Finnish IT industry talent fears amid government restrictions

Finnish businesses concerned over the immigration plans of the country’s right-wing government

Gerard O’Dwyer

Published: 07 Dec 2023 11:15

Finland’s technology sector has responded with deep unease to the conservative government’s immigration-based labour market proposals that threaten to curb the ability of companies to freely recruit foreign skills and talent.

Industry chiefs are openly expressing fears that the far-reaching anti-immigration policies emanating from prime minister Petteri Orpo’s right-wing administration have the potential to deter foreign talent from pursuing career opportunities in Finland. IT companies are concerned that the government’s restrictive labour market policies will also reduce their ability to hire top international talent across all continents.

Formed in June 2023, Orpo’s coalition government includes the Finns Party, an ultra-right-wing anti-immigration organisation that also opposes Finland’s membership of the European Union (EU). The Finns Party secured the second highest popular vote in the country’s April 2023 parliamentary elections, trailing just behind Orpo’s national coalition (Kansallinen Kokoomus).

The Finns agreed to join an Orpo-led coalition on the condition that it embraced the party’s core immigration and labour market policies. The Finns were rewarded with key ministries, including finance, international development cooperation and foreign trade, economic affairs, interior, justice, social affairs, health, transportation and communications. As a result, the ultra-right-wing party enjoys a significant grip on government policy formation in the fundamental areas of immigration legislation and labour market operations.

Labour concerns

For critical export sectors of the Finnish economy, including technology and engineering, the principal concern among industry leaders is that the restrictive labour market policies and new immigration-linked legislation that is set to be introduced by the Orpo government in 2024 could negatively curtail the capacity of companies in Finland to recruit the foreign talent needed to grow their domestic and international business operations.

The Orpo government has signalled its intent to adopt strict quota-based immigration rules and impose more rigid residency regulations. These initiatives, which are promised for 2024, would limit the scope for issuing work visas to skilled and semi- skilled international and non-EU persons interested in applying for skilled jobs in Finland.

Moreover, the Finnish government is considering the attachment of proficiency tests in the Finnish and Swedish languages to work visa applications. Rather than “import” talent, the Orpo government is looking to provide capital funding to achieve “domestic solutions” that can deliver the specialist skills needed by companies from an enlarged pool of home-grown IT talent.

The Orpo government’s immigration and labour market policies are also designed to make Finland a less attractive country for migrants. Finland’s budget for 2024 will cut direct spending on immigration support programmes by €250m. This is in line with reform initiatives that will halve the refugee quota and implement stricter criteria for residence permits.

“Unfortunately, we have ministers in our government undoing all the great work achieved through the decades to elevate Finland’s global image. These ministers are silently endorsing racism within new immigration policies and openly exhibiting hostility towards foreigners”

Riikka Pakarinen, Finnish Startup Community

In addition, the Finnish government is introducing a language requirement that will lower the amount of labour market subsidies paid to enterprises that hire immigrants possessing special residency work visas.

The government’s narrowing policy positions on labour movement could put Finnish companies at a distinct international disadvantage in the recruitment of important skills and “best available talent”, said Jaakko Hirvola, CEO of the Federation of Finnish Technology Industries (FFTI).

“What is unfortunate is that issues around the government’s immigration policies are harming Finland’s global image, which has traditionally been positive to recruiting foreign talent to grow potential in our companies and the economy itself. The damaging publicity from these controversies might be difficult to repair,” said Hirvola.

The FFTI has warned the Orpo government that inhibiting companies from recruiting outside Finland could endanger economic growth and harm Finland’s global reputation as an open and progressive Nordic nation within the EU.

The Orpo government, which opened a dialogue with business and industry leaders in October, claims new immigration policies will be primarily directed at limiting access by unskilled workers to Finland’s labour market. In September, the government rolled out an economic plan to create 100,000 new jobs.

However, the FFTI and Finland’s other major business organisations believe the government’s restrictions on the hiring of foreign talent will universally affect the ability of companies to recruit skilled and unskilled workers alike.

“Our main concern is focused on skilled foreign workers who may be considering moving to Finland, not to mention corporate executives considering investing in Finland. Finland has a high demand for skilled foreign labour. Over 40% of the companies in this country find it challenging to recruit the skills they need. We must develop policies that don’t impede the inflow of foreign labour,” said Hirvola.

Damaging skills shortage

The Finnish Startup Community (FSC), a technology hub for new innovative enterprises in Finland, has warned that curtailing the hiring of foreign talent threatens to undo decades of hard work by previous Finnish governments, as well as global Finnish corporate brands like Nokia, Kone and Angry Birds maker Rovio.

“Unfortunately, we have ministers in our government undoing all the great work achieved down through the decades to elevate Finland’s global image. These ministers are silently endorsing racism within new immigration policies and openly exhibiting hostility towards foreigners. This is an inexplicable and untenable situation that is simply embarrassing,” said Riikka Pakarinen, the FSC’s CEO.

Software Finland, the umbrella organisation for the software industry, has submitted a proposal to the government advocating a special exemption for skilled foreign workers and the establishment of a skills-based framework to bolster the availability of foreign-sourced talent within the national labour pool.

In its submission to the Ministry of Economic Affairs and Employment, Software Finland has further proposed the launch of local and regional skills training programmes for around 2,000 currently unemployed individuals with previous working experience in the IT sector.

The proposal includes recruiting 4,000 women to participate in Software Finland’s Mimmit Koodaa (Women’s Code) programme, with the aim of improving the diversity of the talent pool available to the country’s expanding software industry.

“Providing workforce training to these 6,000 individuals would bring Finland substantial benefits in the billion-euro range. We can offer this guarantee because the employment rate after Mimmit Koodaa training is as high as 90%,” said Rasmus Roiha, Software Finland’s CEO. Finland’s software industry currently employs 64,000 people.

The skills shortage in Finland is not just affecting the country’s biggest corporations. A survey conducted in August for Suomen Yrittäjät, a support organisation for the country’s small and medium entrepreneurs (SMEs), found that almost 50% of SMEs believe the government’s anti-immigration and restrictive labour market policies carry the potential to seriously damage Finland’s global image as a European economy welcoming to foreign skills and investors.

Although one in eight firms in Finland employ foreign labour, growth is being frustrated by persistent shortages of skills. Some 67% of SMEs affiliated to Suomen Yrittäjät employing five or more workers face workforce recruitment challenges, said Janne Makkula, Suomen Yrittäjät’s vice-president for labour markets and business legislation.

“Labour shortages are limiting the growth of up to 80,000 companies in Finland. There is enormous growth potential, but it remains untapped because of the skills deficit,” said Makkula.