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 will enter into force on 1 July 2022.

Työkanava’s operations will begin in stages after its operative management has been selected and the business activities have started. 

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 has decided to create a new target-oriented intermediate labour market operator business in Finland – Työkanava Ltd. It aims to improve the possibilities 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’s operations will be financed with an initial capital of EUR 20 million from the Sustainable Growth Programme for Finland (EU Recovery and Resilience Facility RRF). In addition, it will receive an annual appropriation of EUR 10 million in the form of government grants. The underlying idea is that at least one third of the company’s revenue would come from the sales of services. The aim is to apply for additional funding for the start-up phase from the Sustainable Growth Programme for Finland.

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.

The new special assignment company (Työkanava Ltd) employs people with impaired capacity to work and other unemployed people who are in the most difficult labour market position. The goal of the company is to boost their competences and labour market skills so that as many as possible could transition to employment in the open labour market and find work.

Työkanava is primarily an employer that employs the people 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 individuals for the work required by customers.

A state-owned special assignment company is an ordinary limited liability company, the operations of which are regulated by legislation. It will also carry the same risks as any other limited liability 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.

The sectors are yet to be chosen. The aim is to launch a pilot to test a few designated sectors in various parts of Finland. Operations are to be expanded once experiences have been accumulated. 

The company will decide on its own business operations.

Operations will be launched 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 to a great extent on the customer company and its needed labour input.

There are no companies operating on the exact same business idea as Työkanava Ltd. For this reason, it is better to talk about cooperation partners instead of competition. 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 would cooperate with them and possibly use their services.

•Just like any other company, Työkanava will recruit staff when it needs workers. In such a case, the employer and business services in TE Services will look for jobseekers that meet the criteria set by the customer company. The jobseekers selected by TE Services will meet the given skills needs specified by the customer company. What makes the selection special is that only people with impaired capacity to work will be nominated for the job and that the company cooperates with the TE Office.

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 Offices. 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 the early stages of its operations, the company is estimated to employ a few hundred people with impaired capacity to work each year. 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 could do almost any work. People with impaired capacity to work have a wide range of skills and their educational background is broad and diverse.

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

Similarly to other employers, Työkanava Ltd may provide such 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 first person to be recruited is a managing director. He or 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, the company will employ a few hundred people with impaired capacity to work each year. After the operations have been established, the company 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 physical location 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 also 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, which will ensure the company’s success in business.

The board will be chaired by Under-Secretary of State Elina Pylkkänen from the Ministry of Economic Affairs and Employment while chief executive (retired) Jukka Kinnunen will serve as vice-chair. Other members of the board 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 once the operations of Työkanava Oy have started.

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 afforded by the company, these people have little opportunity of finding employment in the open labour market.

Työkanava will also help companies that suffer from 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 will begin to operate in stages by means of public funds allocated to it. The underlying business idea is that in future at least one third of the company’s revenue would come from the sales of services. 

In the central government spending limits decision for 2022-2025, the company will receive an initial capital of EUR 20 million and an annual appropriation of EUR 10 million in the form of government grants for performing its duties. Parliament decides on the appropriations annually in the Budget.

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 Services are able to identify the skills and different needs of persons with impaired capacity to work. Such information must be linked to the services provided to both personal customers and employers. TE Services will consider these matters in the activities of Työkanava.

TE Services will identify those people who could be employed by Työkanava and find the persons whose skills and work capacity correspond to the tasks available in Työkanava. This, in turn, will considerably improve the situation of people with impaired capacity to work who are in the most difficult position.

Työkanava cooperates with the TE Offices, 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 enters 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.

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 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 the state-owned special assignment company will also be addressed.