Local agreements boost employment and productivity: Chamber of commerce survey
A recent economic survey conducted by Finnish Chambers of Commerce revealed that 69 percent of businesses believe that expanding local agreements would accelerate growth in employment and productivity. The survey, which took place from September 27 to 29, garnered responses from 1827 companies across various sectors in Finland.
According to the findings, nearly 70 percent of the companies surveyed anticipate that the proposed expansion of local agreements, regardless of employer and employee organizational affiliations, would significantly or moderately boost long-term employment and productivity (15 percent significantly, 53 percent moderately).
Only 12.5 percent of respondents indicated that these reforms would not affect employment and productivity growth, while 19 percent were uncertain about the outcomes.
The proposed reforms in the government's agenda aim to extend local agreements, which are currently applicable only through central labor market agreements, to cover all companies. Additionally, these changes would allow the application of employment law-related flexibilities in company-specific collective agreements, supplementing existing national agreements.
Juho Romakkaniemi, CEO of the Central Chamber of Commerce, highlighted the importance of local agreements in responding swiftly to evolving market conditions and competition. Romakkaniemi emphasized that existing collective agreements restrict the ability to negotiate matters locally within workplaces, hindering adaptability to market dynamics. "One size does not fit all, and the rigid Finnish labor market no longer aligns with the demands of global competition," he said.
The survey also inquired about the potential impact of these reforms on hiring within respondent companies over the next five years. Approximately 38 percent of companies envisioned the need to recruit additional staff during this period. Among these, 32 percent anticipated hiring 1-5 employees, while 3 percent foresaw the need for 6-10 employees, and another 3 percent expected to employ over ten individuals. In contrast, 35 percent of companies believed that the reforms would not lead to increased hiring within the next five years, and 27 percent were unsure about the potential outcomes.
Based on the survey results, Romakkaniemi emphasized the significance of allowing local agreements as a means to enhance employment opportunities. "When 38 percent of respondents anticipate increased hiring due to these reforms, it's evident that this is far from an insignificant change. Finland lags behind comparable countries in several aspects, and minor adjustments are no longer sufficient. Businesses have spoken: they need better company-specific options to enhance productivity and employment through local agreements," he stated.
The survey, conducted through email among member companies of the Chambers of Commerce, underscores the business community's call for more flexible arrangements to promote economic growth and job creation in Finland.
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