What’s with the talk of labor shortages in Finland?

For a long time, discussions about the labor market have focused on the labor shortages in Finland. In fact, the main reason the Finnish government is actively pushing for the attraction of foreign professionals to the Finnish labor market is this labor shortage. At the same, however, there is a large number of people who are unemployed in Finland. Even without the current Corona pandemic.

In this blog post, we’ll examine this paradox. We’ll first talk about how labor shortages and recruitment problems show in survey data. Then, we’ll talk a little bit about the reasons employers give for this paradox. We finish by discussing what this means for you as a job applicant.

How do we know shortages exist?

The ongoing Corona pandemic has clearly affected the Finnish job market negatively. In December 2020, there were 99 700 more unemployed people than in December 2019. From November to December 2020 the increase was 42 800 individuals. 13.6 % of the labor force was unemployed in December 2020. This is 3.8 percentage points more than the year before.

However, before the pandemic hit there was increasing evidence for the existence of recruitment difficulties and outright labor shortages in Finland.

The Ministry of Economic Affairs and Employment has examined recruitment activities of Finnish employers with the help of Statistics Finland for many years. They base their examination on interviews of thousands of Finnish business establishments. We base this examination on the report they published in December 2020.

Before the pandemic, the percentage of employers having difficulties finding suitable candidates to fill their open positions had risen to 44 %. The report states that this figure is the highest since they started tracking this in 1993.

The survey also asked whether the businesses that were looking for new employees had been unable to completely or partially find new employees. 19 % of those looking for new employees said they had. Also, that figure was higher in previous years.

In 2019, employers had the most difficulties finding kindergarten teachers, cooks, and mechanics.

So, before the pandemic, we had 56 % of surveyed business entities saying that they had been looking for new employees within the last 12 months. 44 % of them had had difficulties finding suitable candidates. And 19 % even said they had not been able to fill all or some of their open positions. According to the report, around 63 000 jobs did not materialize because employers were unable to find suitable employees.

This at a time when 6.7 % of the labor force was unemployed. 25.2 % of them had been unemployed for longer than a year.

Why do labor shortages in Finland exist?

For a couple of decades how there have been simultaneous talks of labor shortages and high employment rates in Finland. That apparent paradox generates plenty of discussions both in the media and online.

Depending on the speaker, the approaches to and explanations of this issue differ. Some might even say such a shortage is an illusion because so many people are without a job. Some are so for extended periods.

It is possible, however, to both have high unemployment numbers and labor shortages if, for example,

1. those unemployed don’t have the necessary skills for the open positions;
2. jobs and those seeking jobs are located in different parts of the country;
3. job seekers learn about open positions and employers of job seekers inefficiently; and
4. employers attract applicants unevenly due to, for example, differences in the quality of jobs offered.

Some of the reasons I list above are structural reasons. We won’t discuss those in this blog. Here we’ll focus specifically on the reasons employers give for their inability to find suitable employees.

How employers explain labor shortages in Finland

The same Ministry of Economic Affairs and Employment report I mentioned earlier also asked employers why they think they had problems finding suitable candidates for their open positions.

The report and the comments of the employers refer to job applicants in Finland generally. They do not refer to any specific group of applicants specifically.

91 % of the respondents blamed the qualifications of the applicants. These included lack of suitable education, work experience, social skills, language abilities, or other skills need at the job. In the private sector, employers mentioned these reasons particularly often.

In the municipal sector, factors related to the job itself were mentioned nearly as often. These factors include the location of the job, salary, and working hours. In the government sector, respondents thought these reasons were more important than applicants’ qualifications. 93 % of government sector respondents thought that job-related factors explained why they were unable to find suitable candidates.

In the private sector, an additional explanation relates to the personal qualities of the applicants. 67 % of respondents pointed at problems in the motivation and learning abilities of the applicants or in their ability to take initiative.

Overwhelmingly, the most serious problem the respondents named was the lack of suitable work experience. Nearly 80 % of the respondents said that was the problem. Next was the lack of suitable education. Just over 60 % named the personal qualities of the applicants as being the source of the problem. About 30 % of respondents pointed the finger at language skills.

Irrespective of the field of the respondents, they named the perceived lack of suitable qualifications as the main problem.

A closer look at these explanations

In a recently published study, Heikki Räsänen and Minna Ylikännö of the Ministry of Economic Affairs and Employment examined where new jobs had occurred in 2019. They also looked at recruitment problems a bit more closely.

They found that it makes a difference whether the job is an entirely new one or whether the employer is looking to replace someone.

Recruitment problems are more pronounced when employers are looking to replace someone. The researchers suggest that that is because in those cases the demands of the employer are more rigid and preset. Therefore finding a candidate that has all the required qualifications is more difficult.

Recruitment problems are least frequent when the open position is a new fixed-term position.

In every type of job, the lack of suitable work experience or education are most common reasons for not finding suitable candidates. Other factors, however, weigh differently depending on the type of position filled. When recruiting to completely new positions, the personal characteristics of the applicants weigh more heavily than in other types of positions.

What do these data mean for you as a job applicant?

In another one of Finnwards blogs, they told you the 3 important things to focus on when applying for a job in Finland. These were:

• showing your motivation for the job;
• your fit with the position and company in question; and
• establishing a presence in LinkedIn

The analysis by Räsänen and Ylikännö gives more tips.

It suggests that when you are applying for a job, you should know why the job is open. If they are looking for someone to fill an already existing job, chances are the requirements are stricter. Thus you should pay extra attention to showing that you tick all the boxes.

If, in turn, the position is completely new it is likely that the relative weight of your personal characteristics is more pronounced. These characteristics were, for example, your motivation for the job, your ability and willingness to learn new things.

This blog post was originally published on Finnwards.com, on June 4th 2021.

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Minna Franck is the co-founder of Finnwards. The mission of Finnwards is to help internationals thrive in their life in Finland. We offer career and transition coaching, cultural dexterity coaching, as well as career consulting to internationals looking to build a successful life in Finland. We also offer a wide selection of self-guided online courses about working and living in Finland.  For employers of international talent, we offer cross-cultural training and consulting services. Our head trainer Minna has a research background in cultural studies, but she also knows what expat life is like. She’s currently living one in Estonia. She also knows how to recruit foreign talent and how to manage on-boarding effectively. She is passionate about expat coaching and cultural training. She enjoys creating and delivering interesting and helpful online courses and training courses. She’s constantly writing blogs and creating other content for internationals and their employers. Her particular interests are expat spouses and just workplaces.