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May 5, 2022

Talent Shortage Is Getting Worse In Finnish Startups, But Confidence In Growth Remains Strong

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Almost 75 percent of startups reported a slight or large increase in staff over the next three months.

The Finnish Startup Community (FSC) publishes its startup barometer for the first time. In the future, the purpose of the quarterly publication is to map the views of companies and investors operating in the startup ecosystem on their own and the surrounding economic situation.

According to the barometer, Finnish startups have strong trust in their own growth potential. But no similar confidence can be found in the surrounding economic situation.

The deterioration of the security situation in Finland’s immediate environment caused by Russia is also a cause for concern for the companies. Those that responded to the Finnish Startup Barometer have significantly increased their staff in recent years. The majority of companies estimate that they will increase their headcount in the near future. However, the lack of a skilled workforce is currently perceived as an obstacle to growth, and there are also indications from other statistics. As many as 56 percent of respondents mentioned a shortage of skilled labor as a barrier to growth, or at least slowing it down. “It is in our nation's interest that the solution to the talent shortage is finally tackled with strong measures. In the future, Finland’s new high-productivity jobs will increasingly be created by startups,” reminds FSC economist Youssef Zad.



Creative solutions

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Startups creatively tackle their barriers to growth. “The competition for experts in the market is fierce and the attraction of experts must be based on a variety of means,” says Mikael Thuneberg, CEO and founder of Supermetrics. “For example, we look at the salaries of our employees on a quarterly basis instead of annual salary rounds, which allows us to react quickly to changes in the market situation. In addition, through our stock option program, all of our employees will benefit from the fruits of growth, ”says Thuneberg. "In addition to salary and various benefits, Supermetrics' strong and diverse organizational culture also adds to its attractiveness."

The restaurant startup Huuva is also looking for new solutions. “While our growth has been rapid, the constant challenge we’ve faced since the beginning of Huuva is finding the right talent,” says Ville Leppälä, CEO and co-founder of Huuva. “We’re on the lookout for the technical people, but also for folks skilled in international growth and kitchen operations, from line cooks to expansion managers. Besides having competitive salaries, we're probably the first employer ever offering signing bonuses for kitchen staff,” says Leppälä.

According to FSC economist Youssef Zad, startups coordinate labor market demand and supply according to a textbook example. “The price of labor, that is the level of wages, must seek a new balance if there is a shortage of labor. Huuva's approach to skills shortages is very topical given the recent labor market disputes in Finland,” Zad ponders.


Barometer summary
Youssef ZadEconomist