The Ministry of Economic Affairs and Employment claims to have concluded an "experiment to employ immigrants" based on the Social Impact Bond (SIB) model of impact investing. According to the government, more than 1,000 people of foreign origin have started working through this initiative.
"The preliminary results are encouraging," says the Ministry of Employment.
The experiment was based on the need to employ and integrate immigrants more quickly and to help employers have access to workforce. The objective was to boost the employment of immigrants by bringing together companies and employees and by customizing the training of immigrants according to what is needed at workplaces.
Helsinki, Turku, Tampere, Oulu, Joensuu
According to government information, the project was carried out in the Greater Helsinki area, Southwest Finland (Turku area), the Tampere region, the Oulu region and Joensuu in 2016–2019.
A total of 2,217 immigrants participated in the experiment, of which 1,034 were employed by the end of September 2020. Of the participants, 1,692 received training for more than 70 days. More than 50% of those who completed the training were employed.
The logistics, hotel and restaurant, cleaning, construction, financial administration, information technology and manufacturing industry sectors employed the most immigrants in the project.
“The experiment was significant because it tested new ways of funding and tailoring integration training to the needs of companies. The preliminary results are promising with more than half of the participating immigrants finding employment,” says Sonja Hämäläinen, Migration Director at the Ministry of Economic Affairs and Employment.
Financed with private capital
A form of impact investing called Social Impact Bond (SIB) was used in the experiment.
In the SIB model, the public sector determines the performance targets of the experiment and pays only if they are achieved. Such experiments are financed with private capital and the state pays a return on the investment if the performance targets are met.
The Ministry of Economic Affairs and Employment will hire an external evaluator to assess the results of the experiment. The evaluation will be conducted in 2021–2022. It will compare the tax payments and unemployment benefits of those participating in the experiment with a reference group.
The State considers the experiment successful if the participants pay more taxes and receive fewer unemployment benefits than the reference group.