Revisiting recruitment problems in Finland: data from 2020

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This week, the Ministry of Economic Affairs and Employment of Finland (TEM) published a report about employee recruitment in Finland in 2020. In it, they also talk about recruitment problems in Finland in 2020. Juho Peltonen of TEM based this report on interviews of Finnish employers conducted in 2020 by Statistics Finland. 

We have discussed similar earlier reports in some of our previous blogs. We have, for example, discussed why and how employers recruited in 2019. Our blogs about labor shortages in Finland and future employee needs are also related to this discussion. 

In our blog about labor shortages in Finland, we talked a little bit about how employers explain the recruitment problems they say they are facing. In this blog, we’ll dwell a little bit deeper into that problem. 

But first, a bit of background.

The reported prevalence of recruitment problems in Finland

Statistics Finland has tracked recruitment problems and reported labor shortages since 1993. Pre-Corona in 2019, 44 % of employers reported difficulties finding suitable employees. 19 % reported being completely or partially unable to fill open positions. These numbers were the highest reported since reporting began.

As we discussed elsewhere, the ongoing Corona pandemic impacted the Finnish labor market negatively. The reported job openings in 2020 fell by 11 % compared to 2019. Simultaneously, the number of job seekers rose by 38 %. 

Despite this, recruitment problems remained high in 2020. 40 % of employers reported having difficulties filling open positions. 19 % again reported having been completely or partially unable to fill their open positions. These numbers are close to the pre-Corona numbers of 2018 (41 % and 19 % respectively) and 2019. 

While the recently published numbers for the second quarter of 2021 show significant increases in the number of open jobs, they also show an increase in the number and share of jobs employers deem “difficult to fill”. 

In the second quarter of 2020, employers deemed 44 % of open positions difficult to fill. In the second quarter of 2021, this share was 58 %. It is thus likely that recruitment difficulties will continue. 

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Recruitment difficulties by industries in 2020

Overall, most industries reported fewer recruitment problems in 2020 than in 2019. 

The difference is particularly notable in the hospitality industry. In 2019, nearly 60 % of employers in that industry reported having recruitment problems. In 2020, their share had dropped to about 45 %. This is understandable considering the pandemic. 

In 2020, the industry that suffered from recruitment problems the most was the healthcare industry. 54 % of employers in that industry reported suffering from recruitment problems. In the healthcare industry, the drop in the share of employers reporting recruitment problems was the smallest among all industries. 

The only industry that reported more recruitment problems in 2020 than in 2019 was public services and education. There, the share of employers experiencing recruitment problems rose slightly from about 31 % to 35 %.  

Explanations for recruitment problems in Finland

In a previous blog, we briefly discussed the explanations employers gave for their recruitment problems in 2019. Here we will go into more detail.

In this survey, employers were asked why they were experiencing recruitment problems. They were given 10 statements to which they were asked to respond. The scale was “not at all” / “a little” / “somewhat” / “a lot” / “can’t say”. Employers were allowed to pick multiple reasons. 

Lack of competence by candidates is most often named the reason for recruitment problems in Finland

As in 2019, nearly all (92 %) of the employers reporting recruitment problems blamed it on the lack of competence by the candidates. Competence here includes a wide variety of attributes such as suitable education, work experience, language abilities, social skills, and other skills needed at the job. 

Although all employers experiencing problems named it as the main reason for their recruitment problems, there were differences between specific industries. 

Most commonly it was named by employers in the information and communication industry. There, nearly 100 % of employers experiencing recruitment problems gave it as the main reason for their problems. 

Employers in the transportation and storage industry named it least often. But even then, about 85 % of transportation and storage industry employers experiencing recruitment problems named it as the main reason.

There were only slight differences between different sectors. Government employers named the lack of competence as a reason for their recruitment problems a bit more often than the municipal sector employers. The private and third sectors were in between the two.

If we look at the different factors that make up competence, employers claim certain factors are more lacking than others. 

Most often (ca. 75 %) employers experiencing recruitment problems claim that candidates lack suitable work experience. About 71 % claim that candidates lack suitable education. 

30 % of employers experiencing recruitment problems named the lack of required language skills as a reason for their recruitment problems. About 73 % of employers who named candidates’ inadequate language skills as one reason for recruitment problems specified that it was the candidates’ lack of Finnish skills.

Just over half of them also mentioned candidates’ lack of social skills. 

Other named reasons for recruitment problems in Finland

Of all employers experiencing recruitment problems, about 74 % named job-related causes as a reason for recruitment problems. These job-related causes include such things as salary, location of the job, and working hours. 

About 45 % of them named salary as a cause. And just over 40 % named working hours. 

Particularly often job-related reasons were named by healthcare employers. In healthcare, job-related reasons were named almost as often as lack of competence by applicants. 

Employers in the third sector named these as the main reason for their recruitment problems. About 95 % of third sector employers experiencing recruitment problems blamed their problems on job-related factors. 

In the private sector, in contrast, only about 69 % of employers gave job-related causes as a reason for their recruitment problems. 

The third group of causes given for recruitment problems was reasons related to candidates’ personal qualities. These include motivation, learning ability, and the ability to take initiative. Over a half (ca. 57 %) of employers experiencing recruitment problems named these as a cause of their problems. 

With this cause, there was a clear difference between different sectors. About 63 % of private-sector employers experiencing recruitment problems blamed candidates’ personal qualities. Of municipal employers, only about 41 % did. 

Within industries, the highest percentages for this cause were among the manufacturing, hospitality, and forestry and agriculture industries (just over 70 % of employers experiencing recruitment problems). The lowest, in turn, were in public services and education (ca. 36 %) and healthcare (ca. 41 %) industries.

What to make of this

There are several points one can make based on these data. 

One point is that there seems to exist severe skills gaps in Finland. Thus we need to know where those gaps are and how to bridge them. 

This point is of course somewhat contradictory considering the rate of unemployment in Finland (we have discussed this briefly elsewhere) but it certainly is a point that has been made and acted upon. (We briefly mentioned the work of the National Forum for Skills Anticipation in this blog.) 

The result has been gearing up the Finnish educational system to meet those recognized or anticipated needs. Hence the government has enacted different types of educational reforms over the years.  The rather recent reform of vocational upper secondary education is an example of this. Another is an increased emphasis on continuous learning

Another point to discuss is to what extent these competence gaps and shortcomings in the personal qualities of applicants are real at all. Perhaps the problem actually stems both from the inability of employers to identify existing skills and competencies, and from the inability of job applicants to realize them and make them identifiable.  

There are public programs and actions to address this as well. Most of them focus on educating individuals on how to verbalize, make visible, and verify their skills and competencies. 

For example, in educational institutions, there is a new emphasis on personal skill recognition and development. 

There are also campaigns such as the upcoming Reveal Your Skills campaign by Sitra. That’ll take place next week and the week after. 

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