New THL study reveals systemic employment obstacles extend far beyond credential gaps, posing strategic workforce risks for Nordic businesses
A comprehensive study by the Finnish Institute for Health and Welfare (THL) has shed light on two key barriers that hinder the integration of foreign-background residents into Helsinki’s labour market: limited Finnish language skills and restricted access to native networks. The MoniSuomi 2022 survey—based on 7,838 respondents aged 20-74—found that 62% of unemployed foreign-background individuals identify poor Finnish skills as a critical barrier, while 58% cite limited contact with ethnic Finns.
These findings underscore a deeper, systemic challenge: despite Helsinki’s international appeal, there remains a reliance on Finnish language proficiency and ethnic networks—factors that disproportionately disadvantage skilled immigrants and second-generation residents.
Key Findings
1. Primary Employment Barriers
The MoniSuomi 2022 dataset, based on data collected between September 2022 and March 2023, provides valuable insights into the barriers foreign-background residents face in securing employment:
| Barrier | Unemployed (%) | Employed (%) | Gap |
| Poor Finnish/Swedish skills | 62 | 48 | +14 pp |
| Limited contact with ethnic Finns | 58 | 36 | +22 pp |
Source: THL MoniSuomi 2022; Helsinki city analysis
2. Magnitude of the Employment Gap
The data confirms that foreign-background residents face a persistent employment disadvantage:
- Unemployment Rate Differential: In 2017, foreign-background unemployment in Helsinki was 21.6%, compared to 8.6% for native Finns—an alarming 13 percentage-point gap that has only slightly narrowed despite integration efforts.
- Current Scale: As of August 2024, 34% of all unemployed jobseekers in Helsinki are foreign-language speakers, with 31% of long-term unemployed individuals falling into this category.
- Declining Employment Rate: After years of improvement, foreign-background residents saw a decline in employment rates in 2023, even amid labour shortages in key sectors like healthcare and technology.
3. Language Proficiency Paradox
- Perception vs. Reality: Despite three-quarters of foreign-background individuals assessing their language skills as “average” or better, 62% still cite language as a barrier to employment.
- Mismatch in Hiring Expectations: 60% of Finnish employers consider language barriers a major hiring obstacle, often requiring “fluent” Finnish for roles where lower proficiency (B1 or B2) would suffice.
- Discrimination: A 2022 study by Ahmad et al. found that applicants with Somali names—regardless of qualifications—were much less likely to be called for interviews, with a callback rate of only 9.9%, compared to 39% for Finnish-named applicants.
The Role of Social Networks in Employment
1. Limited Network Access: A Structural Barrier
The second most common barrier, limited contact with ethnic Finns, highlights the critical role of social networks in accessing employment opportunities in Finland. Informal networks dominate the Finnish job market, and immigrants are often excluded from this “hidden job market,” where 60-70% of positions are filled.
- The Network Gap: Among employed foreign-background individuals, social relationships and direct employer contact are the most common job-finding methods. However, 58% of unemployed respondents report insufficient access to these networks.
2. Reinforcing Cycles of Exclusion
The exclusion from ethnic Finnish networks perpetuates a cycle of employment inequality:
- Immigrants are unable to tap into informal job networks.
- Employers recruit from homogeneous talent pools, reinforcing workforce monoculture.
- Integration policies focus primarily on language acquisition, neglecting the importance of network-building.
The Challenge of Second-Generation Integration
1. Fluent but Still Excluded
A concerning trend is emerging among second-generation immigrants—children of foreign-born parents who are Finnish citizens, speak Finnish fluently, and are educated in Finland. Despite these advantages, they face similar employment barriers.
- Rising Numbers: The population of Finnish-born individuals with foreign backgrounds has tripled to 90,000 over the past decade, with many educated young adults in Helsinki.
- Worse Employment Outcomes: This group faces lower employment rates and higher unemployment than their native Finnish peers, even when they are fluent in Finnish.
- Persistent Discrimination: Even when highly qualified, second-generation immigrants like Jamila Mohamud, a civil engineer, report discrimination based on their ethnic background, with employers assuming language deficiencies.
Business and Economic Implications
For Nordic businesses, these findings present both challenges and opportunities:
1. The Cost of Untapped Talent
- Labor Shortage Paradox: Despite Finland’s shrinking working-age population, 27.5% of the foreign-background workforce was unemployed as of mid-2021, compared to 7.1% for native Finns.
- Credential Wastage: Many highly educated immigrants are working in positions below their qualification level, leading to potential GDP loss of 1.2-1.5% annually.
- Innovation Deficit: A lack of cultural diversity in the workforce reduces cross-cultural competencies, which are essential for export-driven economies like Finland’s.
2. Competitive Disadvantage
By maintaining strict Finnish language requirements, companies risk:
- Narrowed Talent Pools: Finland faces acute skills shortages, yet many international graduates leave due to barriers to entry, leading to a brain drain.
- Decreased Global Competitiveness: Companies that fail to adjust to global talent realities may find themselves at a competitive disadvantage.
- Reputation Risks: Younger generations of Finns increasingly value diversity and inclusion, making a company’s reputation in these areas a key factor in attracting top talent.
Evidence-Based Recommendations
To address these systemic barriers, the following interventions are recommended:
1. Rationalize Language Requirements
- Shift from subjective “fluent Finnish” criteria to more objective frameworks like the YKI (National Certificate of Language Proficiency) and CEFR levels.
- Business case: International tech workers hired with realistic language requirements perform at a comparable level to native hires within 18 months.
2. Systematise Access to Networks
- Internship Pathways: For international graduates, creating mandatory internships would help them access professional networks in Finland.
- Mentorship Programs: Employer-subsidized mentorship programs could bridge the network gap for newcomers.
- Job Fairs: Expanding city-funded job fairs, like the September 2024 Job Fair for Internationals, which attracted 5,000 jobseekers, would provide greater access to opportunities.
3. Combat Discrimination Directly
- Anonymous Hiring: Pilots in the public sector and large corporations have reduced ethnic bias by 25-40%.
- Recruiter Accountability: Recruiters should be required to document language proficiency justifications for rejections.
- Monitoring: Expanding discrimination monitoring and collecting ethnic data in national registers could help address discriminatory practices.
Conclusion
The MoniSuomi 2022 data reveals that the high unemployment rate among foreign-background residents is not due to individual deficits but systemic barriers—high language requirements, exclusionary networks, and persistent ethnic discrimination. As Helsinki faces acute labour shortages and demographic decline, businesses must adapt their recruitment practices to tap into the untapped human capital within foreign-background communities.
In conclusion, language proficiency should be seen as an asset, not an obstacle, and businesses that recognize this will gain a competitive edge in the increasingly globalized Nordic labour market.
Methodology Note: This analysis integrates data from THL MoniSuomi 2022 (n=7,838), Statistics Finland employment registers (2023-2024), OECD Economic Survey of Finland 2025, and Ministry of Economic Affairs and Employment integration reports. The MoniSuomi survey had a 44% response rate, with data weighted to account for non-response bias by age, gender, and region.
For Nordic Business Journal: This article provides evidence-based analysis to inform C-suite talent strategy and policy advocacy in the Nordic region.