Finland is facing a paradox where unemployment rates are high, but at the same time, there may soon be a shortage of workers. This problem arises from several factors, such as changes in the economy, strong competition for skilled workers from other countries, and demographic shifts. Even though Finland continues to be celebrated as the happiest country in the world, it is very important to solve these labor market issues to sustain the economic and social well-being. Immediate action is needed to prepare for the future workforce and ensure economic stability.
Job growth and permit decline
Finland currently has high unemployment rates, but experts predict that there will soon be a labor shortage. A report from the Confederation of Finnish Industries (EK) says that jobs in green industries alone could create at least 12,000 new jobs every year starting in 2024. The total number of jobs could even double when considering the positive impact on related jobs.
Last year, there was a noticeable drop in applications for work-based residence permits, especially among specialists. This decline was about 24% compared to the previous year. The reasons include a weak economy, strong competition from other countries for skilled workers, and fewer applications from Russian citizens.
This decline could make it harder for Finland to attract and keep talented professionals, which is important for staying competitive. However, more specialists who are currently in Finland seem to want to stay longer, as indicated by an increase in applications for extended permits.
Future Workforce Needs and Immigration
Finland has been recognized as the happiest country in the world for the eighth year in a row. To maintain this reputation, addressing the future labor shortage is important. Starting in 2030, the number of people over 75 years old will grow significantly, creating a need for many work-based immigrants.
Recently, the Finnish Immigration Service (Migri) announced that they expect an increase in permit applications by 2026. Reports from the technology sector suggest that the economy has reached its lowest point, and growth is expected soon. These positive signs bring hope for more opportunities for work-based immigrants. Many other parties have also expressed positive outlooks in recent weeks.
Finland can look forward to a successful and sustainable future by taking proactive steps in recruitment and work permit processes. Effectively addressing labor market challenges will be vital to keeping the economy strong and maintaining its reputation as the happiest nation in the world.
Now is the time to prepare
Now is a good time to create policies, procedures, and support systems to welcome foreign employees and help them succeed in Finland. It’s not just about bringing people in – we also need to support them with relocation services, clear onboarding, and everyday guidance. Language is an important part of this. We should offer effective Finnish language training to incoming employees and also help their Finnish coworkers improve their English skills. This way, communication at work will be easier for everyone. With the right preparation, Finland can build a strong, inclusive, and future-ready workforce.
This outlook was written by Elina Koskela, the CEO of Finland Relocation Services. If you want to read more about Elina's views on global recruitment, relocation and immigration, visit Elina Koskela's LinkedIn page.