The great recession of the 1990s initially led to severe, long-lasting unemployment, then later – towards the end of the century – the birth of the information and communications technology (ICT) sector and large-scale telecommunications. Following the 2008–2009 recession, the telecommunications sector lost its leading role in the economy. Instead, Finland has returned to exporting pulp industry products, with packing board replacing paper due to the worldwide expansion of online shopping. The technology industry, along with mechanical engineering, also remain strong elements of Finland’s export industry. Forestry and machine construction are both deeply rooted in the country’s rural areas, and so affect local labour markets. Although the headquarters of many metal and mechanical engineering companies are located in urban areas, they depend heavily on subcontracting, which takes place all over the countryside.
2. Regional and rural labour shortage variations
Rural labour force projections
As already mentioned, Finland’s rural population is ageing rapidly. Table 4.1 below shows that, according to population forecasts (OSF n.d.b), rural areas are expected to lose 100,000 working-age inhabitants by 2040. The trends driving this projection are a low birth-rate, with mortality exceeding births, and the concentration of foreign labour in urban areas, which are expected to gain 100,000 workers over the same period. The forecast also indicates that the larger shortage of female workers relative to male workers in rural areas will continue (OSF n.d.b).
Most important sectors by rural area type
While different types of rural areas have different economic structures, social and health care is the biggest employment sector across all regional types – including urban areas. As of 2020, the sector’s share of employment in sparsely populated rural was 18.2%, followed by primary production (agriculture, forestry and fisheries) (11.4%) and industry (10.8%). In heartland rural areas, the three biggest sectors were social and health care (19%), industry (18.9%) and primary production (9.9%). In rural areas close to urban areas, the biggest employment sector is again social and health care (19.4%), followed by industry (15.5%) and construction (10.9%) (Statistics Finland n.d.). Given the social and health care sector is dominated by female employees, any changes to the sector inevitably impacts women’s job opportunities in rural areas.
Social and health care’s share of employment has increased in all types of areas over the period 2007–2020 (Statistics Finland n.d.). In sparsely populated rural areas, the only other sector to increase its share of employment during this time was the mining industry (from 1% to 2.9%). In rural heartland areas, the hospitality sector’s share increased slightly (from 2.5% to 2.8%), while the construction industry grew in rural areas close to urban areas (from 9.8% to 10.9%) (Statistics Finland n.d.).
Entrepreneurs and the self-employed as part of the labour force
Proportionally speaking, Finland’s rural areas host more entrepreneurs, especially small-scale entrepreneurs as well as self-employed workers than its urban areas, where wage work is more common. In both sparsely populated and rural heartland areas, 15.4% of all those engaged in work in 2020 were entrepreneurs/self-employed. In rural areas close to urban areas, the percentage was 12.7%, while in urban areas it was just 8.6% (Table 4.1). As the numbers provided in Table 1 demonstrate, rural enterprises are primarily very small, with rural heartland areas standing out as having most businesses in absolute numbers.
In many cases, such businesses involve self-employed people taking care of various types of production (e.g. in agriculture or horticulture) or providing rural communities with necessary services (e.g. cleaning and maintenance workers, car mechanics, electricians, plumbers, machine contractors, hairdressers, physiotherapists). In addition, self-employment is also common in ‘new’ rural occupations, such as wilderness or hiking guides, dog trainers or wellness therapists. Self-employment is often the only option available for those interested in living in rural areas. Moreover, their work may only be possible with the aid of virtual connections and remote working.
Given the number of small enterprises in the countryside, labour shortages in rural areas not only affect the activities of public institutions and private companies, but have a direct impact on the number of such enterprises in an area (see Table 1). While the high number of small enterprises In rural heartland areas is partly explained by the amount of farms, only 35,730 of the total of 141,556 rural enterprises recorded in 2020 were classified as agricultural and horticultural enterprises (Statistics Finland n.d. ). In other words, only one in four rural enterprises can be classified as a farm. The ageing rural population also means labour shortages arise due to a shortage of successors willing or able to take the place of retirees. All of the above has implications when it comes to dealing with rural labour shortages.
Labour shortages due to retirement
When it comes to understanding whether future rural labour shortage in Finland will primarily be characterised by lack of personnel or lack of appropriate skills in the existing work force, it is important to examine the likelihood of rural labour retiring in different types of rural areas and sectors. According to employment statistics for 2022 (Vihinen et al. 2024), in sparsely populated rural areas almost a third (32.8%) of the total working population (both paid employment and self-employment) was 55–74 years old – thus likely to exit the world of work within ten years. The sectors with the largest shares of those in this age bracket were property business/maintenance (47.8%), public administration (39.3%), finance and insurance (37.4%), and primary production (36.8%). The share was high also in education, as well as in social and health care. People working in the mining sector had the smallest proportion of people likely to retire within the coming decade (Vihinen et al. 2024).
In rural heartland areas, 28% of the working population was 55–74 years old. As in the sparsely populated rural areas, those employed in property business/maintenance were the most likely to belong to this age bracket (42.4%), followed by public administration (36.1%) and primary production (33.7%). At the other end of the spectrum, the construction sector had the smallest share in rural heartlands (21.5%) (Vihinen et al. 2024).
The picture was somewhat more positive in rural areas close to urban areas, where, on average, a quarter (24.6%) of the employed population was 55–74 years old. Here, primary production had the highest proportion falling into this age range (35.2%), followed by property business/maintenance (34.8%). Conversely, the sector with the smallest proportion of 55–74 year olds was information and media (19.2%) (Vihinen et al. 2024).
It is noteworthy that the shortage of labour in rural areas is, in many cases, down to a lack of younger entrepreneurs stepping in to take over when their older counterparts retire. Firstly, many workers in rural areas work in small firms (see Table 4.1), meaning the retirement of a firm’s owner may lead to the job disappearing. Secondly, addressing labour shortages in rural areas requires finding suitable successors to fill the skills gap created when an entrepreneur or self-employed person leaves the local labour market. Doing so becomes difficult when there is a shortage of such individuals interested in or able to pursue self-employment. Here, it should be noted that being an entrepreneur or self-employed worker implies – in addition to the substance of the work – extra skills.
Seasonal workers as a specific labour shortage group in rural areas
Finland hosts an estimated 40,000 seasonal workers, half of whom work in the hospitality sector (especially in Lapland sports resorts), with the remainder working in agriculture or horticulture, or as wild berry-pickers (Yle 2022; Rannanpää et al. 2022). Regarding rural areas, an important intra-Nordic difference should be highlighted with regard to third-country migrant workers. In Finland, Ukraine provided the largest proportion of such workers – the majority of whom come to work in horticulture – in the years prior to Russia’s full-scale invasion in 2022 (Kuns et al. 2022). By contrast, studies indicate that EU labour migrants dominate in Norway and Denmark (Friberg & Erdland 2013; Friberg & Midtbøen 2018), and are also significant in Sweden.
In recent years, the Covid-19 pandemic and especially the war in Ukraine have complicated the availability of seasonal workers, to the extent that lack of workers threatens to significantly affect the supply of fruit and vegetables in Finland. By some estimates, a third of Finland’s seasonal rural worker roles are going unfulfilled (Yle 2022). Ukrainians in Finland who have fled their country and received temporary protection are allowed to work freely, and after 12 months can apply for a municipality of residence. The problem, however, is that most of these Ukrainians are women with (small) children, whereas male labour is needed to safeguard competitive production in agriculture and horticulture. As such, Finnish rural areas can no longer rely on the availability of Ukrainian labour (Viilo 2023).
Another sector facing severe labour shortages, particularly in sparsely populated rural areas, is the picking of wild berries and other natural products. Generally, this work is not carried out through conventional employment relations. Instead, most berry-pickers are foreign nationals who pick nature products by virtue of everyman’s right, facilitated by accommodation and food provided by industry operators. Recently, serious legal doubts have been raised regarding the sector’s functioning, with authorities expanding a human trafficking investigation to encompass berry companies. At the same time, high-ranking politicians and officials in Thailand have been subject to allegations of corruption linked to berry harvesting in Finland, while a Finnish senior ministerial advisor has been remanded in connection with the suspected use of foreigners in wild berry-picking (Yle News 2024a). In response, Finland’s Ministry for Foreign Affairs suspended berry-pickers’ visa applications in Thailand (Ministry for Foreign Affairs 2024).
Given that Thai pickers have typically accounted for 80–90% of commercially picked wild berries (Lapin Kansa 2024), this represents a major setback for the Finnish natural product sector, and appears a difficult issue to resolve in the short run. The most recent attempt to address the wild berry-picking labour issue has been the outlining of a ministerial committee on employment and entrepreneurship. This states that, from 2025 onwards, pickers should primarily have seasonal employment contracts, with berry-picking on a tourist visa no longer allowed. For 2024, wild berry firms are permitted to recruit foreign pickers if they enter Finland with employment-based residence permits, which is effectively the same procedure for workers harvesting farmed berries, such as strawberries. The main reason the use of berry-pickers has not previously been employment-based is because this allows the risk of poor harvest to be borne by the pickers rather than the berry companies (Yle News 2024b).