Future developments in the Finnish labor market: short-term view

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This week, we are going to look at future developments in the Finnish labor market. We’ll take a short-term view in this blog post. In others, we’ve discussed long-term developments.  

This blog post is based on two recent Ministry of Economic Affairs and Employment (TEM) reports. They released one on the labor market forecast this week. They published the other focusing on aerial forecasts in September.   

We first start with some recent trends. Then we move on to the future developments in the Finnish labor market. We discuss, for example, what industries, in particular, will see increased employment in what area of the country.

Recent trends: particularly partial employment has risen

Last week in the blog, we discussed how the pandemic had affected men and women differently. 

We mentioned that particularly women are getting back to part-time jobs. The TEM report from this week also talks about this same issue: impermanence. 

It emphasizes that while employment numbers started to significantly improve over the summer, the improvement didn’t come in full-time permanent employment relationships. Rather, the growth has concentrated on employment relationship types that provide flexible options for employers to control the size of their workforce. These types of employment relationships include either fixed-term or permanent part-time jobs, or fixed-term full-time jobs. More people are also engaging with entrepreneurship than before the pandemic.  

Compared with pre-pandemic times in 2019, there is growth in all of these categories in terms of the number of people engaged in them. Instead, the number of people in full-time permanent employment relationships is still lower than before the pandemic.

Part-time jobs in Finland are heavily concentrated in certain industries. They are particularly prevalent in culture and entertainment, social and health services, warehousing and transportation, and primary production.  

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Looking forward: short-term developments in the Finnish labor market

That same TEM report points out that already in September the number of open positions advertised through the unemployment (TE) office was significantly higher than in September 2019. There’s been growth particularly in the number of jobs advertized by temping agencies.

During the pandemic, we were faced with news of layoffs and furloughs in many areas and industries. Now, those have been overshadowed by talks of labor shortages. 

According to the report, nearly 50 % of construction industry employers say that the growth of their industry is hampered by employee availability. For the service industry, this share is about 33 %. That is higher than it was before the pandemic. In the manufacturing industry, this share has also gone past the pre-pandemic level. It now stands at around 26 %. 

On the other hand, the share of people who’ve been unemployed for long periods of time remains high. Currently, about 40 % of those unemployed suffer from long-term unemployment.

We’ll now take a closer look at the situation in Uusimaa, Varsinais-Suomi, Pirkanmaa, and North Ostrobothnia. We focus on their future labor market developments. 

Developments in the labor market of Uusimaa

According to the TEM report from September, the number of open positions in the TE-office surpassed the pre-pandemic numbers already in June. In August 2021, there were 17 % more open positions at the TE-office than in August 2019.  

Most of these positions are in the construction and service industries. There aren’t any large construction projects in the Uusimaa area but there’s a lot of housing construction going on. There are also plenty of renovation projects. Those drive up the need.

During the pandemic, many service industry workers left the industry completely. Employers are now finding it difficult to get them to return. This has prompted discussions in the media about salary levels and working conditions in the Finnish service industry (eg. this Finnish-language YLE article from August). 

TEM also forecasts that the ICT industry will suffer from employee shortages in the near future. According to them, particularly experts in cloud services and web commerce will be needed. 

Also, the health care sector is in severe need of new workers in Uusimaa.

More specifically, a significant shortage of, for example, medical practitioners, early childhood educators, dentists, and nursing associate practitioners is predicted for Uusimaa. 

There’s also a shortage of different types of ICT professionals (eg. software developers, system analysts, application programmers) and construction workers (eg. bricklayers, stonemasons, floor layers, tile setters, painters). 

Southwest Finland

At the time TEM published its report in September, there were more open job ads in TE-keskus for Southwest Finland than ever before in the 2010s. The largest number of open jobs recently have been in:

  • construction;
  • manufacturing industry (excluding metal manufacturing);
  • healthcare; and 
  • sales.

In Southwest Finland, particularly the first three industries are facing labor shortages. 

In the technology and manufacturing industries in Southwest Finland, Valmet Automotive and Mayer Turku shipping yard are major employers. 

Particularly Valmet Automotive is continuing with its strong recruitment campaign. In the Salo region, they are aiming to recruit particularly local people but the Uusikaupunki plant is attracting employees from all over. 

Notably, Valmet also explains their pay structure on their webpages. As we have discussed, in Finland mostly IT companies are very open about the salaries they pay. Valmet is therefore a welcome exception to the generally rather depressing rule among the more traditional industries.

Southwest Finland also houses many pharmaceutical and health technology companies, such as Bayer, Orion, Biovian, Radiometer, and PerkinElmer (links here take you to their recruitment websites). Many of these have made or announced significant investments recently. Usually, these translate into new jobs as well. 

Specifically, Southwest Finland is predicted to suffer from the shortage of, for example, civil engineers, special needs teachers, construction supervisors, and employment agents.

Particularly bad the shortage is said to be for certain medical professionals, early childhood educators, and floor layers and tile setters.

Pirkanmaa

Also in Pirkanmaa, the number of open jobs has been high. 

The area has seen significant growth in the information and communication industry, and in finance and insurance. 

About 1 400 separate companies in various industries have made notable investments in software, machinery, equipment, and facilities in 2021. 

Industries that have reported recruitment problems in the Pirkanmaa region include healthcare, metal, electricity, construction, business services, hospitality, education, and some ICT fields. The report specifically mentions that salary policies play a role in this shortage. 

Specifically, there’s a shortage of, for example, painters and related workers, welders and frame cutters, healthcare assistants, and nursing assistance professionals. 

North Ostrobothnia

In North Ostrobothnia, 20 % of small businesses believe that in a year from now their personnel will be larger than it is today. 

Should the Pyhäjärvi nuclear power plant get its construction permit that would create a huge need for personnel in the area. There are currently about 450 people working in the area daily. During the construction project, 2000 – 2500 would work at the site daily.

The construction industry is one of the industries that suffer from employee shortages in North Ostrobothnia the most. Other industries are metal, mechanical engineering, ICT, and healthcare. 

Specifically, there is a serious shortage of specialist medical practitioners, psychologists, social work and counseling professionals, roofers, building frame and related trades workers, and cleaners. 

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