Labour market situation, structural changes and change security in Finland Outi Viljamaa June 20, 2011 NET@WORK A NET FOR EMPLOYMENT
Contents of the presentation Labour market situation in Finland Administrative reforms Change security Finnish model to tackle structural crisis in Finland
Labour market situation in Finland
Labour market situation Employment and unemployment in April 2011: Number of employed persons 2 458 000 (41 000 more than one year earlier) Employment rate 68,2% (OECD/ILO definition) Unemployment rate 8,2%, 220 000 unemployed (OECD/ILO definition) 47 000 new vacancies at employment offices (7 000 more than one year earlier) Source: Labour Force Survey, Statistics Finland
Labour market situation 75% of employees work under a permanent full time contract Some 15% of employees work under a fixed-term contract Women generally participate in the labour market, as full-time employees, their employment rate being 68,5 % Part-time jobs are not common; 21 % of all jobs are part-time Labour shortages and unemployment commonly occur simultaneously in Finnish labour market The demand for labour is concentrated around growth centres in Southern Finland
Unemployment rate in Finland, in EU and in the certain industrial countries, % 20 Standardised Unemployment rates, Seasonally adjusted 18 16 14 Finland EU USA Japan 12 10 8 6 4 2 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 10.9.2010/tyot13/TEM Source: OECD, Eurostat
Vacancies 58000 Moving average, 4 months 56000 54000 52000 50000 48000 46000 44000 42000 40000 38000 36000 34000 2004 2005 2006 2007 2008 2009 2010 2011 24.5.2011/avo_tk/TEM Source: Statistics Finland
Labour shortages Most problematic sectors: health care and services TOP 10 Shortages (May 2010) - sales agent - hairdresser/barber - registered nurse - cook/chef - sales representative - taxi driver - practical nurse - personal assistant - cleaner - doctor
Administrative reforms
Establishment of the Ministry of Employment and the Economy The new ministry was formed from the Ministry of Trade and Industry, the Ministry of Labour and the units responsible for regional development under the Ministry of the Interior The changes became effective from 1 January 2008 The most substantial administrative reform on governmental level in Finnish history The objective was to meet the challenges of the changing operational environment
The Ministry of Employment and the Economy Organisation STATE SECRETARY MINISTER OF ECONOMIC AFFAIRS PERMANENT SECRETARY MINISTER OF LABOUR STATE SECRETARY Strategy and Foresight Corporate Strategy Strategic Projects Research and Foresight Regional Development Regional Strategy National Development Programmes Structural Fund Policy Structural Fund Administration EMPLOYMENT AND ENTRE- PRENEURSHIP DEPARTMENT Entrepreneurship Development and Enterprise Support Functioning of Labour Market and Labour Availability Employment and Enterprise Services Intermediate Labour Market and Employability MEE Group agencies, institutions and organisations gy Market Authority Invest in Finland era Plc Finnish Competition Authority o National Consumer Research Centre Consumer Agency nal Emergency Supply Agency Finnish Tourist Board MEK AS Corporate Steering MP Reg. Admin. Steering (ELY) Steering and Structures Info. Man. Steering and Admin. Industrial Policy Co-ordination and Special Finance MP LABOUR AND TRADE DEPARTMENT Regulation of Working Environment Quality of Working Life Competition Policy Internal Market and Consumer Policy Business Law Better Regulation MIKES NBPR Tekes TE Centres Finnish Industry Investment Ltd INNOVATION DEPARTMENT Knowledge- Based Innovations Demand-Based Innovations Innovation Environments Growth Ventures Internationalisation of Enterprises and Export Mineral Policy ENERGY DEPARTMENT AS AS MP MP TUKES Employment and Economic Development Offices VTT State Nuclear Waste Management Fund Others Base Production of Energy Energy Markets Energy Efficiency and Technology Renewable Energy MEDIA AND COMMUNICATIONS MP HUMAN RESOURCES AND COMPETENCE DEVELOPMENT MP FINANCE MP DEVELOPMENT UNIT CO-ORDINATION OF EU AND INTERNA- TIONAL AFFAIRS AS ADMINISTRATION MP MP AUDITING NATIONAL CONCILIATORS OFFICE AS MP MP MP = Minister of Economic Affairs, Mauri Pekkarinen AS = Minister of Labour, Anni Sinnemäki
PES organisation PES and active labour market policy falls under the Ministry of Employment and the Economy, as part of the Employment and Entrepreneurship Department At the regional level 15 Employment, Transport and Environment centres (Ely-centres) At local level 74 Employment and Economic Development Offices, TE-offices (replaced the previous employment offices at the beginning of 2009 ) with 180 service units More emphasis on demand led approach
Employment and Economic Development office (TE-office) Meeting place for jobseekers, companies and employers Delivering services via: Internet, Contact Centre, face-to-face Services for enterprises Recruitments Tailored training Change security Regional enterprise services -network Enterprise services Services for jobseekers Services for job seekers Placements Labour market training Vocational Placements guidance Vocational Labour rehabilitation market training subsidized work change security Vocational rehabilitation Starting own Supported business employment Labour force service centre Intensive service for most disadvantaged groups in close cooperation with municipalities
Change Security Model
CHANGE SECURITY - PROFILE Co-operation model agreed between Social Partners and the Ministry of Labour Parties are the employer, the employee and the Employment and Economic Development Office (TE Office) The goal is to foster co-operation between the employer, employees and employment and economic development administration, to promote rapid employment and increase security during change Strengthening the early intervention: Employment services will be organised and provided already during the notice period
CHANGE SECURITY - PROFILE Change security involves: a right for the employee to benefit from an employment plan paid time-off during the period of notice, for instance for jobseeking 5-20 working days depending on the duration of the employment relationship and the length of the period of notice higher unemployment benefit a stricter obligation to the employer to provide information and negotiate; more effective TE office services
CHANGE SECURITY EMPLOYERS RESPONSIBILITIES To inform the TE office beforehand about the dismissals To inform the TE office about dismissed employees who are covered by the change security To prepare with the help of the TE office a common employment action plan concerning the redundancy situation in the company The range of services, how they will be provided etc.
CHANGE SECURITY - FOR EMPLOYEES Increases employees security in dismissals Supports a dismissed person in the job-seeking process Helps to find a new job as soon as possible Employment leave (5-20 days) with full payment during the notice period f.ex. for seeking a job, attending job interviews etc. Employment plan, an individual job-seeking plan in order to improve the employee s chances of finding employment, for example through training and traineeships Raised unemployment benefit (20 185 days) during the active job search, training or other active measures
CHANGE SECURITY TE OFFICE OFFERING Information sessions on employment services, education, benefits Job-seeking and employment services, labour market training, advice related to entrepreneurship, information on the start-up grants etc. Network of PES change security experts functioning locally, regionally and nationwide A fire brigade especially in the case of large-scale redundancies Contact person for companies
CHANGE SECURITY ASSESSMENT Model has been a success both in terms of improving cooperation in redundancy situations between stakeholders and in terms of activation and speeding up re-employment of those made redundant Model has acted as a positive cooperation platform between employers, unions, other regional and local actors and TE offices In SMEs the knowledge of the model is not always the best possible More effectiveness by ESF and EGF
Model to tackle structural crisis in Finland
The model to tackle local structural crisis In 2006, the government started Handle the structural crisis model which is proactive model to handle the structural crisis Public sector reacts immediately / proactively, main reasons: Avoid pressing the panic button Avoid the growth of unemployment Provide information about the business and labour market opportunities Boosts the development process RARE-working group (Reactions to the structural crisis) coordinates the package of activities. Key ministers meet as quickly as possible and decide on the range of measures.
Elements of the model today Local working group starts its work immediately, creates opportunities for new business and starts employment policy activities for those made redundant Local employment office opens a special unit for change security activities inside the gates of the factory; develops a personal plan and offer educational measures for those who are interested. Government can nominate the area as a region of structural crisis (normally for a 2 year period), in the state budget we have special resources for these activities (about 40 mil. euros/year), resources can be allocated immediately Companies and municipalities allocate their own resources.
Regions of structural crisis 2007-2011 Etelä- Pirkanmaa Forssan seutukunta Itä-Lapin seutukunta Siikalatvan seutukunta Nivala- Haapajärven Kaskinen Heinolan alue Salon seutukunta Vakka-Suomen Ylä-Pirkanmaan Kotka-Haminan seutukunta Kajaanin seutukunta Koillis-Savon seutukunta Saarijärven- Viitasaaren Keuruun seutukunta Jämsän seutukunta Joensuun seutukunta Keski-Karjalan seutukunta Varkauden alue Lappeenrannan seutukunta Imatran seutukunta Kouvolan seutukunta
Criterias for working model Ability to see the markets in a new way Ability to make rapid decisions Ability to allocate resources Effective management
Structural crisis activates a positive boost process and creates new opportunities!
THANK YOU FOR YOUR ATTENTION! outi.viljamaa@tem.fi