
Pekka Vuorela, Managing Director, Innolink, tel. +358 50 571 8804, email@example.com