Unemployment fund head: employers should boost attractiveness

Photo: Sander Ilvest

For several years running, disarray is order of the day at Estonian labour market – on the one hand, entrepreneurs converged in Tallinn and Harju County lack labourers; on the other, in several rural regions joblessness remains an issue.

A vicious circle: finding no employees, entrepreneurs will either leave Estonia or refrain from starting businesses altogether. To solve the hectic situation, Unemployment Insurance Fund (the Töötukassa) started the year by launching several new labour market services which, according to its chief Meelis Paavel, have been briskly engaged.

There have been many rather major lay-offs recently, and yet several enterprises are languishing in lack of working hands. How does it look from Töötukassa point of view?

For us, there have been much worse times. In 2008–2010, with the big wave of bankruptcies, lay-offs abounded. We have survived Kreenholm’s bankruptcy and other such cases, so I dare to generalise that with lay-offs the present situation is in no way critical.

Actually, last year’s major lay-offs were in the public sector, such as Police and Border Guard Board. To that backdrop, perhaps the current lay-offs just strike the eye a bit more. They have been weighty for some regions, or fields. 

Like at the end of last year we had PKC in Haapsalu, VKG in Ida-Viru County, this year we had Perevara in Jõgeva County. While with VKG there were some economic policy decisions, then PKC was seeking a cheaper place for production and the lay-offs at Perevara had a long story to it – this is a major agricultural company in Estonia that wanted to keep in step with the times but, for various reasons, they failed to do that during the good times.

Have we come to the times where Estonians do not want to do the simple jobs anymore? We have these large job fairs organised, we have people as if, but no contracts result. I have heard some factories say they cannot do night shifts any longer as the staff is unwilling to work at night.

Rather, the attitude is that with unskilled jobs, the working conditions are also lousier – generally speaking. The working environment, the attitude, and the salary. The salary is surely very important, no doubt. It is very hard to get people to work for minimal pay – this is seen everywhere, talking to employers and contactors. Add the recent election moods and the promises given, and the expectations are surely rather high.

Various organisations have reprimanded Estonia for structural unemployment and have underlined the need for retraining of employees. How much, do you think, has Estonia made progress with that?

Surely steps are being taken. We have the OSKA (system for coordinating development of people’s skills – edit) at Kutsekoda (The Estonian Qualifications Authority). This is a definite outlet for the years-long debate at Government Office, aimed at sifting out the vanishing and growing sectors and thereby try to direct the retraining. A very praiseworthy activity... I do hope it would lead to state level agreements regarding our direction.

Has the problem thus far been that no definite direction has been agreed?

I am a bit sceptical as when during the last economic crisis we discussed things with our European colleague who did what and who had which priorities set in place, they all said the crisis messed up all plans and nothing held true. All that mattered was flexibility to react. Very different areas of the economy were hurt. There we not much logic.

Surely it is possible and needful to agree, and in our house we have tried to set priorities, but we must leave room for the unexpected.

With the job fairs held all over the land, the plan is also to send a signal or advice to entrepreneurs that in the current situation they need to be a lot more active in offering jobs and opportunities. Nothing doing, the situation is now so different that employers need to be more attractive – not at the high end only, but also in the fields where the salaries cannot keep up the tempo.

People want to be more mobile and they want flexibility. Why not work at multiple jobs, and partial working load. We have still not gotten accustomed to that – at the moment, working part-time is very stiff here, actually. We do not understand or feel what it actually means. This is all to be discussed, near term.

Why aren’t Estonian workers mobile? Why aren’t they ready to go work in Keila from Haapsalu?

Good question, I have been thinking about that a lot myself. In the mornings, I drive to work 45 minutes if the traffic is bad, but half an hour at any rate. Top of the public transport trouble, perhaps this is a small country attitude. We are just accustomed to that.

Various experts have asked the same: like with high unemployment in Ida-Viru County, why don’t you have buses going to Tallinn, as over there the need for working hands is greater. 

We do have examples of people being moved, but that is not the norm. This is rather the exception. Especially if the work does not spell a rise on the career ladder, then it is not wanted. Rather, they want to find work close to home. Take the Jõgeva County lay-offs – even there, it was obvious that people do not want a job in their own county; it must be in their native village. 

At the beginning of this year, quite unexpectedly Töötukassa came out with various labour market services. What are these aimed at?

At the very contradiction that, on the one hand we have people temporarily or longer-term dropping out of the jobs market, while at the same time we have labour shortage.

With the career counselling offered to all, we want everyone who has any idea in their head about working to be able to approach our career advisers, starting this year, and talk it through. Then they may see if there is a need for extra education, make some other choice. People that have been on the labour market for a long time are not too eager to make changes. That may mean that one day you are forced to make them.

We must also reach all 8^th to 12^th graders – and aiming at direction with options on labour market, not where to go study. This is a preventive measure. One may ask that perhaps we are too late... there have been such activities before, but alas, counselling has rather been school system centred and the labour market dimension has been missing.

The measure «My First Job» is directed towards the major risk group i.e. the youth without education, specialised training or a job. The prerequisite is that a young person aged 17–29, practically without education, with no specialised education, has not worked for a year during a three-year period or has only worked for two years in his life, has been our client for four months and has not found a job. We will offer an employer the option that during a year we pay 50 percent salary compensation of the worker’s monthly wages and the support will be no larger than double minimum salary i.e. over €780 currently. With such young persons, they should enter an unspecified-term or at least two-year contract and then, as a bonus, we also compensate the training expenses so the employer will be able to train him, according to need an as agreed with us, for up to €2,500.

We got started at the beginning of the year and by now over 30 young people have found a job this way; also we have issued letters of guarantee regarding training. Real use of career counselling service has already been made by over 700 people, though we only launched this in February.

And now, all in retirement age are able to use our labour market services. I do rejoice as allegedly the interest is significantly up. Here, our clear goal is to help such people remain on labour market as are currently retired.

Looking further ahead at how many working-age people we will have in a few years, these will be some twenty thousand less. If we wish to maintain the current employment level, all we can do is help he already low unemployment to fall even lower, and to help the inactive people to become active. These are our only internal resources.

UNEMPLOYMENT DOWN ONE PERCENT

	Unemployment	Registered as unemployed
2013	5.8%	37,062
2014	4.6%	29,502