Employment services will be reformed on 1 January 2025 – Municipalities to be responsible for employment services with central government taking a guiding role

The structures and responsibilities for organising employment services will be reformed at the turn of the year. As a result of the reform, the responsibility for organising employment and integration services will be transferred to municipalities and employment areas formed by municipalities. The role of the central government will focus on guidance, development and the nationwide functioning of the employment service system.

Municipalities to assume responsibility for organising services

In future, municipalities and their employment areas will organise employment and integration services, which will enable the provision of services that meet local needs and strengthen regional vitality. Finland’s municipalities have formed 45 employment areas, which will start operating on 1 January 2025. Around 4,400 employees will be transferred to municipalities from the central government, mainly from TE Offices.

“Reforming employment services to promote the employment of jobseekers plays a key role in the Government’s efforts to improve Finland’s competitiveness and raise the employment rate. Municipalities will now have the opportunity to respond effectively to the mismatch problems on the labour market and to produce the most suitable solutions to promote employment locally. Meanwhile, the Government will continue to develop employment services in terms of the service process for jobseekers,” says Minister of Employment Arto Satonen.

Employment services will become a new central government transfer function for municipalities. This function will be financed through the system of central government transfers to municipalities for basic public services. Municipalities may allocate the funding as they wish within the framework of legislation. Due to the reform, the appropriation that would have been budgeted in the state budget for organising employment services had the central government been responsible for the function in 2025 will be added to central government transfers to municipalities in 2025. Going forward, funding will not be itemised but will evolve as part of the overall funding of central government transfers. Funding will be allocated by municipality based on the working-age population, unemployment and foreign-language speakers.

Central government is responsible for employment and employment service system

Employment and the functioning of the employment service system are the ultimate responsibility of the central government. The Ministry of Economic Affairs and Employment is responsible for the general guidance, development and supervision of employment services as well as for monitoring and evaluation.

Each government term, the Ministry prepares strategic objectives for the promotion of employment, which will be approved by the Government. The Ministry also monitors the annual achievement of national objectives, both nationally and by employment area. The Ministry’s work is supported by the National Advisory Board on Promoting Employment appointed for the government term. The Board monitors the functioning of the service system and addresses development needs related to the promotion of employment.

KEHA Centre supports the implementation of the national employment management service system and supports its effectiveness. In employment management, KEHA Centre focuses on information systems, guidance on unemployment security and knowledge-based management of employment and integration services. KEHA Centre produces information on the performance and effectiveness of employment services.

ELY Centres support the employment authorities by maintaining an overall picture of regional labour markets and by producing foresight data to support the activities of the employment authorities. ELY Centres organise annual cooperation and follow-up discussions for the employment authorities in their area.

Regional services responding to the needs of customers

The reform will bring employment services closer to customers with the aim of responding to regional needs. The primary objective is to increase employment with the help of services that meet the needs of both local private customers and employers. In order to support regional vitality, the reform seeks close cooperation between municipalities, companies, employers and other bodies.
Although the responsibility for organising employment services will be transferred to municipalities, the electronic service system JobMarket will remain in use. It will continue to provide services for both private customers and employers, and through it any matters related to job search can be attended to. 

Inquiries:
Tanja Ståhlberg, Chief Specialist, Project Manager, Ministry of Economic Affairs and Employment, tel. +358 295 047 025