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10.1.2024 20:53

Business owners want clarity on furloughs, survey shows

A recent Yrittäjägallup survey shows that business owners consider the furlough system important but see it in need of much improvement.

Of small and medium-sized enterprises (SMEs), 39% have furloughed employees for a fixed or indefinite period in the past five years, the Yrittäjägallup survey finds.

The more people a company employs, the more it has used the furlough system. By sector, industry and construction have used furloughs the most. There have been few furloughs in professional services.

A total of 1,300 representatives of small and medium-sized enterprises responded to the Yrittäjägallup survey, which gathers SMEs’ views, at the start of November. Of these, 642 respondents represented employer business owners.

Employers consider furloughs an effect tool for responding to temporary reduction in work, in particular. Of companies with employees, 34% consider the furlough legislation clear and easy to understand. However, 49% of respondents disagree. Similarly, most respondents (52%) do not consider collective agreement clauses on furloughs clear or easy to understand, while 30% of respondents do.

“The furlough system is important to businesses, but there’s still room for improvement. What’s worrying is that many companies don’t consider furlough legislation and collective agreement clauses clear and easy to understand,” says Janne Makkula of Suomen Yrittäjät, the Finnish SME association, who is responsible for labour market affairs.

“Businesses particularly want a faster furlough process. The furlough notification period and codetermination negotiation process should be reduced, and other codetermination regulation requirements should be lightened,” Makkula says.

Of companies with employees, 46% agree that the furlough system contains traits that significantly or somewhat impede furloughing or reduce the intended effects. The key impediment factors were the length of the furlough notification period (63%) and the length of the codetermination negotiation process (59%). The larger the company is, the more it considers these factors impediments.

When there is less work to offer, 75% of employers think that the company could definitely or quite probably avoid terminating contracts if furloughs were easier for companies. In the opinion of 54% of respondents, the hiring threshold would be definitely or quite probably lower. These positive effects would be particularly felt in companies with larger headcounts.

“It’s extremely important for the Government to deliver on the parts of its programme promising to shorten furlough notification periods and codetermination negotiation periods and to raise the threshold for applying codetermination legislation to 50 employees. The system ought to be clarified and developed, because that will avoid terminations, lower the threshold to hire, and boost labour productivity,” Makkula says.

How the survey was conducted

A total of 1,301 representatives of SMEs responded to the survey, conducted by Veriana (formerly Kantar Public) on behalf of Suomen Yrittäjät. Of these, 642 respondents represented companies with employees.
The survey was conducted between 1 and 10 November 2023.
The confidence interval for the survey results is +/- 2.8 percentage points.

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