Study: Foreign labour critical for Finnish SMEs

SMEs in different sectors have varying needs. However, all businesses share the experience of a more diverse workforce positively affecting the business and the working climate. Nevertheless, the workload and red tape associated with hiring internationally places burdens on business owners.

These are the findings of E2 Research’s study, SMEs and International Recruitment: Experiences, Support, Solutions, in which 40 SME owners or company leaders in a range of sectors from around Finland were interviewed.

All the companies interviewed employed foreign employees. The interviews were about experiences of hiring foreign employees, which offered good solutions for recruitment, onboarding and managing a diverse team.

Encouraging experiences

The SME representatives interviewed in the study considered their companies to have benefited in many ways from hiring foreigners. Some were linked to core commercial questions such as the ability to hire new people and expand the business’s operations.

In sparsely populated areas, in particular, a company’s decision to hire foreign workers has at times allowed the company to continue operating. That meant that the Finns already working at the company could keep their jobs and the valuable local business could stay open.

“Our study shows that there is no need to pit Finnish and foreign labour against each other. Both are needed,” says the project head, Mari K. Niemi of E2 Research.

Another benefit was the ability to better serve diverse customer groups. Some of the interviewees said the company became more resourceful in general and that the working climate improved after making foreign hires.

Some of the interviewees considered their companies to have strengthened their international capabilities, which improved their ability to serve foreign customers and expand abroad.

“Very few studies have so clearly conveyed SME owners’ voices. Businesses derive a wide range of benefits from international hiring, and they should definitely be supported in their recruitment endeavours,” says Joonas Halla, Business Development Manager at Work in Finland at Business Finland.

Businesses’ comments

“There are no Finnish workers.”
Property service company, South Ostrobothnia

“We do these productions internationally, after all. Of course we want to do them to the highest quality. That also means hiring internationally.”
Audiovisual company, Uusimaa

“I’ll admit I was a bit sceptical. I wondered about how much work it would be and how much I’d have to invest in it, and whether we’d make it work. Our experience has been really good.”
Care company, Central Ostrobothnia

“Because we decided to hire internationally, we have an absolutely unsurpassable competitive edge, and we have employees.”
Forestry company, North Ostrobothnia

“If you think about the potential financial benefit, it’s easier for us to look for commissions from different countries, now that we’re able to offer design services in that country’s language.”
Architecture firm, Uusimaa

“Kela said that issuing a personal identification number could take weeks or months. Let’s see when they manage to get round to it. Until then, my employee can’t open a bank account and I can’t pay salary. And my employee can’t pay a rent deposit.”
IT firm, North Karelia

“An employee simply isn’t going to drive 35 km away two evenings a week to study Finnish. That’s out of the question.”
Metal subcontractor, Central Finland

About the study

The study is the main publication of the Small and Midsize Enterprises and Foreign Workforce in Finland (PIKEUS) project. The project participants are the cities of Helsinki, Espoo, Tampere, Kuopio, Lahti, Work in Finland at Business Finland, the real estate and construction consortium KIRA, and E2 Research, the author of the study.

The goal of the PIKEUS project is to support SMEs’ international hires by studying businesses’ experiences and sharing good practices nationwide. The project also provides recommendations to companies for improving international recruitment services for businesses and educational cooperation.

Of the companies involved in the study, around 40% hired employees for jobs requiring third-level qualifications, while around 60% hired employees for manual work. The companies represent 25 sectors. Several interviewees were from the architecture, property service, construction, care, IT, agriculture, metalwork, restaurant and textile care sectors.

You can read the whole report here.