There is a persistent salary gap between Uusimaa and the rest of Finland

A recent labour market survey conducted by TEK demonstrates that the salary of TEK members varies by region. The most apparent salary gap exists between Uusimaa and the rest of Finland.

In Uusimaa salaries are some 8% higher even if background factors such as position, work task, employer's field of operation and length of work experience are standardised.

According to TEK’s Salary Researcher Tuunia Keränen, the salary gaps between other regions have more to do with the sector of employment and the kind of work the respondents were doing. The salary differences between regions are also explained by differences in the structure of the sectors and their position hierarchies, for example.

– In Kymenlaakso and South Karelia, for example, there is a lot of forestry industry, and the median salary of forestry employees is higher than in many other sectors. An exceptionally high number of respondents from Satakunta were employed in middle management, which means their salaries were higher than those of specialists, Keränen says.

– In many regions with low median salaries, a higher proportion of the respondents were employed in the municipal sector where the median salary is lower than in the private sector.

TEK members may also browse salary levels in the Salary Surveyor service. The Salary Surveyor takes the gap between Uusimaa and other regions into account.

The salary gap has remained static in the labour market survey for years. What causes the gap?

– I would assume the salary gap is the result of the costs of living being higher in Uusimaa, especially in the Helsinki metropolitan area. The same kind of difference is also visible internationally, where the salary level is higher near large cities, especially capital cities, than in the rest of the country.

Salaries increased

In the labour market survey conducted by TEK in October 2021, the median salary of an academic engineer employed on a permanent basis was 5,225 euros and the average salary was 5,687 euros per month. The same wage figures for academic engineers who graduated in 2021 were 3,720 and 3,770 euros.

The median salary of academic engineers rose by 2.5 percent from the previous year. Salary development has been positive for other degree holders as well. However, in smaller respondent groups there is much more uncertainty in the results, and annual fluctuations into different directions are not uncommon.

Monthly earnings* in October 2021

*Monthly earnings of regular full-time work in a non-fixed-term-employment relationship
**Confidence interval equivalent to a probability of 95 %
***No scientific postgraduate degree

General raise is the most common reason for increased salary

75% of respondents in full-time employment estimated that their salary had increased from the previous year. The salary had remained the same for 17% and dropped for 3% of respondents. The share of those who received a raise remained unchanged from the previous labour market survey conducted in 2020.

The most common reason for a raise was clearly a general salary increase, which was the case for 64% of those respondents whose salary had increased.

29% of such respondents had been given a salary increase based on personal performance, or a so-called merit raise. 13% of those who had received a raise said it was based on transferring to a new work task with the same employer, and 12% had received a raise after changing jobs.

When compared to the previous year, the monthly salary of those who received a merit raise grew by an average of 295 euros (median raise). A new position or work task with the same employer resulted in an average raise of 500 euros and changing employers increased monthly salary by an average of 700 euros.

In 2021 many sectors paid raises of approximately 2%, some of which consisted of the general raise and some of the instalment distributed by the employer. However, companies may also have reached different raise solutions in local negotiations.

Performance-related pay most common in the industrial sector

Approximately six out of ten respondents who were full-time employees stated that their workplace had a performance-related pay system in place. Performance-related pay is most frequently used in the industrial sector where three out of four respondents said they were included in such a system.

When viewed by position, performance-related pay was more common in managerial than specialist roles. 70% of respondents working in executive management, 71% of middle management and slightly over a half of specialists were included in a performance-related pay system.

Of those included in such a system, 79% had received merit pay over the last 12 months. This share has remained virtually unchanged since the 2020 survey.

The average size of merit pay had also remained the same: 7% of annual earnings (median). Relatively, the largest merit payments were paid in the industrial sector and elsewhere in the private sector, where their share was 8% of annual earnings.

Position also had an impact on the size of merit pay. The median share of merit pay was 12% for executive management, 8% for middle management and 6% for specialists.

Prospects have grown brighter from the previous year

The respondents evaluated their near future to be much better in both personal and professional terms than they did a year ago.

86% of respondents in full-time employment considered the situation at their workplace to be stable or quite stable while 91% thought the same about their personal situation. A year ago, the same figures were 71% (situation at the workplace) and 83 % (personal situation).

A total of 2.6% of respondents were unemployed or laid off, while the same figure was 4.5% a year ago.