New report by E2 Research finds: Access to Foreign Labor is a Critical Issue for Finnish SMEs

“There simply aren’t Finnish workers available.” (Property services company, South Ostrobothnia)

“Our productions are international — so of course we naturally aim to deliver the best quality. That means hiring foreign workers as well.” (Audiovisual company, Uusimaa)

For some small and medium-sized enterprises (SMEs), hiring foreign workers appears to be the only way to secure labor. For others, international recruitment is a strategic means to enhance competitiveness. The labor needs of SMEs vary by industry, but they share a common experience: the positive impact of workplace internationalization on business performance and workplace atmosphere. However, the workload and bureaucracy involved in recruitment processes place a significant burden on entrepreneurs.

These findings are presented in SMEs and International Recruitment: Experiences, Support, Solutions, a study conducted by E2 Research. The study involved interviews with 40 SME owners or executives from various sectors across Finland, all of whom employ foreign employees. The interviews explored experiences in hiring foreign personnel and collected best practices for recruitment, onboarding, and managing diverse teams.

The study serves as the flagship publication of the SMEs and Foreign Workforce in Finland (PIKEUS) project. The project consortium included the cities of Helsinki, Espoo, Tampere, Kuopio, and Lahti; Business Finland’s Work in Finland program; KIRA: the real estate and construction sector consortium; and E2 Research, which conducted the study.

Positive Experiences with Foreign Recruitment

“I admit, I was skeptical. I wondered how much effort it would take and whether we could make it work. The experiences have been incredibly positive.” (Care sector company, Central Ostrobothnia)

“Our decision to recruit internationally has given us an unbeatable competitive edge – we have employees.” (Forestry company, North Ostrobothnia)

The SME representatives interviewed for the study identified numerous benefits from hiring a foreign workforce. These benefits often addressed critical business needs, such as securing a workforce and expanding operations.

In sparsely populated areas, hiring international employees has sometimes been essential for business continuity, helping to preserve jobs for the existing Finnish staff and sustain local economic activity. “Our research shows that Finnish and international employees should not be viewed as opposing forces. Both are needed,” says project director Mari K. Niemi from E2 Research.
Other benefits included the ability to better serve diverse customer groups. Some respondents noted that hiring foreign employees enhanced innovation and improved the workplace atmosphere.

“From an economic perspective, it’s easier for us to find projects in different countries because we can offer design services in their native languages.” (Architecture firm, Uusimaa)

Some interviewees recognized that their companies’ international capabilities had improved, enabling them to better serve foreign clients and expand into new markets. “This study amplifies the voices of SME entrepreneurs in an unprecedented way. The benefits of international recruitment for companies are diverse, and they deserve strong support along this path,” says Development Manager Joonas Halla from Business Finland’s Work in Finland program.

Solutions for Improving Services and Enhancing Cooperation with Higher Education

“Kela [the Social Insurance Institution of Finland] informed us that processing a personal identity number would take several weeks or months. Let’s see when they get around to it. Until then, no bank account can be opened, no salary can be paid into the account, and no rental deposits can be made.” (IT company, North Karelia)

“It doesn’t work like that, where an employee has to drive 35 kilometers in the evening twice a week to attend Finnish language classes. That’s out of the question.” (Metal subcontracting company, Central Finland)

SME entrepreneurs provide support for their employees in many practical matters but would welcome more assistance. There is room for improvement in both finding services and ensuring their accessibility.

In Tampere, the value of international recruitment for businesses and regional vitality is recognized. “We joined the project because we want to develop our services by listening to entrepreneurs and responding more flexibly to diverse needs. The report provides us with tools for this,” explains Mari Taverne, Director of International Talent Attraction and Migration at the City of Tampere.

Collaboration with educational institutions is another area with potential for development from the perspective of SMEs. Many companies have yet to benefit from such partnerships. Development Manager Maijastina Setälä from the City of Lahti encourages the implementation of recommendations from the PIKEUS project. According to her, SMEs are ready to recruit and eager to collaborate with educational institutions. “It is essential to support the language development of international students and their connections with employers as early as possible.” This approach helps integrate students into the region and enhances their employment prospects.

Link to the report (in Finnish): https://www.e2.fi/PIKEUS-raportti

The original news was published on the E2 website on November 26, 2024.

More Information About the Study:

The SMEs and Foreign Workforce in Finland (PIKEUS) project aimed to support SMEs in their international recruitment efforts by examining companies’ experiences and sharing their good practices on a national scale. The project also provided recommendations for improving international recruitment services for businesses and enhancing cooperation with educational institutions.

Among the companies included in the study, approximately 40 % hire employees for positions requiring higher education, while about 60 % recruit for operational roles. The businesses represent 25 different industries, with many interviewees from fields such as architecture, property services, construction, healthcare, IT, agriculture, metalwork, hospitality, and textile maintenance.

E2 Researchis a multidisciplinary, independent research organization which provides research-based knowledge to associations, companies, foundations, municipalities, government ministries, politicians and the media.

For more information about the project and on the research results:

Mari K. Niemi
mari.k.niemi@e2.fi
+447737161944 (also WhatsApp)

Matti Välimäki
matti.valimaki@e2.fi
+358505430191