Abrupt structural change (ÄRM)
A sudden structural change refers to a situation where an employer or sector of regional or national significance makes redundant a large number of employees at once because of bankruptcy or extensive adjustment measures.
Various employment, economic and regional development measures that are specific to the situation aim to prevent a recession of the regional economy. These measures help create new jobs, renew old ones and promote re-employment of those made redundant as quickly as possible.
Local authorities and other actors carry the main responsibility for managing structural changes. If a region that is about to face a sudden structural change is well prepared for it, the measures introduced by the State and the region itself to manage the situation will be more effective.
Processes and roles of authorities
Some of the main phases of the process take place at the same time. The change security process supported by the TE Office will be launched immediately as agreed with the company. At all stages, the Ministry will have at its disposal current information about the process, measures and their effects.
1. After the company’s announcement of changes, the Ministry will immediately create a situation analysis of the impacts on the region and employment. This analysis includes a review of job losses in relative terms and planned measures.
2. Based on the criteria set out below, the Ministry will assess whether the situation will be managed regionally or whether a Government-level approach will be applied. The overall assessment will take into account the impact of the situation both regionally and nationally.
- A sudden change has occurred in the structure of business and industry, which threatens the regional economy.
- The number of redundancies amounts to several hundred, which has a critical impact on the region.
- The region has a potential to renew itself as a result of the continuous development of the industrial structure.
- Further measures and funding by the Government are considered important for re-employment and creation of new businesses and jobs.
3. Local authorities and company representatives will assemble a restructuring group to clarify the situational picture and formulate an action plan.
4. In addition to the municipality, local authorities and actors include regional councils, regional development companies, educational institutions, TE Offices and ELY Centres, with the latter serving as a central contact point with the Government.
5. The company begins the cooperation negotiations and submits the draft proposal to the TE Office. Decisions on possible business solutions and redundancies will be made at the end of the negotiations, which will last for at least six weeks. More detailed effects and measures required by the structural changes will only be specified after that.
6. Measures to support the re-employment and wellbeing of employees will start immediately. The regional TE Office will agree on practical arrangements for change security with the company. The TE Office mainly provides information and advisory services to employees during the cooperation negotiations. Any retraining and other services will start after the cooperation negotiations, which will determine the company’s own contribution to change security.
7. Local authorities will submit a common action plan to the Government. It includes proposed measures for the short and medium term to
- promote re-employment,
- create new jobs and renew old ones,
- support business opportunities and growth,
- improve the situation through other measures in different administrative branches (such as infrastructure, wellbeing and education), as well as
- a proposal for State funding.
8. The action plan will be discussed in relevant ministries. The Ministry of Economic Affairs and Employment will be responsible for coordination within the Government. Different channels and sources of funding will be used to finance the measures case by case. Funding already allocated to the regions will be the primary source of financing. Ministries can allocate any additional funding through supplementary budgets. The preparation and practical implementation of the measures often take many years.
9. The implementation of the measures will be monitored regionally and nationally.