Industry employers want to speed up work-related immigration
Published: 1 April 2003
Debate on immigration policy has continued in Finland in the light of forecasts of labour shortages in a few years time, when large numbers of workers retire (FI0209103N [1]). In December 2002, there were 103,700 foreign nationals in Finland, accounting for 2% of the population, which is the lowest percentage of foreigners among EU Member States. About 4,000 foreign employees work in Finnish industry, representing less than 1% of all employees. In March 2003, the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) published a survey indicating that its member firms support actions that aim at promoting work-related immigration in Finland. Firms that employ foreign workers regard the present work permit system as too bureaucratic. The greatest problems are that processing of work permits takes too long and the validity of the permits issued is too short. In the employers' view, the most important actions that are required to promote the immigration of foreign workers to Finland are easing administrative procedures related to work and residence permits for foreign graduates and foreign students in Finland, and family members of foreign employees.[1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/employers-seek-more-foreign-labour
In March 2003, the Confederation of Finnish Industry and Employers (TT) published a survey indicating that companies support actions to promote work-related immigration in Finland. TT member firms that employ foreign workers regard the present work permit system as too bureaucratic, with lengthy processing times and short permits, and want administrative procedures eased. The government submitted a new Aliens Act to parliament in December 2002, but there was insufficient time to discuss it before parliamentary elections took place in March 2003 and the proposal was dropped. TT urges that the proposal should be placed before the new parliament without delay. The new Act would make work permit procedures faster and more flexible, but does not meet all the employers' demands.
Debate on immigration policy has continued in Finland in the light of forecasts of labour shortages in a few years time, when large numbers of workers retire (FI0209103N). In December 2002, there were 103,700 foreign nationals in Finland, accounting for 2% of the population, which is the lowest percentage of foreigners among EU Member States. About 4,000 foreign employees work in Finnish industry, representing less than 1% of all employees. In March 2003, the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) published a survey indicating that its member firms support actions that aim at promoting work-related immigration in Finland. Firms that employ foreign workers regard the present work permit system as too bureaucratic. The greatest problems are that processing of work permits takes too long and the validity of the permits issued is too short. In the employers' view, the most important actions that are required to promote the immigration of foreign workers to Finland are easing administrative procedures related to work and residence permits for foreign graduates and foreign students in Finland, and family members of foreign employees.
The social partners have previously stated that the growing demand for labour in Finland should be met in the first place through domestic measures. They emphasise that in the Finnish labour market, Finnish terms of employment must be followed and all employees must be treated equally. (FI0105185N) According to the social partners, it is important that the forthcoming new government formulates its immigration policy carefully and takes a long-term perspective in its measures.
The government proposed a new Aliens Act in parliament in December 2002. Parliament did not have time to discuss it before parliamentary elections took place in March 2003, and the proposal was dropped. TT urges that the proposed Act should be brought to the new parliament without delay. The proposed legislation would makes work permit procedures faster and more flexible but does not respond to all the needs for flexibility that Finnish industry regards as important. The most urgent challenge for Finnish industry is to secure the availability of specialist employees. It is important for companies to be able to hire flexibly specialists from countries other than Finland.
Low employment rates among foreign nationals
About 75% of foreign nationals living in Finland are in working age, of whom 60% are in the labour force. The employment rates of foreign nationals depend on their skill levels - see the table below. About 59% of highly-skilled and only 38% of low-skilled non-EU nationals are employed in Finland. The corresponding EU averages are higher, at 66% and 45% respectively. The unemployment rate among foreign nationals is three times that of Finnish citizens.
| . | Finland | EU |
| High skilled (having completed tertiary education) | . | . |
| - Non-EU nationals | 59 | 66 |
| - EU nationals | 86 | 83 |
| Low skilled (less than upper secondary education) | . | . |
| - Non-EU nationals | 38 | 45 |
| - EU nationals | 50 | 49 |
One of the obstacles to employment among foreign nationals is a lack of knowledge of the Finnish language as well as a lack of sufficient skills required on the labour market. Against this background, the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) has been emphasising the need for active labour market policy to improve foreign nationals’ employability in Finland.
Work permit procedures
Labour recruitment from outside the European Economic Area (EEA) is regulated through work permit procedures. There are no quotas based on the occupation, line of work or nationality of the workers. The basis for issuing work permits is the need for labour. As a rule, a work permit must be applied for before entering Finland. In this case, an employer or a 'principal' starts the application process by asking for an opinion on the employment of foreign labour. This so-called work permit opinion is issued by an employment office. The opinion is based on the availability of suitable labour on the labour market and on an evaluation of the terms of the employment relationship. If the opinion is positive, the employment office can either send it directly to the relevant Finnish mission abroad or to the applicant. The Finnish mission (ie embassies or consulates) decides whether it will issue the residence and work permit after it has clarified the preconditions for the foreign worker to enter the country. If required, the mission will ask the Directorate of Immigration for an opinion on these preconditions. For foreign workers resident in Finland, the work and residence permits are issued by the local police or the Directorate of Immigration.
Family members of foreign workers do not have an absolute right to residence or a work permit. The application procedure for these permits can take a long time, several months in the worst cases. Family members of foreigners who have permanent residence permits in Finland are, however, exempt from work permit requirements. Students who come from outside the EEA cannot work full time during the term time. After graduation, students are in most cases expected to return to their home countries. Only after returning home can a foreign student apply for a Finnish work permit. About 60% of TT's member firms who had already recruited foreign workers believe that these regulations should be made more flexible. TT suggests that the new Aliens Act should not restrict unnecessarily family members’ residence and work permits. Furthermore, TT suggests that foreign students and graduates in Finland should be guaranteed a work permit. It finds it unreasonable that after the Finnish education system has provided free education to foreign students, they are obliged to return to their home countries after graduation.
Several groups of foreigners are exempt from work permit procedures. These include: those with permanent residence permits; students in respect of part-time work and holiday jobs; refugees and people receiving residence permits due to their need for protection; asylum-seekers who have been in Finland for at least three months; entrepreneurs; and teachers and researchers at universities. TT believes that the proposed Aliens Act does not sufficiently extend the group of foreigners who are exempt from work permit procedures. In this respect, the proposed new Act will not alleviate the recruitment problems related to foreign workers.
A work permit is issued for a limited period of time, usually for at least one year. A work permit can be issued for a shorter period of time, for example if the applicant has applied for a permit for a shorter period or if the employment contract is valid for less than a year. In the proposal for the new Aliens Act, there would be more restrictions on the maximum duration of the work permit than before. Also, the length of time required for granting a permanent residence permit would be doubled in the new Act. TT regards these changes as being in contradiction with the increased flexibility that the proposed legislation is aiming for.
The processing time for work permits depends on the extent of the clarifications needed for the application. Depending on the case in question, further clarifications may be needed for applying both for a work permit opinion from an employment office and for a residence permit from a Finnish mission abroad. The processing time depends also on the nature and duration of the work concerned. Missions usually ask the Directorate of Immigration for an opinion on residence and work permits. At its shortest, the processing time is a few weeks, and at its longest, a few months. About 60% of TT member firms find this procedure too bureaucratic. In preparing the new Alien Act, an important consideration in increasing flexibility in the work permit process was that, in future, applications will be handled electronically in the 'aliens register'.
In 2002, about 20,000 work permits were granted for foreign workers. About two-thirds of the work permits were granted for those entering the country for the first time and one-third for those already working in Finland. About 70% of the work permits were granted to Estonians and Russians. Most of the work permits are temporary. The highest share of work permits, 40%, are granted for berry-picking during the summer season. The second-highest share of work permits, 8%, are granted to employees working in the information and communications technology sector.
Commentary
In the light of forecasts of labour shortages in a few years time, it is clear that the government to be elected in spring 2003 needs to clarify the Finnish position on the question of immigration. In addition, it is necessary to create policy measures that improve the employability of foreign nationals presently living in Finland. It is widely recognised that the growing demand for labour in Finland should be solved in the first place through domestic measures. However, this does change the fact that an up-to-date immigration policy that is able to respond to long-run challenges of the labour market is needed in Finland. (Reija Lilja, Labour Institute for Economic Research)
Eurofound recommends citing this publication in the following way.
Eurofound (2003), Industry employers want to speed up work-related immigration, article.
