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Survey: Majority of Finnish SMEs say govt's activation model failing to deliver

Some 91 percent of small and medium-sized businesses said the government's "activation model" has so far not resulted in a single hire, according to a new survey.

Antti Leuku ja Pekka salmela maistelevat ruoka-annosta.
File photo of restaurant workers. Antero Levänen, head of personnel at the massive retail and restaurant cooperative HOK-Elanto, said there is a need for workers in the restaurant and retail sectors. Image: Petri Aaltonen / Yle

Pointing to results from a new survey, the Federation of Finnish Enterprises says the government's "activation model" - which uses a stick instead of a carrot to get the unemployed back to work - is weak and nearly useless.

Eighty percent of 1,055 Finnish business leaders polled said their companies had not seen any benefit from the active employment model.

According to activation model rules rolled out at the beginning of the year, jobseekers must attend approved training courses, embark on entrepreneurship or complete at least 18 hours of paid work over a three-month period, or face a 4.65-percent cut in their unemployment benefits. It has since been reported that nearly half of those affected by stricter rules on unemployment benefit saw their payments cut after the first monitoring period.

CEO of electricity firm Takuusähkö, Tommi Valtonen said those 18 hours of compulsory employment have not had any effect.

"We have not noticed a change due to the [activation] model," Valtonen said. One conclusion that can be drawn is that the model does not work for small to medium-sized businesses. It is typical that those 18 hours are [generally] spent in educational courses rather than work," he said.

Large firms not seeing benefits, either

According to the survey, large companies report that they have not seen significant benefits since the activation model was introduced.

Tanja Kanerva, an HR expert at the construction sector group Lehto Group, said the firm had anticipated that implementation of the activation model was going to result in an increased number of job applicants, but that has not happened.

"The activation model is unnecessary for us. There is a shortage of workers in the construction sector and the model does not affect the supply of highly-trained workers which the industry needs," Kanerva said.

Antero Levänen, head of HR at the massive retail and restaurant cooperative HOK-Elanto, said that the organisation has not seen an influx of new job applicants. But, he said he appreciates that the model has sparked an increase in public awareness about the issue.

"There is a great need for workers in the retail and restaurant sectors, so hopefully the discussion about the model will also encourage older workers to seek employment," Levänen said.

Despite that most firms said they had seen few - if any - benefits as a result of implementation of the activation programme, the Federation of Finnish Enterprises said that the model has prompted some activity on the job market.

The head of the federation, Mikael Pentikäinen said the companies polled reported that the active model had helped create 10,000 openings.

Finland's Ministry of Economic Affairs and Employment said it did not want to draw any premature conclusions about the progress of the programme. Ministry advisor Tiina Korhonen said it's a better idea to examine the effects of the model over a longer period of time, instead.

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