FROM MAY 2014's RECRUITER MAGAZINE

Despite having high unemployment, recruiters face challenges ranging from lack of talent, and competition with a generous social security system

With a population of 5.4m and just 16,600 open job vacancies at the end of last year, according to official government statistics, Finland is a relatively small economy. But that doesn’t mean that the economy and recruiters don’t face some big issues.

“There have been thousands of lay-offs in the last couple of years,” says Riku Mustajoki, sales executive, ManpowerGroup Finland. And with unemployment hitting 9.5% in March, according to Mustajoki the boom times of 2008 “are permanently gone”. 

Matti Vähäkuopus, vice chair of the Finnish Association for HR Management, previously vice president HR at Sodexo, agrees that companies are being “extremely careful at the moment” when it comes to hiring. “You have to know that you are going to get a return on investment before you hire,” he says.

The pressure on organisations to cut costs is also having an effect on who has responsibility for recruiting. According to Vähäkuopus, “there is a movement to outsource everything that is not part of the main business”. Following widespread outsourcing of payroll, he believes that recruitment is next in line. 

That said, he argues that in service industries, such as cleaning where a high turnover of staff means there is a need for a steady flow of new staff, retaining an internal recruitment capacity remains essential.

However, Susanne Skippari, head of talent management, KONE global HR, dismisses claims that external third parties have a significant role to play in the Finnish labour market. “Finland is not an agency market and it has never really been an agency market,” she says. And she continues to see a central role for HR throughout the recruitment life cycle of advertising jobs, screening and selection.  

Skippari says one exception is in the growing area of assessment centres. “Companies are starting to realise how big an investment recruitment is, and that we should really know what to expect from new hires, and assessment centres help with that,” she says. 

Despite the general sense that the Finnish economy is going nowhere fast, some areas of the market are flourishing, says John Nylund, head of Harvey Nash Recruitment in Finland. The country has a thriving technology sector, including the gaming industry, where a lack of local talent means bringing in people from abroad, he says. In contrast, he points out, in Finland’s older traditional industries of manufacturing, paper and pulp, “there is an over supply of workers”. 

Alongside its Scandinavian neighbours, Sweden and Norway, Finland has a reputation for progressive workforce policies and strong employment protection for workers. But for Mustajoki, the idea that it is difficult for Finnish employers to fire workers, and that this explains their reluctance to hire, is off the mark. “If there is a reason to lay off staff for financial reasons or because they are not being productive, it is quite easy,” he says. That said, Mustajoki says that staff that are laid off do have the right to be rehired by the company, in some cases for up to 15 months should suitable jobs become available.

Finland’s generous social security system has also come under the spotlight from employers, says Skippari. “You can have quite a reasonable level of living if you aren’t working, and for some people [in low wage sectors] there is no incentive to take a part-time job because sometimes they can earn more money by not working,” she says. 

Similarly, Finnish employers on the lookout for talent also face a reluctance of workers to relocate, says Mustajoki: “Employers really have to look for people locally because mobility is low.” And with a lack of local skills, this creates “a mismatch that is quite high”, he says. Such observations suggest that despite rising unemployment, employers in Finland don’t always have it their own way.

Key indicators

29,500 — the average number of open job vacancies during 2013  

23% of open jobs in 2013 were part time

43% of open jobs in 2013 were fixed term 

9.5% — the unemployment rate in March 2014  

-5.4% — the fall in industrial output in Q2 of 2014

0.4% — the rise in GDP in Q2 of 2014

Source: Statistics Finland

5.4m — population

69% of people aged 15-24 have a paid job

71% of men are in paid work compared with 68% of women

1,684 is the average number of hours people work, less than the OECD average of 1,776 hours

6th out of 65 countries for the reading literacy of its secondary school students

Source: OECD 2013 (Organisation of Economic Cooperation and Development)

Colin Cottell