Finnish regions to start pilots on more flexible labor market tests

Finland's regional centres for economical development (ELY Centres) will launch a regional experiment on more flexible labour market tests that will introduce common guidelines on work permits in selected areas.

According to the Ministry of Economic Affairs and Employment, this is expected to increase labour mobility between regions and ease permit processes related to foreign workforce. But the pilot does not mean that labour market tests will be discontinued, the Ministry says.

Labor market test, as defined by the European Commission, is "a mechanism that aims to ensure that migrant workers are only admitted after employers have unsuccessfully searched for national workers." The term 'national workers' also applies to citizens of other countries of the EU and the European Economic Area (EEA) and even to legally residing third-country nationals with access to the labor market according to national legislation.

However, according to the EU regulations, member states are entitled to apply different methodologies when undertaking the labor market tests.

The Finnish Ministry of Economic Affairs and Employments explains in a statement that in Finland labour market test means in practice that, upon receiving an application for a Finnish residence permit from a foreign worker, "the TE Office determines whether a worker already in Finland could fill the vacancy."

"The purpose of the test is to support the employment opportunities of labour already available on the market, but not to prevent the recruitment of labour from abroad," the Ministry says.

Shortage of workforce

The Finnish ELY regions of South Ostrobothnia, Ostrobothnia, North Ostrobothnia and Kainuu have been selected as pilot areas for the flexibilization experiment of this mechanism, which will start this autumn.

In this clearly defined geographical area, business subcontracting chains cross the boundaries of the ELY regions and employers need flexibility in placing their employees. A shortage of skilled workforce has started to impede growth in the region and the need for workforce and international experts is expected to grow even more in the next few years.

A more flexible labour market test will support immigration of skilled labour, because the ELY Centres can together determine the need for labour by occupation in the pilot area, taking into account the economic outlook. If metal industry, for example, were defined as a sector suffering from labour shortage, the labour market test would be equally moderate throughout the area during the pilot.

In addition to more flexible labour market tests, the pilot involves communication campaigns on attracting skilled workforce and on preventing the exploitation of labour.

The experiment will begin in September–October 2021 and last until the end of February 2023.