Questions and answers on Työkanava Ltd

In accordance with the Government Programme, a new special assignment company wholly owned by the State has been established. The Government’s proposal for an act on a limited liability company called Työkanava Ltd and related acts was submitted to Parliament on 21 October 2021. Parliament adopted the act on 16 March 2022 and it entered into force on 1 July 2022. 

The company’s business operations will begin in stages during 2022. 

The Government aims to promote the employment of persons with impaired capacity to work and to develop the intermediate labour market. As part of this package, the Government decided to create a new target-oriented intermediate labour market operator business in Finland – Työkanava Ltd. It aims to improve the prospects of persons with impaired capacity to work and others in a vulnerable situation to enter the open labour market by offering them subsidised jobs as well as the training and other support they need for the transition to the open labour market.

Until now, those in the most difficult position have lacked a path from services to work, because they need a significant amount of support while they work. Työkanava will offer a new operating model for this.

Työkanava will begin to operate in stages by means of public funds allocated to it.

In the second supplementary budget for 2022, an initial capital of EUR 10 million will be allocated to the company from the Sustainable Growth Programme for Finland and another EUR 10 million in discretionary government grants. Funding for the following years has been reserved in the decision on central government spending limits, and Parliament will decide on the appropriations in the Budget annually. It is the intention that the sale of services would later generate at least one third of Työkanava’s revenue.

Matters related to the operational activities of Työkanava Ltd have been prepared by the Ministry of Economic Affairs and Employment together with stakeholders, such as organisations and companies.

Työkanava is a state-owned special assignment company that employs people with impaired capacity to work and other unemployed people who are in the most difficult labour market position. The company’s objective is to improve their labour market skills and other competences so that as many of them as possible would be able to transition from Työkanava to the open labour market.

Työkanava is primarily an employer that employs the people with impaired work capacity directly in an employment relationship and sells their work input to its customers. Työkanava sells to its customers subcontracted service packages that its employees (people with impaired capacity to work) produce. It is also possible to hire labour for the work required by customers.

Työkanava is wholly state-owned company. It is an ordinary limited liability company, the operations of which are regulated by legislation. It also carries the same risks as any other limited liability company. The Ministry of Economic Affairs and Employment is in charge of the ownership steering of the company.

The customers include companies, organisations, public sector entities and private consumers in need of labour. This is a way for the customer to show social responsibility.

It is likely that the operations will initially focus on sectors with a shortage of labour. This depends on the sectors in which Työkanava’s customer companies operate. As Työkanava concludes a contract with the customer company, operations will begin in the sector to which the company belongs.

The company will decide on its own business operations.

Työkanava will launch its operations in the form of pilots with a few customers that operate in different sectors. The purpose of the pilots is to gain an understanding of the business model’s functionality and scalability. The regions in which the piloting will start depends largely on the customer company and its needed labour input.

There are no companies operating on the exact same business idea or concept as Työkanava Ltd. For this reason, it is more appropriate to talk about cooperation partners instead of competitors. The company’s mission is not to take market share from social enterprises that integrate people into work or third-sector service providers. The company cooperates with them and may use their services.

Työkanava does not search for employees using normal job advertisements. The company reports open vacancies only to the Ostrobothnia TE Office, which has received a special assignment from the Ministry of Economic Affairs and Employment to assign employees to Työkanava. 

The Ostrobothnia TE Office finds suitable employees for Työkanava’s vacancies in the customer information system of TE authorities.  The customer information system includes those jobseekers that a TE authority in the TE Office or the local government pilot on employment has evaluated to be suitable for work at Työkanava. Suitability is assessed across Finland based on the same criteria laid down in the Act. 

When the Ostrobothnia TE Office finds a suitable person for an open vacancy at Työkanava, it will assign the person to Työkanava as an employee. Subsequently, Työkanava concludes an employment contract with the employee. In addition, the company as the employer is responsible for the orientation and training of the employee.

They are persons whose disability or illness significantly reduces their chances of finding employment outside Työkanava. It is also unlikely that employment services would help such persons sufficiently.

It is difficult to give a precise number of people with impaired capacity to work who may be employed. It is estimated that the number of such persons is likely to be between 50,000 and 60,000. Most of them are employed directly on the open labour market while others are employed with pay subsidy. It is estimated that about 30,000 could find employment through Työkanava. 

About half of them are currently registered as unemployed jobseekers at TE Services. The remaining 15,000 people receive disability benefits and are not currently customers of TE Services. Instead they are involved in community employment programmes, for example.  In order to find employment at Työkanava, they must register as jobseekers with TE Services.

In the early stages of its operations, the company is estimated to employ a few hundred people with impaired capacity to work each year. However, fewer people will be employed during the first year of operations in 2022. After the operations have been established, the company aims to have approximately 1,000 persons in an employment relationship.

Työkanava will develop the skills and capabilities of the persons it has hired to improve their capacity to work in the company. Beyond this, the intention is to use existing employment services or services offered by the Social Insurance Institution of Finland (Kela) and the social welfare system for additional upskilling. These services include support provided by a job coach or a work capacity coordinator.

The company does not provide public services. Instead, the purpose of Työkanava is to offer work. It serves as an employer to persons with impaired capacity to work who are in an employment relationship.
 
Työkanava strives to ensure that its employees receive the public services they are entitled to. Like other employers, Työkanava complements these services with services it organises itself, such as occupational health care. 

Työkanava’s task is to offer people jobs of a sufficiently long duration and to support people in the work. It also helps people with impaired capacity to work advance in their careers and find employment in the open labour market.

In practice, they can do almost any work. People with partial work ability have a wide range of skills and their educational background is broad and diverse.

However, the work tasks depend on Työkanava’s customers, i.e. the companies, corporations, public administration bodies and others who want to buy labour input from Työkanava.

Similarly to other employers, Työkanava Oy may provide skills development services itself or, if needed, purchase complementary services to develop the skills of its employees. Työkanava would primarily utilise public employment services for this purpose. 

Työkanava may also purchase upskilling services from other intermediate labour market actors, organisations and other service providers through competitive tendering in accordance with the Act on Public Procurement and Concession Contracts. In some situations, Työkanava may also produce skills development services itself.

People with strong business and management expertise will be recruited for Työkanava’s key positions. The board of directors of Työkanava has appointed Sari Nikkola as the company’s chief executive. She has started in the position on 1 September 2022. She will select the other key persons of the company.

The objective and budget were prepared on the basis of the information available at the preparatory stage. Based on a current estimate, in the early stages of its operations, Työkanava will employ a few hundred people with impaired capacity to work each year. However, fewer people will be employed during the first year of operations in 2022. After the operations have been established, Työkanava aims to have approximately 1,000 persons in an employment relationship. 

Both sound planning and business management will be required to achieve the aims set for the company.

The company will also have its own premises and going forward, it may expand to multiple locations. As a rule, however, the people with impaired capacity to work who have found employment through Työkanava will work in the customer’s premises. In this way, the activities are not tied to Työkanava’s premises.

The number of personnel in the company will increase as customer agreements are made. In addition to persons with impaired capacity to work, Työkanava needs management and support services. The size of this personnel will be determined by turnover and the number of persons with impaired capacity to work who will be employed.

The premise of Työkanava is that supporting work capacity is worthwhile and promotes equality, because meaningful work, income and a work community improve people’s sense of inclusion in society. Apart from the benefits for an individual, Työkanava’s purpose to offer work to the most disadvantaged people with impaired capacity to work carries social importance.

Although the company's operations are based on performance and targets, its objective is not to generate profits. Any profits will be used to develop the activities.

Työkanava Ltd is a wholly state-owned company under the ownership steering of the Ministry of Economic Affairs and Employment. The company provides Services of General Economic interest (SGEI) referred to in the EU state aid rules.

Työkanava’s operations also reflect corporate social responsibility in that they implement the obligations of the UN Convention on the Rights of Persons with Disabilities.

Customers of Sweden's Samhall, which partly serves as a model for Työkanava, even require that their customers cooperate with Samhall in exchange for purchases. This creates positive pressure on the operation of Työkanava and emphasises the importance of corporate social responsibility from the perspective of customers and consumers.

The performance of Työkanava can be assessed by examining how many persons with impaired capacity to work it employs and how many of them enter the open labour market. Similar to normal companies, Työkanava’s operations will also be assessed by means of turnover indicators.

The number of board members is consistent with that of any other limited liability company.
The board consists of persons with diverse skills and competences. This will ensure the company’s success in business.

Työkanava’s board will be chaired by Under-Secretary of State Elina Pylkkänen from the Ministry of Economic Affairs and Employment while Jukka Kinnunen, a retired chief executive, will serve as vice-chair. The other board members are Raimo Antila, Director General, Ministry of Social Affairs and Health; Sirpa Huuskonen, Vice President, Tokmanni; Essi Lindberg, Communications Manager, Labore; Jukka Lindberg, Development Manager, Vates Foundation; and Leena Munter, Chief Executive Officer, Haltija Group Oy.

There are several possible risks involved in the establishment and operation of Työkanava. These have been taken into account in the risk management plan. 

The company’s operative management is responsible for risk management together with the board.

Above all, the company will provide people with impaired capacity to work and most disadvantaged in the job market with experience in work and working life, and thereby enhance their labour market skills. Without the opportunities offered by the company, these people have little opportunity of finding employment in the open labour market.

Työkanava will also help companies that suffer from a shortage of labour. In this way, the company’s own employees can focus on core business. 

Many companies and communities can strengthen their social responsibility by cooperating with Työkanava.

The contribution of people with impaired capacity to work and people who are disadvantaged in the job market is needed to boost the overall employment rate. The Government aims to reach an employment rate of 75% by the mid-2020s. Työkanava also contributes to achieving this objective. 

The chosen approach is based on the proposal of rapporteur Hannu Mäkinen. He ended up rejecting, for example, the model for a job bank experiment because: “The experiment did not achieve the desired scale. The results for each target group were uneven. The level of transitions and personnel hire were remarkably low for persons with impaired capacity to work compared to their number in the job banks. Job bank services did not solve the employment challenges faced by groups that are the most difficult to employ.”

Samhall has worked successfully for around 40 years in Sweden, and it is one of the most important companies in Sweden.

There are currently no plans to establish subsidiaries for the company.

Työkanava cooperates with TE authorities, and people with impaired capacity to work seek employment at Työkanava only through the TE Offices. A person with impaired capacity to work who is interested in working at Työkanava must therefore register as a jobseeker either with the local TE Office or with municipal TE services if the municipality is involved in the local government pilot on employment. The suitability of a person to work in Työkanava will be assessed from 1 July when the Act on Työkanava has entered into force.

In other words, it is not possible to apply for a job at Työkanava directly, and job vacancies that people could freely apply for are not posted on Työkanava. Työkanava employs people with impaired capacity to work who are in the most difficult position and whose disability or illness significantly reduces their chances of finding employment outside Työkanava.

Different experiments and projects have shown that employers need a low-risk and easy way to use the labour input of people with impaired capacity to work. It is therefore important that TE authorities are able to identify the skills and different needs for support of persons with impaired capacity to work. Such information must also be linked to the services provided to both personal customers and employers. 

In connection with the operation of Työkanava, these issues are taken into account in TE authorities’ customer work in accordance with the Act on Työkanava.

The transfer of public employment services to the municipalities in 2024 will cause many changes in the structure and content of service provision. The organisation of current services to employers and businesses will also be reconsidered as part of these changes, similarly to the services of the state-owned special assignment company. In connection with the preparation of the reform, the services received by Työkanava Ltd will also be addressed.