“The radically changed operating environment has weakened the business expectations of every fifth company in Helsinki. Companies with international operations, however, have brighter expectations than those operating in the domestic market. In an uncertain economic situation, growth can be obtained from internationalisation,” says Marja-Leena Rinkineva, Director of Economic Development, City of Helsinki.
Companies that also have international operations estimate clearly more often than domestic companies that both their number of employees and turnover will increase. The majority of the respondents to the business survey only operate in the domestic market, though almost one fourth of the companies also had international operations, such as foreign trade or subsidiaries. Most of the companies expecting turnover growth were operating internationally and in the information and communication, tourism and accommodation, and finance and insurance industries. Turnover expectations were gloomier than average in the life science industry, the construction industry, the transportation and warehousing industry, and trade.
Half of the business respondents would reform the education system
“The labour mismatch problem can be seen both in the large number of long-term unemployed and in the prolongation of recruitment processes for certain jobs. Solutions must be found, as otherwise it will be difficult for companies to reform and grow,” says Rinkineva, Director of Economic Development.
Almost half of company respondents (46%) felt that there was a need to reform the education system and its contents. The number of companies emphasising the need for a reform was significant in all industries. Deficiencies in vocational education were most often mentioned as a shortcoming in the education system. Companies in the construction industry were the most dissatisfied with vocational education. According to the survey, there is too little cooperation between companies and educational institutions and the cooperation is launched too late, which is why people do not even apply for fields with a labour shortage.
Slightly over one third had used the city’s services; business services were rated the best
Slightly over one third of almost a thousand companies had used one or more of the city’s services in 2021–2022. On average, they considered the services fairly good, as indicated by the fact that all the ratings exceeded three on a scale of 1–5. The companies had used permit procedures the most, though the city’s business services were rated the best. This suggests that we need to focus more on the visibility of business services.
Helsinki seeks to make it easier for companies to obtain labour in many ways. The city has already assumed a more prominent role in managing employment, although the responsibility for employment services will not be permanently transferred to regions and municipalities until the beginning of 2025. Helsinki offers employers help in employment, such as pay subsidies, the Helsinki benefit and recruitment assistance. Almost every tenth of the company respondents had used the employment services offered to employers.
Dismantling unemployment traps, ensuring the availability of affordable housing and speeding up work-based immigration are on the companies’ wish list
According to the survey, reforming social security by dismantling employment traps was the most important means for companies to obtain skilled labour. One third of the companies estimated that this would best facilitate the availability of labour. Dismantling unemployment traps was considered the most important measure in almost all industries. The companies considered the availability of affordable housing the second most important measure. The supply of housing and a suitable price level contribute to how easy it is for companies to obtain labour. The third most important measure taken up by the respondents was boosting work-based immigration through state means, such as speeding up permit processes and adjusting taxation.
The willingness of companies to recommend Helsinki as a location has decreased – the main reason being dissatisfaction with traffic
The companies also took up many other issues that the city should focus on to improve the companies’ service offering and physical operating conditions. Most of the negative feedback concerned traffic arrangements and parking. The problems associated with these also decreased companies’ willingness to recommend Helsinki as a location. Issues related to the fluency of traffic, parking and land use planning in particular were raised as areas for development. The companies also hoped that the city would take a more permissive approach to the purposes of use of the facilities. On the other hand, the companies still appreciate Helsinki’s strengths, i.e. the size of the market, international connections and public transport.
“Addressing the challenges taken up by the companies supports the competitiveness and success of the business sector and Helsinki as a whole,” says Rinkineva.
The city will continue the dialogue with the companies that responded to the survey.
Since 2016, the City of Helsinki has been investigating companies' views on factors affecting the vitality and business-friendliness nature of Helsinki. “Helsinki business survey 2023 – Views about factors affecting vitality” is the fourth survey on this topic. Prepared by Kaisa Saario, a specialist of the City of Helsinki, the survey is based on the responses of 975 companies operating in Helsinki. The survey was conducted by Taloustutkimus on behalf of the City of Helsinki's Economic Development division (Business Helsinki).