Ten municipalities in Finland enter co-determination negotiations amid staff-related savings

In Finland, at least 10% of municipalities are entering co-determination negotiations this year, with nearly 40 municipalities seeking staff-related savings. For example, in Orimattila, negotiations have resulted in the layoff of ten employees so far this year. Cities like Hamina and Tohmajärvi have also concluded similar discussions. Ongoing negotiations are being held in municipalities such as Turku, Muurame, and Liminka.

Juho Ruskoaho, Chief Economist of the Municipal and Welfare Area Employers KT, noted that while the number of negotiations varies, this autumn appears more challenging compared to previous years. He mentioned a notable increase in negotiations during the pandemic in 2020, driven by lockdowns and economic factors.

Many municipalities aiming to avoid layoffs are opting for alternatives, such as leaving vacancies unfilled, not hiring replacements for retirees, and not extending fixed-term contracts. Ari-Veikko Anttiroiko, a docent at the University of Tampere, raised concerns about potential risks in these strategies, emphasizing that cuts might occur in areas that are easiest to reduce, rather than where they are most needed.

In Orimattila, the city plans to halve its number of managers, reducing the total from 20 to 10. City Manager Kalle Larsson stated that this organizational change aims to achieve savings while streamlining the management structure.

According to Minna Punakallio, Chief Economist of the Association of Finnish Local and Regional Authorities, administration is often a target for cost-cutting, but excessive combining of roles can pose risks. Overburdened staff might lead to a decline in service quality, which is a concern for both residents and the municipalities themselves. Larsson confirmed that the reduction in staff will impact both employee workload and service availability. As municipalities restructure, the number of crisis municipalities is expected to rise, with one merger already planned for next year.