Agency work in Finland

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In this blog post, we discuss agency work in Finland. Agency work refers to a situation where a person is employed by a company that then hires this employee out to work under the supervision and direction of another company. 

This type of employment situation is an exception to the standard employment relationships we usually write about. Another example of non-standard work arrangements is platform work. We have discussed platform work in a few blogs like in this one here and this one here. Also, this blog is about platform work in Finland. 

We base this current blog on statistical data Statistics Finland released recently. Unless otherwise mentioned, this discussion refers to the situation in the second quarter of 2023. 

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Agency work has increased over the years

Ulla Hannula and Tatu Leskinen from Statistics Finland tell us that agency work has increased slowly over the years. Statistic Finland first started tracking agency work in Finland in 2008. Then, about 1 % of all employed persons in Finland were agency workers. In 2022, their share was 2.7 %.

This share is similar to that in Sweden where 2.8 % of all employed persons are said to be agency workers. The Finnish share is also very close to the European average of 2.6 %. In Europe, agency work is most common in Slovenia. There, the share of agency workers is 5.9 %. 

In Finland, the Covid years marked a small but noticeable change in the share of people engaged in agency work. Pre-Covid, the share of agency workers had slowly climbed to 1.9 % by 2018 and 2019. Then, in 2020 it dropped to 1.6 %. But, already in 2021, their share had risen to 2 % and then to 2.7 % by 2022.

Agency work common in industries where labor needs fluctuate

Agency work in Finland is particularly common in the hospitality sector (restaurants and hotels) where 8 % of the workers are agency workers. 

In the hospitality sector, labor needs fluctuate according to the season, day of the week, and even time of day. Therefore relying on agency employees makes sense. After the kind of crisis COVID presented for the sector, increasing this reliance to reduce employer risk even more starts to look like an understandable strategy for employers.

Hannula and Leskinen further explain that agency work is also relatively common in fields like property maintenance, cleaning services, and landscaping services. There, agency workers form 7 % of the workforce. Again, these are fields where the need for labor is seasonal. 

The share of agency workers is larger than the Finnish average also in logistics (5 %), and in wholesale and retail sales (4 %).

Agency worker demographics different from the overall workforce demographics

Men engage in agency work a bit more often (2.9 %)  than women (2.4 %). 71 % of men doing agency work were full-time employees in the second quarter of 2023. For women, the share of full-time employees was 45 %. 

These percentages differ from those of regular employees. Of men in regular employment relationships, 88 % were full-time. 76 % of women were. Especially for women, then, the difference is particularly big. 

In regular employment relationships, 80 % of women have permanent contracts. In agency work, only 58 % do. For men, the percentages are 85 % and 45 % respectively.

Demographics partly explain these differences. Agency workers tend to be younger than the workforce in general. 33 % of agency workers are between 15 and 24 years of age. Their share of the total workforce is 13 %. Also, 17 % of agency workers say that they are primarily students.

Agency workers also tend to be less educated than the general workforce. For 56 % of agency workers, their highest degree was from secondary education. This means either the Finnish high school diploma or a diploma from a vocational school. For all Finnish residents over 15 years of age, the corresponding percentage is about 40 %. 

Workers with a foreign background clearly overrepresented among agency workers

9  % of the whole workforce in Finland are persons with a foreign background. This term means people who themselves have been born abroad or whose parents (one or both) have been born abroad. In the second quarter of 2023, however, 24 % of agency workers have a similar background. 

The difference is clear. It is easier for people with a foreign background to find employment through agencies than directly with regular employers. Hannula and Leskinen note, however, that the same sectors that use agency workers the most also tend to have the highest rate of employees with a foreign background anyway. This includes, for example, the property management, cleaning, and landscaping services sector. 

One exception to this is the healthcare and social services sector. This sector employs 33 000 employees with a foreign background. And it has a relatively low agency worker rate. Only about 2 % of all employees in the healthcare and social services sector are agency workers.    

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