Minister of Employment: Employment package to boost employment and increase inclusion

Ministry of Economic Affairs and Employment 17.9.2019 19.18 | Published in English on 18.9.2019 at 16.02
Press release
Timo Harakka

“The Government has agreed in its budget session on significant investments to promote employment. A comprehensive employment package will boost employment and offer services that meet the individual needs of jobseekers,” says Minister of Employment Timo Harakka.

With the employment package, a greater number of persons with impaired capacity for work or long-term unemployment will be able participate in society through work, education and training or personalised services.

Quick-impact solutions to skills shortages will be sought in cooperation between the Ministry of Economic Affairs and Employment and the Ministry of Education and Culture.

“The goal of the employment package is to put Finland’s employment rate on a Nordic path and to systematically boost employment by investing in employment services, emulating practice in its neighbouring countries. We must do this to safeguard sufficient conditions for a welfare society of the 2030s,” says Minister Harakka.

“Key elements of the employment package were prepared in subgroups of the Ministerial Group on Employment Promotion. The subgroups’ contribution to the employment package has been significant, and the work continues at least until the government discussion on spending limits next spring. The work has only started,” says Harakka.

The Government will increase the appropriations for boosting employment, attracting international talent and improving integration of migrants by nearly EUR 300 million during the government term.

Employment services to meet individual needs

“Jobseekers are in very different situations, and that is why we want to make employment services more personalised. ‘One-size-fits-all’ solutions are not suitable for everyone, and services must be responsive to jobseekers’ individual needs,” Minister Harakka says.

Jobseekers must be able to start their job search in earnest as soon as possible after registering as unemployed jobseekers. Jobseekers’ services and their job search obligations will be based on personal employment plans.

“Our aim is that employment plans become a central tool for jobseekers. With the help of employment plans, employment services can better identify jobseeker’s skills needs and refer them more efficiently to other appropriate services, such as education and training,” Harakka says.

Jobseekers must commit to their personal employment plans and to the job search obligations or services specified for them. The model will be developed further for the government discussion on spending limits next spring.

“Support for individual job searching means that although jobseekers have more comprehensive obligations, the obligations are more humane than before,” Minister Harakka says.

To improve employment services, the funding for Employment and Economic Development Offices will be increased with an additional appropriation amounting to EUR 51 million over a four-year period. It will be mainly used to recruit more staff. In 2010, an additional appropriation of EUR 10 million will be reserved for digital services to strengthen the use of digital services in vocational and career guidance services that are based on the labour market situation, among other purposes. A comprehensive digital job marketplace platform is being designed to support the digital services.

Reform of pay subsidies to facilitate hiring in private and third sectors

The system of pay subsidies, which has been perceived as bureaucratic, will be reformed and its use by companies will be boosted. The aim of the new system is to increase jobseekers chances of finding employment on the open labour market and to achieve a sustainable increase in the employment rate.

“Our aim is to make pay subsidy a genuine path to a long-term employment relationship. That is why pay subsidy will include identification of skills needs and upskilling opportunities,” Harakka says.

The current third sector’s pay subsidy will be revamped to better support transition to the open labour market. In addition to pay subsidy, jobseekers’ work capacity will be assessed and they will receive individual support and other necessary services. The reform will come into force in autumn 2020.

Over EUR 77 million will be reserved for pay subsidies in the 2020 budget of the Ministry of Economic Affairs and Employment. This is EUR 24 million more than in 2019.

The Government will launch a recruitment support experiment to lower the threshold of sole entrepreneurs and micro-entrepreneurs for hiring the first employee. The plan is to start the experiment on 1 August 2010.

In Sweden, about half of the investment in employment services are targeted at pay subsidy, compared to Finland’s current five per cent.

Tailored training to facilitate employment and access to skilled labour

“Last year, 40 per cent of employers reported recruitment difficulties caused by a shortage of skilled labour. Studies show that continuing education, retraining and upgrading of qualifications, and recruitment training are an effective way of making skilled labour available to companies. Therefore, we will provide more financing for these forms of education and make it easier for companies to provide training,” Minister Harakka says.

In joint training projects, the employer plans the content of the training to ensure it meets the company’s needs, and the employer and the state share the costs of such training. A sum of EUR 4 million is allocated to enhance continuing education, retraining and upgrading of qualifications, and recruitment training in 2020.

To address the shortage of skilled labour, the Ministry of Education and Culture and the Ministry of Economic Affairs and Employment will urgently prepare proposals for intensive training packages to support the employed and those at risk of unemployment.

A reform of the adult education allowance system will be implemented to enable flexible part-time studies. In addition, the two ministries will set up a working group to change the apprenticeship system to ensure a better fit with the needs of young people and the needs of working life.

Local government trials aimed at providing jobs to the long-term unemployed

The Government launches local government trials in employment services. This involves assigning responsibility for the service process of a jobseeker included in a specific target group to the relevant local government. The purpose of the trials is to improve access to the labour market especially of those who have been unemployed for a longer period, and those in a vulnerable position in the labour market. The essential thing is to pool the resources of different sectors, such as employment, health care and education to optimally serve the jobseekers.

“Local governments already play a key role in promoting employment. In Tampere, for instance, the trial was able to significantly reduce the duration of an average unemployment period. Our goal going forward is to expand these impacts regionally,” Minister Harakka concludes.

Studies will be conducted to follow up on the results of the trials.

Inclusion promotes employment

Employment-promoting measures include a working capacity programme for people with partial work capacity to ease their access to employment.

“People with partial work capacity do not currently receive the services and support they need. Therefore, we will implement a working capacity programme that includes measures to identify the individual’s working capacity and measures to guide jobseekers to the support services they need. Pilot projects in the employment and economic development services and in health and social services will be launched to improve working capacity services,” Minister Harakka explains.

The number of work capacity coordinators in Employment and Economic Development Offices will be increased by 20 person-years.

As part of the programme, a condition will be added to public procurement contracts that will help to employ persons with partial working capacity and others with a vulnerable labour market status. The Ministry of Economic Affairs and Employment will also devise a strategy to improve the operating conditions of social enterprises.

“Employment is an integral element of corporate social responsibility in many companies. I am pleased to see that many emerging companies want to hire young people and people with partial working capacity,” Minister Harakka comments.

“Employment-promoting measures also increase inclusion. Access to employment is not always easy or straightforward. We need special measures to ensure everyone in our society is provided the right services that help them access employment, education or rehabilitation,” the Minister emphasises.

A total of EUR 33 million will be reserved for the implementation of the working capacity programme over a three-year period.

More resources for international recruitment and to Centres of Expertise in Immigrant Integration

The Government will launch an overall reform of labour migration and education-based migration with the objective of significantly increasing employment. During this government term, the objective is to have work-based residence permits processed within a time limit of one month.

A model for international recruitment will be created to attract top-level international experts and their families to Finland. Action will be taken to increase the retention of international talent, such as students and researchers. Similarly, measures will be taken to increase receptiveness and diversity in the workplace, and to benefit from international talent to support the growth of R&D activities and international investment.

“Finland needs more international talent. It is essential that those who have found a job in Finland receive work and residence permits for themselves and their families as quickly as possible. However, our ambitions are higher than that: we want to make Finland a world-renowned, genuinely attractive place for foreign experts,” Minister Harakka stresses.

The goal is to improve the availability of skilled labour and the matching of labour supply and demand, drive the growth and internationalisation of companies and RDI activities, attract investment, retain foreign students and researchers in Finland, and improve the recruitment and diversity skills of employers.

The Government will provide additional resources of 20 person-years and EUR 1 million to the processing of residence permits. Additional investments of EUR 5.5 million will be reserved for boosting international recruitment.

To further enhance international recruitment, tasks related to labour migration are transferred from the Ministry of the Interior to the Ministry of Economic Affairs and Employment.

The sum allocated to the integration of immigrants and the promotion of employment will be increased by EUR 11 million next year from this year. These funds will be used to expand the activities of multi-professional centres of expertise in municipalities, to widen the range of services offered in service points for immigrants, and to draw up a working life diversity programme to support the recruitment of immigrants.

Aiming for a 75% employment rate

The objective of the Government’s economic and employment policy is, in normal international and related domestic economic conditions, to reach an employment rate of 75% in the 15–64 age group in 2023. If this objective is reached and the global economic circumstances remain normal, Finland’s general government finances will be in balance in 2023.

In the autumn of 2020, the Government must be able to specify measures corresponding to 30,000 new jobs. An impact assessment of the employment package now decided on will be prepared during the autumn in collaboration between the Ministry of Economic Affairs and Employment and the Ministry of Finance.

“The employment package is the first stepping stone towards meeting the Government’s employment target. We are confident that the target will be reached,” Minister Harakka says.

A decision was made in the government budget session, under the leadership of the Minister of Labour, to appoint a group of researchers to explore ways of promoting employment and raising the employment rate.

Inquiries:

Ville Kopra, Special Adviser to the Minister of Labour, Ministry of Economic Affairs and Employment, tel. +358 40 826 1358
Tiina Korhonen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 7076 (pay subsidy, TE services, recruitment subsidy)
Kimmo Ruth, Labour Market Counsellor, Ministry of Economic Affairs and Employment, tel. +358 29 504 8073 (persons with partial work capacity)
Sonja Hämäläinen, Migration Director, Ministry of Economic Affairs and Employment, tel. +358 29 504 7112 (international recruitment and integration)
Jarkko Tonttila, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 0069 (local government trials)
Teija Felt, Labour Market Counsellor, Ministry of Economic Affairs and Employment, tel. +358 29 504 9080 (continuing education, retraining and upgrading of qualifications, and recruitment training)