Finland’s labour market rigidity is a bottleneck for recruitment, according to a survey commissioned by the Finnish Business and Policy Forum (EVA).

EVA’s survey polled more than 1,200 high-level business executives in Finland on the country’s competitiveness situation. Competitiveness was divided into 21 components and business leaders were asked to assess both the current state and the development in the near future.

It found that Finland's competitiveness situation in 2018 improved compared to 2013, but it is still burdened by the same problems as before.

The two long-term problems of competitiveness are a rigid labour market and heavy taxation.

“Finland’s competitiveness is under threat from wage rigidity, income taxation, a shortage of skilled labour and ownership-related taxes,” EVA stated.

Approximately 84% of the respondents said that wage rigidity is a relative weakness for Finland and are less flexible than other countries. Meanwhile, seven in ten respondents, or 70%, said that the entire labour market system has fallen behind the systems of other economies.

“The rigid labour market is a clear obstacle to growth and a bottleneck for recruitment,” Emilia Kullas, the director of EVA, said.

Finland was deemed to provide a worse operating environment for business than other countries by 34% of the respondents and a better operating environment for businesses by 20% of the respondents. Almost a half, or 46%, of the respondents viewed that the operating environment here is comparable to those in other rival economies.

Five factors propped up Finland’s competiveness including the information and communications technology infrastructure, protection of property, basic and secondary education, higher education, and business management practices.