Regional pilots on labour market tests have been completed
Four Centres for Economic Development, Transport and the Environment (ELY Centres) launched an experiment on more flexible labour market tests in autumn 2021. The aim was to increase labour mobility between regions and ease permit processes related to immigration of foreign workforce by introducing common policies. The experiment did not have a significant effect on work-based immigration, but it increased cooperation between the regions.
Labour market test means that, upon receiving an application for a Finnish residence permit by a foreign worker, the employment and economic development office (TE office) determines whether the vacancy could be filled by a worker already in Finland. The purpose is to support the employment opportunities of labour already available on the market, but not to prevent the necessary recruitment of labour from abroad.
In autumn 2021, the Government launched a regional pilot on labour market tests related to residence permits for employed persons. The regions defined together the sectors where the availability of labour is poor and where the case-by-case labour market tests are therefore not needed before workers are recruited from outside the EU/EEA. The experiment’s idea was to support the immigration of skilled labour by making the labour market tests more flexible.
The ELY regions of South Ostrobothnia, Ostrobothnia, North Ostrobothnia and Kainuu were selected for the experiment. The aim was to increase labour mobility between the regions and streamline the permit processes related to immigration of foreign workforce. The pilot ended at the end of February 2023.
No significant effect on work-based immigration, but cooperation increased
As a result of the experiment, cooperation between the ELY regions increased. Employers and authorities welcomed the broader common employment permit policy, which they considered clear and functional. However, the number of residence permit decisions did not grow in the pilot regions more than nationally. In 2022, the growth in residence permit decisions in the regions was subdued on average, compared to the country as a whole. The number of decisions fell in Kainuu.
Moreover, the common policy did not result in the growth of any single occupational group of foreign workers in the given regions. The sizes of the groups were in line with the labour market situation in the regions, and the pilot did not cause any regional oversupply of labour.
Results can be used to develop labour market tests
Based on the experiment’s positive results, consideration could be given to larger cooperation areas in future, instead of the current 14 separate policies concerning residence permits. When TE services are transferred to municipalities in 2025, the Finnish Immigration Service will become responsible for considering partial decisions on residence permits for employed persons. New operating methods are therefore under development in any case.
To support the policies on work permits a comprehensive knowledge base on the demand and supply of labour at both national and regional levels is necessary.
Labour market tests were carried out uniformly in the regions
South Ostrobothnia, Ostrobothnia, North Ostrobothnia and Kainuu were selected for the experiment because they already have business cooperation with each other and the employers need flexibility in placing workers across the regions. At the start of the experiment, there were several sectors in the regions where the shortage of labour slowed growth. At the same time, the need for skilled labour from abroad was expected to increase further in the following years.
In addition to increasing flexibility in labour market tests, communication campaigns were carried out during the experiment to attract skilled workforce and prevent the exploitation of labour.