Pilot encourages sole entrepreneurs to hire their first employee
The Government proposes an experiment to assess what impact recruitment subsidy would have on a company hiring its first employee. The experiment will examine whether financial support for payroll costs would lower the threshold for recruitment. The objective is to support business growth and promote employment. The pilot is scheduled to start on 1 March 2022 and last until the end of 2023.
The majority of businesses in Finland are sole entrepreneurs. According to Statistics Finland, there were about 190,000 sole entrepreneurs in Finland in 2020, which corresponds to 69% of all entrepreneurs.
“There are many sole entrepreneurs in Finland who have the potential to expand their business and become employers at the same time. The experiment will give us reliable information on whether financial support for payroll costs would encourage sole entrepreneurs to hire their first employee. The aim is to create a cycle of positive growth – work for a jobseeker and business growth for entrepreneurs, which in turn would lead to hiring of new employees,” says Minister of Employment Tuula Haatainen.
Companies to be selected by random sampling
The experiment is aimed at sole entrepreneurs and other companies where all employees are entrepreneurs. The experiment would target companies
- that have not had any externally recruited workforce during the 12 months preceding the experiment, and
- whose turnover in 2021 is at least EUR 15,000 but not more than EUR one million.
A test group and a control group would be selected from the target companies by random sampling. The experiment would be carried out in stages so that 3,500 companies would be selected to the test group in the first stage. If fewer than 900 of these companies took up the subsidy, an additional test and control group would be selected in the second phase of the experiment.
The maximum amount of recruitment subsidy for a single company would total EUR 10,000. The subsidy would cover up to 50% of the employees’ salaries for a maximum period of 12 months starting from the first employee’s employment relationship but no earlier than the date the subsidy was applied for.
Amendments to other acts to safeguard right of access to information
To ensure that the TE Office of Southeast Finland and the Development and Administration Centre of the ELY Centres and TE Offices (KEHA Centre) have the necessary information to carry out the experiment, the Government also proposes temporary amendments to the Act on Public Business and Employment Service, the Act on the Income Information System and the Criminal Records Act.
The Government proposal is included in the 2022 budget proposal and will be discussed in that context. A total of EUR 13 million is available for implementing the experiment.
Iiris Niinikoski, Special Adviser to the Minister of Employment, tel. +358 295 047 372 0295 047 372
Ville Heinonen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 047
Kirsi Hyttinen, Senior Specialist for Legal Affairs, Ministry of Economic Affairs and Employment, tel. + 358 295 048 263