Mercans’ Guide to Hiring Employees in Finland

Renowned for its exceptional education system, cutting-edge technology, and stunning landscapes, Finland also boasts an efficient and well-regulated labor market. If you’re a business owner looking to expand your operations or establish a presence in Finland, understanding the country’s employment laws and regulations is crucial. Hiring employees in Finland involves navigating various legal requirements, cultural nuances, and administrative procedures. This guide aims to equip you with essential information to streamline the hiring process and ensure compliance with Finnish labor laws.

Hire and Pay Employees and Contractors through and Employer of Record (EOR) in Finland.

Navigating Finnish Labor Laws:

In Finland, labour legislation has evolved through cooperation between the labour market parties (employers and employees) and the government. This collaborative approach has resulted in a robust framework of labour laws aimed at protecting both employees and employers. Key aspects of Finnish labour laws include:

Collective Agreements

• Historical Context: After World War II, collective agreements became pivotal in regulating labour affairs, including individual employment terms.
• Coverage: By 1994, 72% of the working population was covered by collective agreements, with minimum wage agreements covering 95% of the workforce.
• Legal Binding: These agreements are legally binding on signatories and affiliated employees, but employers must respect the terms even for non-affiliated employees.

Key Non-Wage Agreements

• The General Agreement (1946): Regulates relations between employers and the blue-collar SAK federation, outlining rights and duties.
• Job Security Agreement: Enhances laws on dismissals and layoffs.
• Shop Stewards Agreement
• Labour Protection Agreements: Enhances health and safety laws.
• Rationalisation Agreement: Focuses on improving production methods and working conditions.
• Cooperation Agreement: Pertains to the implementation of the Cooperation Act.
• Training Agreements

Main Labour Acts

• Employment Act:
• Employment Services Act: Amended in 1994 to enhance active labour market policies.
• Act on Labour Market Training: Aims to create training systems catering to the needs of working life.
• Working Hours Act:
• Annual Holidays Act:
• Study Leave Act:
• Payment of Wages:
• Safety at Work:
• Protection of Young Workers Act:
• Occupational Health Care Act:

Understanding Finnish labor laws is crucial for ensuring compliance and protecting the rights of both employers and employees. Finland’s comprehensive legal framework covers various aspects of employment relationships, including contracts, working hours, wages, holidays, and termination procedures. Here are some key points to consider:

Essential Considerations in Finnish Employment Contracts

In Finland, employment contracts can be either fixed-term or indefinite, emphasizing the importance of clearly delineating terms and conditions. When crafting these agreements, it’s vital to address various aspects, including job responsibilities, working hours, compensation packages, and termination protocols.

Adhering to Working Hour Regulations

Finland maintains a standard of 8 hours per day and 40 hours per week for working hours. Overtime work is compensated at a premium rate, with stringent regulations dictating maximum work hours, mandatory breaks, and periods of rest to safeguard employee well-being and productivity.

Collective Agreements and Wage Levels

While Finland lacks statutory minimum wage laws, industry-specific collective agreements often establish minimum wage standards. Employers must ensure that remuneration aligns with these agreements to uphold fair compensation practices and meet legal obligations.

Employee Leave Entitlements

Finnish employees benefit from generous vacation provisions, with a minimum entitlement of 24 paid vacation days annually. Additionally, public holidays are observed, with employees potentially receiving extra compensation or time off for holiday work.

Family-Friendly Parental Leave Policies

Finland’s parental leave policies exemplify its commitment to gender equality in caregiving responsibilities. Both mothers and fathers are entitled to substantial parental leave benefits, including maternity, paternity, and parental leave, fostering a supportive work environment for families.

Termination Procedures and Legal Compliance

Termination of employment in Finland necessitates adherence to rigorous legal procedures. Grounds for termination may include redundancy, subpar performance, or disciplinary issues. Employers must provide adequate notice or financial compensation, aligning with statutory requirements to ensure fair treatment of employees.

Emphasis on Employee Rights and Protections

Finnish labor laws prioritize safeguarding employee rights and protections. This includes stringent measures for workplace safety, anti-discrimination statutes, and the promotion of collective bargaining rights to maintain equitable working conditions.

Collective Bargaining Agreements and Industry Standards

Many sectors in Finland operate under collective bargaining agreements negotiated between employers’ associations and trade unions. These agreements not only set benchmarks for wages but also establish standards for working conditions and other pertinent employment terms, fostering a harmonious labor environment.

Additional Employee Benefits and Well-being Initiatives

In addition to vacation entitlements, Finnish employees may enjoy supplementary benefits such as sick leave, health insurance coverage, pension contributions, and various allowances. These perks contribute to overall employee satisfaction and well-being, enhancing retention rates and organizational success.

Commitment to Legal Adherence and Continuous Education

Ignorance of labor laws is unacceptable in Finland. Employers are obligated to remain informed about legal requirements and seek expert counsel if necessary to ensure full compliance with Finnish labor legislation. Continuous education and awareness initiatives are crucial for upholding ethical employment practices and mitigating legal risks.

Understanding Workplace Culture in Finland with Mercans

Finnish workplace culture is known for its unique and conducive environment, shaped by several key characteristics that benefit both employees and employers. Here are some defining features:

• Equality and Flat Hierarchy Finnish workplaces often have a flat organizational structure with minimal hierarchy. There’s a strong emphasis on equality, encouraging employees to voice their opinions and participate in decision-making processes regardless of their position within the company.
• Work-Life Balance Finland is renowned for its commitment to work-life balance. Employees typically enjoy flexible working hours, generous vacation time, and supportive parental leave policies. This focus on balance enhances employee well-being and productivity.
• Trust and Autonomy Trust is a cornerstone of Finnish workplace culture. Employers have confidence in their employees’ ability to perform tasks efficiently without constant supervision. This autonomy fosters a sense of responsibility and empowerment, leading to higher job satisfaction and motivation.
• Open Communication Open and transparent communication is highly valued in Finnish workplaces. Employees are encouraged to share their ideas, concerns, and feedback, contributing to a collaborative and innovative environment. Constructive feedback is also appreciated as a tool for continuous improvement.
• Focus on Quality and Innovation Finnish companies prioritize quality and innovation in their products and services. There is a culture of continuous improvement, where employees are encouraged to think creatively and find innovative solutions to challenges. This mindset drives competitiveness and success in both domestic and international markets.
• Emphasis on Well-being Employee well-being is a priority in Finnish companies, recognized for its importance in overall productivity and job satisfaction. Many workplaces offer wellness programs, health benefits, and initiatives to promote physical and mental health among employees.
• Inclusive and Diverse Diversity and inclusion are integral to Finnish workplace culture. Companies strive to create inclusive environments where employees from diverse backgrounds feel respected, valued, and able to contribute their unique perspectives.
• Social Responsibility Finnish companies often incorporate social responsibility into their business practices. They emphasize sustainability, environmental stewardship, and ethical business conduct, reflecting Finland’s commitment to social and environmental values.

Hire and Pay Employees and Contractors through and PEO Finland.

Steps to Successfully Enter the Finnish Market

• Leverage the Nordic Synergy: Finland, as part of the Nordic region, is culturally and economically intertwined with Denmark, Iceland, Norway, and Sweden. These countries form a highly innovative, high-income cluster with an aggregate GDP of $1.6 trillion and a population of 27.4 million. The Nordic market represents an excellent opportunity for companies with sophisticated, high-quality products, technologies, and services.
• Deep Understanding of Local Dynamics: The Finnish market is characterized by its highly educated citizens and advanced digital expertise. Companies can tap into significant sales potential in digital applications, cleantech, biotechnology, medtech, healthtech, and ICT. The cultural similarity across the Nordics and high proficiency in English further facilitate market entry, making Finland an attractive destination for expansion.
• Establishing a Local Presence with Mercans: A local presence is invaluable for building relationships and gaining credibility. Mercans can help you establish this presence quickly and efficiently by providing a ready-made sales team with deep knowledge of the Finnish market. Our local experts understand the nuances of the Finnish business environment, enabling you to navigate the market effectively.
• Regulatory Expertise: Navigating local regulations is crucial. Finland’s business-friendly environment still requires understanding of the tax system, labor laws, and industry-specific regulations. Mercans can help ensure compliance with these laws, allowing you to focus on growing your business.
• Tailored Localization Strategies: Localization is key to success in Finland. Direct translations often appear clumsy and unpolished to Finnish consumers. Mercans offers comprehensive localization services, ensuring your marketing materials, product information, and customer service resources are culturally and linguistically appropriate. This includes accounting for regional dialects and the unique communication style of the Finnish audience.
• Robust Marketing Strategy: A strong marketing strategy should encompass both online and offline channels. Mercans can help you build brand awareness and generate leads through targeted social media campaigns, participation in local events, and tailored content marketing. Finnish consumers value quality and sustainability, so highlighting these aspects can enhance your appeal.
• Building Key Relationships: In Finland, business relationships are built on trust and mutual respect. Mercans facilitates the development of these connections through our extensive network of local contacts. Whether you need to connect with suppliers, distributors, or local authorities, we can provide the introductions and support you need.
• Continuous Monitoring and Adaptation: Entering a new market is an ongoing process. Mercans provides continuous support to track your progress, gather customer feedback, and adjust your strategy as necessary. Our agile approach ensures that you remain responsive to market changes and consumer needs, maximizing your chances of success.

Overview of The Finnish Interview Process

The interviewing process in Finland shares similarities with many other countries but also has distinct characteristics. Here’s an overview of what to expect:

• Application Submission The process usually starts with submitting a written application, including a CV and a cover letter tailored to the job, highlighting relevant skills and experiences.
• Initial Screening Companies typically conduct an initial screening of applications to shortlist candidates. This involves reviewing CVs and cover letters to assess qualifications and suitability for the role.
• Interview Invitations Shortlisted candidates are invited for interviews. There may be multiple rounds of interviews, especially for competitive or senior positions.
• Types of Interviews
• Interview Structure Interviews typically cover your background, education, work experience, skills, and competencies. Employers also assess cultural fit and alignment with the company’s values.
• Language Considerations While English is widely spoken, especially in multinational companies or industries like IT and finance, knowledge of Finnish or Swedish (the other official language) can be beneficial, particularly for roles involving interaction with Finnish-speaking clients or colleagues.
• Behavioral Questions Expect to answer questions that assess how you’ve handled past situations, focusing on problem-solving, teamwork, adaptability, and leadership skills.
• Company Culture and Values Research the company’s culture and values beforehand to demonstrate your understanding and alignment during the interview.
• Follow-Up After the interview, it’s customary to send a thank-you email to the interviewers, expressing appreciation for the opportunity and reiterating your interest in the position.
• Offer and Negotiation If successful, you may receive a job offer. Be prepared to negotiate terms such as salary, benefits, and start date if necessary.

Onboarding & Managing Process in Finland with Mercans

The onboarding process in Finland is crucial for integrating new employees into a company’s culture and ensuring they have the necessary information, resources, and support to succeed. Reflecting Finland’s progressive work culture and emphasis on employee well-being, the onboarding process focuses on comprehensive orientation, social integration, and continuous support.

• Preparation and Welcome Before the start date, Finnish companies typically send welcome packages to new hires, including information about the company’s history, values, organizational structure, and an overview of their role. Some companies may assign a mentor or buddy to help the new employee navigate their initial days.
• Orientation and Training Upon arrival, new employees participate in structured orientation and training programs. These sessions familiarize them with company policies, procedures, and necessary tools. Finnish companies often emphasize hands-on learning and interactive training to facilitate faster integration and skill development.
• Integration into Company Culture Integration into the company culture is a significant aspect of the onboarding process. Beyond formal orientation, new employees are encouraged to participate in social activities, team-building exercises, and company events to foster a sense of belonging and camaraderie.
• Continuous Support and Feedback Onboarding extends beyond the initial weeks, with companies prioritizing continuous support through regular check-ins, feedback sessions, and opportunities for professional development. Managers play a crucial role in providing guidance and constructive feedback to ensure new hires feel valued and supported.
• Emphasis on Work-Life Balance Finland is known for its emphasis on work-life balance and employee well-being. The onboarding process often includes information about flexible work arrangements, wellness initiatives, and available benefits, helping new hires maintain a healthy work-life balance.

Choosing Mercans for navigating the complexities of the Finnish job market ensures a seamless and efficient experience. With a deep understanding of the local culture, legal requirements, and best practices, Mercans provides invaluable support through every step of the hiring and onboarding process. Our expertise in Finnish labor laws, dedication to employee well-being, and emphasis on quality and innovation make us the ideal partner for your business expansion in Finland. By partnering with Mercans, you can confidently enter the Finnish market, knowing you have a trusted ally to help you succeed.