OECD on Finland: Easy to get another job

“The Finnish labour market model has proven to be fairly flexible. Dismissals are common, but a majority of displaced workers gain re-employment quickly. The Finnish labour market is effective from the perspective of the majority of its labour force.”

These assessments from the OECD’s new country report “Finland – Back to Work” have been highlighted by many commentators and the Finnish Ministry of Economic Affairs and Employment.

The OECD’s country report analyses the Finnish labour market, especially in terms of dismissals and chances of getting new jobs. It also investigates political measures supporting employment.

5.5 percent of Finnish workers are hit by mass dismissals and factory closures every year. That is a considerably higher proportion than in comparable OECD countries, especially Sweden.

Not older people and blue-collar workers

Five in six laid-off Finns find new employment within one year. That is comparable to Swedish figures. Perhaps it is not the labour market model that is flexible, but the labour force which is mobile, suggests the OECD.

There is room for improvement in the situation for older people (above 55) who are dismissed, and for the long term unemployed, according to the OECD report. 

Since the finance crisis it has become more difficult to find a new job, especially for blue-collar workers. There are also regional differences, and the labour force’s mobility plays a limited role. 

The employment minister finds support for own policy

The funding of public employment services is lower in Finland than in many other OECD member countries.

“It is useful to get fresh research data on how Finland’s labour market is doing on an international scale,” says Minister of Labour Jari Lindström (The Finns Party) in a press release.

He promises government reforms to unemployment benefits and employment services. These will make it more attractive to accept a job and it will give unemployed people better job seeking support, according to minister Lindström.

Activation or “forced interrogation" for unemployed

The OECD praises the new mandatory interviews at job centres which unemployed people must undergo every third month. OECD countries have had good experiences with this, Christopher Prinz tells the Iltalehti tabloid.

“We have noted that such meetings are especially effective for those who find themselves in the most difficult situation,” says Prinz, and refers to research from different countries. But the “forced interviews” are very controversial among unemployed people and the Finnish opposition. 

Finland’s unemployment benefit system are described as comprehensive and fairly efficient.

According to the OECD, it is not possible to make considerable reductions of benefits down from current levels, but people on benefits should be encouraged to work, for instance by sharpening their responsibilities when it comes to job seeking. This is something Finland is already doing, as unemployment benefits are being reduced and benefits which hinder people from accepting work are being removed.   

The reform leads to savings of at least 200 million euro worth of unemployment benefits. This is a measure which the OECD has recommended for Finland earlier.

”Finland could do more for laid-off workers”

The OECD report is not uniquely positive about Finland’s labour market. Finland could do more to help vulnerable laid-off workers, it says.

The OECD encourages Finland to focus more on public employment services and to aim resources towards identifying future long term unemployed at an earlier stage. Finland is criticised for shrinking resources of employment offices. 

There is almost no individual and face-to-face assistance once registered as a jobseeker, according to the OECD report. More intensive and individual support is needed, according to the OECD.

Layoffs not always positive

The use of temporary layoffs is criticised. Layoff schemes can help against unnecessary layoffs, but the procedure can also turn into an attractive option for employers to bring forward unavoidable redundancies. Layoffs can delay and make it harder for workers to seek and find new jobs.

Let employers carry more of the costs in order to avoid the possible over-use of that method, encourages the OECD

Mixed reception

The OECD report has had a mixed reception with Finnish commentators. Some write that they are happy top see that Finnish workers get support from abroad, since the centre-right government is more interested in supporting the rich and limit workers’ rights, as they see it. Others think it is always wise to do the opposite of what the OECD recommends.

But the labour market is also criticised for being slow and for giving far too much protection to employees, when companies are struggling. 

Helsingin Sanomat also highlights the fact that most unemployed people get a job on the same level as the one they lost. It is also clear that a high education level is very important for people’s chances of finding new jobs. 

A flexible and good labour market is built from the classroom and up, according to HS.