The Finnish authorities should work together more closely to integrate work-based immigrants better
By Sari Hanhinen, National Audit Office of Finland
While many people will associate asylum and migration issues with displaced people in distress, a large proportion of migrants come to the EU to work. Demographic developments play a large role in this, not only from the migrants’ country of origin but also in the receiving country. One example of this is Finland: its population and the number of workers can only increase as a result of immigration. Since 2003, Finnish government programmes have promoted work-based immigration as a means of improving the demographic dependency ratio, bolstering the economy and alleviating the situation in sectors suffering from labour shortages. Sari Hanhinen, an Audit Manager at the Finnish National Audit Office (NAO), provides insight into the audit work her institution does on integration, the conclusion being that various areas can be improved, ranging from settling-in services to electronic registration, not least by means of better cooperation and harmonisation.
Still room for improvement in terms of effectiveness and customer orientation
In 2022, the National Audit Office of Finland conducted a performance audit entitled Work-based immigration — Effectiveness and customer orientation of the immigration administration and recruitment of foreign labour in the health and social services sector. The starting point for our audit was the fact that the Finnish population and the number of people in employment are only growing because of immigration. The dependency ratio in Finland is rising at a significantly higher rate than in other Nordic countries.
The number of work-based immigrants has been increasing year on year. In 2022, a total of 20,960 applications for a first work-based residence permit were submitted, compared with 15,012 in 2021. Last year, the Finnish Immigration Service received 13,534 applications for a residence permit for the purposes of employment (2021: 8,529), while specialists submitted 2,594 first residence-permit applications (2021: 1,605). Specialists, such as IT experts, received a total of 2,358 positive residence-permit decisions (2021: 1,293). The specialists’ most common countries of origin were Russia, India and Turkey.
The previous coalition government set the target of doubling work-based immigration from its current level by 2030. In government programmes, promoting work-based immigration has been seen as an instrument for improving the demographic dependency ratio, boosting economic growth, and easing the situation in sectors facing labour shortages. Macroeconomically, immigration also has a positive impact on innovation, investment, and commodity markets. A diverse and skilled workforce attracts international investment. The topic is also significant from the perspective of central government finances, as a shortage of skilled labour is a serious obstacle to growth. Finland is the OECD country that is facing the most serious shortage of highly educated labour.
Our audit found that numerous strategic development targets have been set at government level to promote work-based immigration over the last 20 years. While the authorities’ actions have consistently been steered towards achieving these targets, the process has been hampered by slow progress and interruptions. Problems have been caused, among other things, by the fragmented administrative structures for official action and variation in different authorities’ commitments to targets. In 2020, the administration of work-based immigration was transferred to the Ministry of Economic Affairs and Employment. Although this has improved overall steering and target achievement, there is still room for improvement as regards the effectiveness and customer orientation of immigration management. This applies both to the permit process and to the integration of working immigrants into Finnish society. Our audit revealed that services that promote integration are a ‘pull’ factor for Finland, and encourage working immigrants and their families to stay in Finland. Other studies have shown that integrating immigrants is an excellent investment for society.
The whole family must be supported when a work-based immigrant settles in Finland
More and more immigrants are applying for an extended work-based residence permit in Finland. Citizens of Ukraine, Russia and India have been granted the largest number of work-based extended residence permits. At the same time, it must be noted that global competition for talent is fierce. According to the study, Finland is the 22nd most attractive country for international workers.
In 2018, the Parliamentary Audit Committee drew attention to the fact that the integration services that municipalities provide are rarely offered to work-based immigrants. Our audit showed that work-based immigrants are still left without integration services because municipalities take the view that they lie outside the scope of the Act on Immigrant Integration. Immigrants’ knowledge of services is also limited. We found that, instead of integration, large cities have promoted settling in Finland by placing official services under one roof at immigrant guidance and advisory points. The reform of the Integration Act aims to correct problems with integration. For the first time, the law will regulate how to promote the way work-based immigrants settle in. In practice, this would mean, for example, facilitating necessary dealings with various authorities during the initial phase of immigration.
Settling-in services make it easier to start everyday life after moving to Finland. An important factor is the integration of family members. Work-based immigrants contact Finnish embassies to enquire about the availability of English-language schools and early childhood education services even before they enter the country. English-language upper-secondary education in particular is insufficiently available in Finland. In big cities, the need for English-language early childhood education and basic education is recognised. However, at the same time, local authorities are considering how to support Finnish-language schooling for immigrants’ children, as this would offer them more options for further study and facilitate their integration into Finland.
During our audit, we found that as many as 66 % of respondents to the survey we sent to companies completely or partially agreed with the statement that ‘work-based immigrants adapt well to Finland’. In the survey on projects relating to work-based immigration, opinions were more divided, and fewer respondents agreed with the statement. According to representatives of companies and projects, factors that encourage immigrants to stay in Finland included employment for spouses, English-speaking schools in their locality, smooth official processes, multilingual guidance and counselling services, functioning integration and settling-in services, and a tolerant atmosphere.
According to the studies, the most common reason for the failure of work-based immigration is that spouses do not adapt. We found that 66 % of the companies and project operators that responded to the surveys disagreed or partially disagreed with the statement that ‘spouses of work-based immigrants have easily found employment in Finland’. Only 24 % of respondents felt that the spouses of work-based immigrants had received support for employment in Finland. Employment for spouses has been supported in large cities and by several projects.
In the light of the audit, one of our conclusions was that the integration of work-based immigrants could be enhanced by specifying more clearly the names and roles of bodies responsible for settling-in services, and by improving cooperation between state and municipal authorities. We recommended that the central government, local governments, and businesses should also work together to improve immigrants’ language and professional skills. Integration could also be promoted more efficiently if fragmented resources were allocated to actions and structures that ensure that the authorities follow established practices, rather than to individual projects. In addition, the beginning of the integration process could be facilitated by means of electronic registration.
Electronic registration in the country of origin would speed up settling in Finland
The aim set out in the 2018 immigration policy programme that the settling-in process could already start in the country of origin has not yet become a reality. Official services require strong identification, which in turn requires a personal visit to an official service point in Finland. Substantial improvements in administrative efficiency can only be achieved if electronic identification is introduced in all immigration-related services. According to companies’ own experiences, employees may have to wait for their personal identity codes for up to two months. As a result, opening a bank account and wage payments are also delayed.
In the Virtual Finland project, which takes place between 2021 and 2025 and is led by the Ministry for Foreign Affairs, the aim is to create a digital immigration-service infrastructure for Finland that would make it easier for entrepreneurs, employees and students to enter the country and settle there. A total of €4 million has been allocated to the project by the European Recovery and Resilience Facility (RRF). Finland is also providing €2 million for the project from national funds.
In autumn 2022, Parliament was considering Government proposals for legislation on digital identity. One aim of the proposals was to ensure that foreigners can log into electronic services on an equal basis, thus facilitating electronic registration. The last parliamentary term was not sufficient for parliamentary committees to consider the proposals, meaning that the next government will decide how to move the proposals forward. Based on our audit findings, we believe that the reforms would help to make the administration of work-based immigration more efficient, and streamline the entry of work-based immigrants into Finland.
Finland’s new government is tightening immigration regulations
According to the new government that was formed in mid-June 2023, work-based immigration is very important for Finland’s economic growth and the securing of services. The new government has emphasised that in Finland, work-based residence permits are based on the right and obligation to work. The government will supplement the labour force primarily from the EU and the European Economic Area. Work-based immigration from third countries will focus on people with higher education, as well as on employees in sectors that can be genuinely identified as suffering from a labour shortage, such as the social and health-care sector. The aim is to focus recruitment efforts on specific groups of experts in target countries, i.e. India, the Philippines, Brazil and Vietnam.
Our audit noted that slow permit processes have been a significant reason for the low number of foreign employees recruited by Finnish companies. The new government aims to process work-based residence permits within a maximum of one month, and strives to process permits for professionals earning more than €4,000 per month within a maximum of one week. This would be a significant improvement compared to the situation at the end of 2022, when the time varied greatly between different groups. Permits for specialists and growth entrepreneurs were processed within two weeks. However, the average processing time of residence permits for employees was 68 days, while the corresponding figure for entrepreneurs was 85 days. Employees’ permits to enter the country do not apply to their families, which makes family reunification slow, expensive and uncertain for employees. As employers cannot promise potential employees that they can bring their families with them to Finland, it is difficult to attract employees by targeting campaigns at them. Specialists’ family members usually receive a residence-permit decision more quickly and at the same time as their sponsor (see Figure 1).
Figure 1 — Average processing times for residence-permit applications submitted on the basis of family ties (in days) in the 2018–2022 period (until 31 May 2022)
Despite speeding up the permit processes, the new government will tighten immigration in many ways. For example, all income limits for work-based residence permits will increase, with the minimum income level being no less than €1,600 per month. In addition, work-based residence permits will be tied more closely to work. This means that a holder of such a permit must leave Finland if the holder’s employment relationship ends and the holder has not entered into a new employment relationship within three months. It remains to be seen how stricter immigration guidelines will affect the number of work-related immigrants and the integration process.
This article was first published on the 2/2023 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.
