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News 29.04.2021

Flex your labour?

Finland is taking steps towards a more flexible labour market.

Recent developments in the Finnish labour market clearly increases Finland's attractiveness as an investment target.

Recently, there have been some changes to the Finnish labour market. Most notably, Technology Industries of Finland announced in March 2021 that its activities will be divided between two separate associations. Technology Industries of Finland will give up national collective bargaining activities altogether and the responsibility for national collective agreements will be transferred to a new employers' association, Teknologiateollisuuden työnantajat ry.

The new employers' association will start its operations in August 2021 and it will cooperate closely with Technology Industries of Finland.

And what does all this mean, then? – According to Technology Industries of Finland, the objective of the change is to further improve the conditions for workplace bargaining. At the same time, the aim is also to increase employee participation in the decision-making of companies.

Two roads to choose from

Under the new organisational structure, tech companies operating in Finland will have two alternatives for collective bargaining: a national or company-specific collective agreement. The goal is to promote workplace bargaining through company-specific agreements and by increasing the possibilities for local bargaining in national collective agreements.

The new structure enables Technology Industries of Finland and the new employers' association to better meet the service needs of different types of member companies, and the voice of the broad member base will be better heard, says Marjo Miettinen, Chair of Technology Industries of Finland.

"The change will speed up workplace bargaining," Miettinen says, adding that well-functioning local bargaining and company-specific employment terms and conditions are "increasingly important" in order for export companies to thrive on the international markets.

"The situations of companies vary greatly and the differences have only increased recently," says Miettinen.

We can work it out?

Petteri Rautaporras, Chief Economist at Technology Industries of Finland, says that de-centralisation of the bargaining system will strengthen the competitiveness of companies operating in Finland.

"Workplace bargaining gives the company a proper chance to find the necessary solutions in-house," Rautaporras says. "As no two companies are alike, it's a good idea to move away from 'one size fits all' practices."

According to Rautaporras, the formation of salaries in Finland has been problematic as well – especially when a major crisis, say, a global pandemic, suddenly hits.

"The old model insists that salaries should be unaffected by such economic shocks, when, in fact, it would be prudent to adapt a more flexible mindset in dealing with the problem. Looking ahead, we expect to see such salary issues to be resolved through workplace bargaining."

Forest goes first

Actually, Technology Industries of Finland is following in the footsteps of Finnish Forest Industries Federation (FFIF) who announced in the end of 2020 that it is abandoning collective bargaining in the Finnish labour market – and whole-heartedly embracing workplace bargaining.

Kaija Laitinen, Senior Advisor at Invest in Finland, perceives that these developments upgrade the labour market considerably. For companies, it is simply vital that they can be "quick on their feet" reacting to changes in the market situation.

"Extra flexibility has been on the wish list of international companies operating in Finland for a long time. We're glad to see Finnish industries moving very strongly into that direction – while workplace bargaining is, at the same time, increasing the participation of the employees in the company's decision-making," says Laitinen.

"These decisions in the forest and technology industries clearly increase Finland's attractiveness as an investment target."