pp.kk.vvvvTekijä 2 EK represents The entire private sector and companies of all sizes 35 branch associations About 16,000 member companies, of which 96% are SMEs Over 70% of Finland’s GDP Over 95% of Finland’s exports About 950,000 employees in member companies
pp.kk.vvvvTekijä 3 Member Federations of EK Association of Finnish Furniture and Joinery Industries Association of Logistic Enterprises in Finland Association of Social Services Employers and Businesses Association of Support Service Industries, ASSI Chemical Industry Federation of Finland Coastal and Internal Waterway Employers’ Association Confederation of Finnish Construction Industries RT Employers’ Association for Transport and Special Services Employers’ Association of Private Educational Institutions Employers’ Association of the Special Branches Employers’ Federation of Road Transport Federation of Finnish Commerce Federation of Finnish Financial Services Federation of the Finnish Media Industry Finnish Association of Consulting Firms SKOL Finnish Energy Industries Finnish Food and Drink Industries’ Federation Finnish Forest Industries Federation Finnish Hospitality Association Finnish Plastic Industries Federation Finnish Port Operators Association Finnish Shipowners’ Association Finnish Special Purpose Shipowners' Association General Industry Federation Kulutustavararyhmä Pharma Industry Finland Private Employment Agencies Association Private Healthservice Association Property Maintenance Association Technology Industries of Finland The Employers' Association TIKLI The Finnish Cosmetic, Toiletry and Detergent Association The Rubber Manufacturers’ Association of Finland Ålands Arbetsgivareförening
pp.kk.vvvvTekijä 4 EK activities Regional OfficesEK Brussels Logistics Energy Environment and Climate Sustainable Development Business Law Competition Information Society Trade Policy and International Relations Economy Taxation Employment Finance and Welfare Business Cycles and Trends Competitive- ness Collective Bargaining Development of Labour Market Labour and Social law Statistics and Surveys Corporate Security Business Development Education, Training and Qualification Requirements Labour and Immigration Research and Technology Business Services and Financing Communications Business Infrastructure Business Environment Economic Policy Industrial Relations Innovation Environment and Competences SME-Affairs
How has euro affected the Finnish companies and economy? 27.4.2010 Simo Pinomaa Senior Economist Confederation of Finnish Industries EK
pp.kk.vvvvTekijä 14 Why did consumers feel that the euro raised prices even though statistics show otherwise? Consumers had expected prices to rise as a result of the euro already before the transition had even taken place Consumers tend to remember price increases better than decreases The prices of many cheap (cup of coffee) items tended to rise affecting price perception although the real affect on prise level was small The food prices in January 2002 increased 7.0 percent Rounded conversion rate in nearly all euro countries happened to be higher than the precise rate –1.8 percent on average. –In Finland the rounded conversion rate (6) is 0.9 percent higher than the actual rate (5.94573).
pp.kk.vvvvTekijä 15 Impact on markets, sales and competition Psychological prices (for example, 99 euros) A dress costs Fim 299 (about 52 euro) => 49 euro (6 % reduction) A candy bar costs Fim 10 (about 1,7 euro) => 1 euro (41 % reduction) => The company may have to modify its product design and packing => Implications to production and procurement
How labour markets have reacted? - No more devaluations
pp.kk.vvvvTekijä 31 Finnish industrial relations model: typical features Traditionally a high rate of organization – both employers and employees (70 % of employees are members in trade unions) 90 % of employees are covered by collective agreements Branch-level collective agreements are generally binding Local bargaining today: –Collective agreement is already today allowing local bargaining in many cases on wage increases and working time arrangements Long traditions: employer and employee confederations (=social partners) established over 100 years ago
pp.kk.vvvvTekijä 32 The need for more flexible wage system It should be possible to adjust wages and other labour costs to cyclical variations. This would require that wage increases can be determined more on the enterprise or division level. Variation of basic wages and salaries are often difficult to apply because binding nature of the collective agreements. Therefore profit based bonuses have become fairly common in Finland. Nowadays about 1/3 of manufacturing blue collar workers and 2/3 of white collar workers receive result based bonuses. In terms of magnitude, they average 5 per cent of annual earnings.
pp.kk.vvvvTekijä 34 Future of collective bargaining in Finland In the future, collective bargaining should: –strengthen competitiveness, –boost productivity, –ensure better employment and balanced increase of purchasing power EK will no longer negotiate comprehensive income policy agreements; employers and employees will negotiate on sectoral level, shifting more and more emphasis on workplace decision-making Change of role, but EK’s role in –drafting labour and social legislation in tripartite co-operation –managing and revising social security schemes in tripartite co-operation –bipartite negotiations with the trade unions will remain the same EK encourages wage determination at company level to reflect better productivity and individual performance Challenges: –how to control the wage race better? –how to improve internal and external coordination?