JHL criticises the State productivity programme
for concentrating on job cuts

JHL (15.06.2010 - Juhani Artto) In Finland the State has been running a productivity programme since September 2003. It has been updated a few times and the present programme reaches to the year 2015. The aim of the initial programme was to maintain a balanced State budget in the years to come and to relieve labour shortages when the baby-boom generation retires. At least this was what the architects of the programme reasoned at the beginning. These arguments were also regarded as sound by trade unions.

Originally the programme was intended to genuinely improve productivity by rationalising procurement, smart utilisation of modern IT systems and effective use of office and other space. Soon, however, it became obvious that measures -planned and implemented in the name of the programme- focused heavily on job cuts instead of real productivity improving measures.

Since then the Trade Union for the Public and Welfare Sectors JHL and several other trade union organisations have had a critical attitude towards the programme. In the last few years this criticism has become more categorical, and now JHL, and also the largest union confederation SAK, are calling for termination of the programme.

A clear indication of the programme’s focus on job cuts is the eagerness of decision-makers to announce figures on how many jobs have to be cut in the coming years. The first figures represented half of the forecasted number of jobs becoming vacant due to retirement or other reasons. Later on these figures have been moderated downwards from earlier published projections but still the results of the programme are mainly weighed by looking at the numbers of jobs that have been eliminated.

This policy has led to serious disregard for the tasks various State organisations are supposed to handle and the services they should offer. For example, the Radiation and Nuclear Safety Authority Finland simply cannot do the next round of job-trimming demanded by the productivity programme, Jukka Laaksonen, the Director General of the organisation recently stated.

The job elimination targets are arbitrary and not based on measures that would see a reduction in personnel bringing about real productivity growth, critics are keen to point out.

Tellingly, The National Audit Office arrived at much the same conclusion in its study on the productivity programme’s performance during the 2007-2010 period. The study was published in April 2010. The report reminds us that originally the programme aimed to genuinely increase productivity by 2 per cent per annum. This, however, was forgotten once this 2 per cent per annum was interpreted as being consistent with job elimination targets, the study states.

A 2008 study made by PricewaterhouseCooper, commissioned by the Ministry of Finance, did not find anything very positive to say about the programme either. Reducing personnel does not necessarily improve productivity, the global consultant giant stressed.

In 2008 JHL declared bluntly that the weak basis justifying job elimination targets have made it difficult for State employees to commit themselves to the productivity programme. In 2008 over 85 per cent of respondents to JHL’s questionnaire (which sought to canvass the mood of union activists) thought that the programme had had a negative impact on workplace atmosphere and well-being at work. Two thirds of the respondents were of the opinion that their work units had become weaker.

Päivi Niemi-Laine, the director of JHL’s research and social policy unit, hopes that such harsh criticism will influence the thinking of decision-makers. However, she is a bit sceptical, as widespread criticism of this whole exercise has persisted for several years now without any major changes in the way the programme is implemented.

The ideology of job cuts and subcontracting unfortunately seems to dominate decision making in both the private and the public sectors, she says.