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How private investors could make money from integrating immigrants in Finland

How private investors could make money from integrating immigrants in Finland

| Text: Marcus Floman, photo: Cata Portin

Finland is the first Nordic country to adopt the model where private investments are being used for social programmes. So-called Social Impact Bonds, or SIBs, also help private investors fund employment programmes for immigrants. If the private players manage to do better than the public sector, they will be rewarded.

The Finnish SIB programme for integration is the largest of its kind in Europe, worth €14.2m. The aim is to find work for 2,500 people by 2022. So far 150 people have got a job.

The initiative for the SIB programme came from the Finnish Ministry of Employment and the Economy in cooperation with Sitra, the Finnish Innovation Fund. But the programme is administered by Epiqus, a fund manager specialising in social investments.

That means the state has outsourced both the execution and the financing of the trial to the private sector. The public employment and business services (previously known as the labour market services) are still playing an important role as parties to the programme, however. The hope is that the programme will make money for the state in the form of more tax payers.

From lottery to language training

The SIB programme complements existing public integration pathways available to asylum seekers and immigrants. The main difference is that taking part in SIB is voluntary. When an unemployed person agrees to take part, he or she is entered into something akin to a Green Card lottery. 70 percent are selected for the programme while 30 percent are allowed to apply for jobs though other channels.

Those accepted into the programme will then be given Finnish language training with a focus on a vocational vocabulary. This can last from a few days up to four months, depending on the individual’s needs. Later, participants can target the trades they would most like to work in.

Jama-Farhan Abdi arrived in Finland just under nine years ago from Somalia, and has been studying Finnish via the SIB programme since September 2017. He is one of those who has succeeded in finding a job, albeit in a different trade than what he had hoped for.

“In Somalia I worked as a barber for more than six years, and I’m good at it. But here in Finland it is not so easy to start a hair salon. You need a lot of permissions and startup capital,” he says.

“When I heard about the SIB programme I was initially looking for jobs in the construction industry, for instance cleaning properties. But there were no such jobs for me. So instead I have been working as a kitchen assistant,” says Jama-Farhan Abdi.

150 jobs so far

Nearly ten Finnish companies are part of the SIB integration programme, offering labour matching services. At Epiqus AB, the administrators for the entire programme, Jussi Nykänen, underlines that the aim is not to create new jobs.

“With the help of investors’ money we buy services from a range of service providers. Their task is partly to offer tailored language and cultural training to immigrants who have been chosen for the programme, and partly to find jobs. From the very start we map which skills and interests people have,” Jussi Nykänen.

So far around 150 people have found a job. The aim to employ a total of 2,500 people by the end of 2022 might look tricky, but at Epiqus they believe the number of employees is rising since the programme is being expanded to include four new regions this year.

“Right now nearly 500 people are involved in our programme. Those who are not in employment yet, take part in our training. They will hopefully find work in the very near future,” says Nykänen.

One of the companies that have signed up with the programme is Hanken & SSE, which offers education, workplace training and helps academically educated immigrants find work. Biisoni is another, which focuses on finding work for jobseekers in the service sector.

Tatu Lintukangas is vice president at Entry Education. They are responsible for language training for immigrants trying to find jobs through Biisoni.

“The greatest advantage with the SIB programme is its flexibility. It allows us to tailor educations to meet the individual’s need. If we see that a person on the programme does not need four months of language training, we create a different model for him or her. Personally, I met someone doing language training for one day, whom I could employ in my own company as a trainer.

“The common thing to do is to try to organise as many job interviews as possible for our participants. Our partners at Bison might have learned about a company which needs labour. They will then tell us to ‘choose five people who might be suitable, and we will recruit 0-3 of them’.”

Labour matching sometimes works, sometimes not

As I arrive at the Entry Education’s offices, Finnish language teacher Laura Pietiäinen is going through the last exercise for course participants in today’s lesson. Kurdish Yadgar Hussein was told about the SIB programme by a contact at his local employment and business services office. He has been with the programme in just over a year now.

“I worked as a truck driver in Vuosaari Harbour, via a work training programme. But that work ended. My aim is to train for a particular trade. I wouldn’t mind driving a truck, or work in a warehouse or get a job as a security guard,” says Yadgar Hussein.

“I would like to continue working at the harbour, but there were no full-time jobs there – only individual days. So now I am attending courses to find a job somewhere else.”

Jama-Farhan Abdi from Somalia takes part only in the tailored Finnish language lessons once a week, since he has now found work. The job as kitchen assistant for a catering company serving lunch restaurants in schools and workplaces was preceded by a few weeks’ education and a short period of workplace training. It is a tough job.

“I have to work nearly every day in different lunch restaurants, it is very tough. In the morning, an app tells me about an offer to work the next day. I can then accept it – if I am ill or something else has come up, I say no.”

Jama-Farhan Abdi says he often has to get out of bed at six in the morning in order to find out which busses or trains he needs to take to get to that day’s place of work. Abdi moved to Helsinki less than a year ago, so to him most of the city is unknown.

“Sometimes I get to work for several days in the same restaurant, but that is the exception.”

Have you asked your employer about the chance of staying in the same workplace together with colleagues you know?

“Yes, I have spoken to them; they say ‘we feel you – we understand’, but the need for manpower in different restaurants changes all the time, so they can’t promise anything.”

He tells us he is on a temporary contract.

“The pay in my current job is not good, so I am also applying for other jobs, as a cleaner.”

Money as a driving force

Bluntly speaking, all the businesses taking part in the SIB programme have one very strong motivation: Money. The quicker a person on the programme finds a job, the better for the service provider.

“It is of course good for the immigrants who find jobs, that is the primary goal. But we get money per employed individual. After that, another person can join the education programme.”

Tatu Lintukangas’ company Entry Education is set up to prepare participants for the trades that many low-skilled people need as an entry point to the labour market – like restaurants, cleaning, the foodstuffs industry and the postal service. The jobs, as Lintukangas puts it, demand “the right attitude”, and good enough Finnish language skills to make it safe to work.

“But we do not guarantee any jobs. We are talking about real jobs in the real labour market. What we can promise is to organise job interviews,” says Lintukangas.

Who benefits the most from this type of integration?

“Our model does not suit everyone. It is best for a person who is motivated for learning Finnish and who wants to build a career starting in some of the labour market’s entry-level trades. But for those who have a clear idea of a dream job with a particular exam as a goal, well for them the traditional language and education pathways into working life are far more suitable,” says Tatu Lintukangas.

Helps youths and immigrants across the threshold

Tatu Lintukangas (above) heads Entry Education which helps prepare participants for jobs in trades like restaurantsclearing, foodstuffs and the postal service.

Integration SIB in Finland

The SIB programme for integration has so far created networks between labour market authorities, businesses and immigrants in the province of Uusimaa, with a focus on Helsinki and the province of Varsinais-Suomi, with a focus on Turku. The programme is now expanding to the port cities of Oulu in the north and Kotka in south-eastern Finland, plus Jyväskylä and Tavastia.

The SIB programme will be taking on new participants until the end of 2019. All the participants’ employment and periods of unemployment are followed up over three years, as part of the project.

At the end of 2022, 70 percent of those who were chosen for the SIB programme via ‘the lottery’ will be compared to the 30 percent who were declined and who have been trying to find work in other ways. They will be compared by adding up both groups’ total tax contributions, minus how much they have taken out in unemployment benefits.

If the SIB group has created more tax revenue than the other group, the private investors that provided money for the programme get 50 percent of the gain.

Or as Jussi Nykänen at Epiqus AB puts it:

“If those who participated in our programme bring in 10 money units in tax revenue and the comparative group brings in four money units, the state has made a gain of 6 money units. Private investors will get three units back from that.”


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