Almost 40% of businesses suffering from labour shortage

Almost 40% of businesses having difficulty finding new employees, the Yrittäjägallup survey shows.

Business owners and company representatives who responded to our survey in August proposed steps such as reducing non-wage labour costs and increasing local bargaining as solutions to the labour shortage.

Around 67% of companies which employ five people or more have difficulties filling posts. The problem is most acute in industry and construction, where over half of the companies have difficulties finding employees.

The previous survey was conducted in March 2023, when 39% of small and medium-sized enterprise (SME) representatives also reported a labour shortage.

In addition, for one company in four (26%), the labour shortage is a barrier to growth.

“The labour shortage limits the growth of up to 80,000 businesses in Finland. A vast growth potential is untapped. That’s why we need changes to the labour markets and the social security system. The actions that businesses themselves take, such as offering internships, are also important,” Janne Makkula, a Vice President at Suomen Yrittäjät, the Finnish SME association, says.

The business owners who responded to the survey proposed several methods to reduce the labour shortage, both by reforming regulations and taking action in companies.

The most important method raised was reducing non-wage labour costs (48%). Other important means include increasing local bargaining (39%), easier dismissal on personal grounds (38%), and easier fixed term contracts (37%).

For businesses employing more than ten people, the most important steps to resolve the labour shortage were reducing non-wage labour costs (63%), increasing local bargaining (59%), easier dismissal on personal grounds (59%), removing the rehiring obligation (55%) and easing fixed-term contracts (54%).

“Our association proposed precisely the methods that the government programme includes. It’s excellent that the Government has started to rapidly prepare changes to regulation,” Makkula says.

Offering internships (29%), increasing local bargaining (27%) and increasing collaboration with educational institutes (27%) were most frequently cited as steps businesses themselves could take to ease the labour shortage.

One in eight employs foreign labour

Only around one in eight businesses that responded to the survey (12%) employs labour from abroad. The share increases rapidly with company headcount. The largest share is in industry (31%).

“Labour migration is not the solution for all businesses’ labour shortages. Recruiting an employee from abroad is a difficult process, particularly for a small business,” Albert Mäkelä, a lawyer at Suomen Yrittäjät, says.

Ten per cent of businesses say they intend to hire foreign labour, which is less than in the comparison survey in 2021. Of respondents, 77% do not intend to hire workers from abroad. Nevertheless, 54% of businesses says the hiring of foreign workers should be made easier.

“When labour is needed immediately, a business cannot afford to wait months for its employee’s residence permit to be granted. The residence permit process must be made quicker and simpler,” Mäkelä says.

“In particular, the labour market needs test for foreign employees should be scrapped. Even if a business finds a suitable foreign employee, it might be unable to hire them because of this test,” Mäkelä says.

Read the results of the Yrittäjägallup survey in more detail here.

How the survey was conducted

The Yrittäjägallup survey attracted responses from 1,207 SMEs between 9 and 16 August 2023.

The confidence interval for the overall results is +/- 2.8 percentage points.

The survey was conducted by Kantar Public Oy on behalf of Suomen Yrittäjät.

Are you a Suomen Yrittäjät member yet? Read more about member benefits and advantages!