Updated: Aug 5
Imagine a situation in which AI screens hundreds of job applications in a matter of minutes and recommends the best candidates for interview, or optimises a complex shift schedule while taking into account the needs and preferences of thousands of employees. This is no longer distant wishful thinking, but a reality in many organisations. According to research, 52 per cent of Finnish organisations use AI solutions in HR tasks. Although adoption is still fragmented, the potential is enormous: AI can make recruitment, onboarding and offboarding processes more efficient, facilitate the allocation of shifts and tasks, support performance management and produce more advanced people analytics.
However, AI is only as capable as its users. Using intelligent tools effectively requires HR professionals and managers to be trained and to understand the applicable ground rules so that the benefits can be achieved responsibly and sustainably. At the same time, more is required from employers: the use of AI raises legal, ethical and practical questions that cannot be resolved merely by producing an AI strategy document. Legislation is imposing increasing obligations on the use of AI, most recently through the EU AI Act, which sets requirements for both providers and users of AI applications.
Introducing AI: needs, risks and employee participation
An employer must address several important issues before introducing an AI system into HR management. The first step is to identify the need for which AI is intended to be used and assess the associated risks. Employment and data protection legislation in particular require employers to assess in advance how new technology may affect employees. If, for example, an AI-based tool supporting recruitment is to be introduced, this concerns the very core of processing job applicants’ personal data. The employer must identify and justify why personal data is processed, how and to what extent it is used, and what changes the AI system may require in existing practices or in the information provided to applicants. Data protection legislation requires, among other things, an assessment of risks relating to personal data, including a data protection impact assessment where applicable, before new technology is introduced, regardless of whether the technology uses AI. In practice, the use of AI systems in HR almost automatically means that risks to employees’ privacy must be identified and the necessary safeguards determined in advance. Fully automated decision-making in recruitment, such as screening job applications without any human involvement in the final decision, is generally prohibited under data protection legislation. The recruiter must therefore always retain a meaningful role in the process.
Employers also have cooperation obligations when the organisation’s operations are developed by introducing new technology. Every organisation employing at least 20 people must engage in dialogue with its personnel to safeguard employees’ opportunities to influence matters affecting them. The introduction of AI-based solutions in HR is clearly such a matter and should be discussed with personnel well in advance. Employers with more than 50 employees are also subject to an express, simplified change negotiation obligation when introducing new technology. If AI is expected to reduce the need for labour or materially alter employees’ duties, more extensive change negotiations must be conducted with personnel before implementation. All these cooperation procedures must take place at the appropriate time, meaning before procurement decisions are made, in order to meet the requirements of the Act on Co-operation within Undertakings.
The Occupational Safety and Health Act also applies to the introduction of AI in the workplace. A central principle of the Act is that employers must identify work-related hazards and harmful factors and address them proactively. AI may introduce new dimensions to traditional occupational safety considerations: what kinds of risks and strain may arise from its introduction, and how should they be prevented? Learning to use new technology may, for example, place a psychological burden on employees, while concerns about their rights may cause stress when AI becomes involved in HR processes and managerial work. Employers must assess these risks as well and provide appropriate induction, support and measures to safeguard employee wellbeing during the change.
It is already widely recognised that the use of AI presents challenges for non-discrimination in working life. Under the Non-Discrimination Act, an employer may not treat employees or job applicants differently on discriminatory grounds such as age, gender or another personal characteristic. Because AI learns and draws conclusions from the data provided to it, it may absorb biases hidden in that data. A recruitment algorithm may, for instance, favour applicants on the basis of gender rather than merit. If most people recruited in the past have been of a particular gender, the AI system may interpret this as a “model of success”. Eliminating discriminatory bias from AI is difficult because algorithms are often opaque to users and their decision-making may be difficult to explain. On the basis of the current Government Programme, a research project has been launched in Finland’s public administration to identify and prevent discrimination risks associated with AI.
The EU AI Act will gradually tighten the requirements
The European Union has also entered the field of AI regulation. The EU AI Act entered into force in summer 2024 and introduces new requirements for the use of AI. Since February 2025, organisations have already been required to ensure that their personnel have an adequate level of AI literacy. AI literacy refers to employees’ ability to assess AI-generated outputs critically and to use AI responsibly and appropriately.
Further obligations will follow from August 2026, when the core risk-based requirements of the AI Act begin to apply. The Act distinguishes between four categories: prohibited AI practices, high-risk systems, limited-risk systems and minimal-risk systems. This will be a significant milestone for employers using AI, as many systems acquired to support HR processes are classified as high-risk AI systems under the Act. A high-risk classification also brings more extensive statutory obligations for the employer using the system. Compliance with the AI Act is reinforced by substantial administrative fines, which may amount to millions of euros depending on the size of the company.
Applications used to recognise employees’ emotions are prohibited where they analyse matters such as an employee’s intentions or job satisfaction. The use of biometric identifiers to categorise individuals on the basis of ethnic origin, political opinion, religion or sexual orientation is likewise prohibited. Social scoring based on personal characteristics is also prohibited where it results in detrimental treatment, such as restricting or preventing career progression. Subliminal manipulation and the exploitation of vulnerabilities are not permitted either.
In the terminology of the AI Act, an employer will typically be the deployer of a system where it acquires a ready-made AI solution for HR purposes. However, an organisation may modify a general-purpose AI system for its own purposes, in which case the employer may become a provider under the Act. The distinction between the roles of deployer and provider is important: providers are subject to significantly broader legal obligations, including continuous quality assurance, technical documentation, system certification and detailed regulatory reporting, compared with a deployer. Employers should therefore generally prefer ready-made applications designed for HR use and use them strictly in accordance with the provider’s instructions and intended purpose.
Higher risks and greater responsibilities
What types of AI use are considered high-risk in an HR context? Automated decision-making and profiling based on personal characteristics are always high-risk. Under the AI Act, high-risk systems include those that affect access to employment, employment terms, career progression or decisions concerning performance at work. Examples include AI systems used in recruitment, decisions concerning employment conditions and career development, or the termination of employment. The same category includes systems that allocate work tasks on the basis of a person’s behaviour, personality or other personal characteristics, as well as systems used to monitor and assess employee performance during employment. These are all situations in which AI directly affects individuals and their treatment in working life. They are precisely the kinds of sensitive situations in which risks must be identified.
The dividing line is not always entirely clear. Some of the uses described above may be considered low-risk if they do not cause significant harm or pose risks to employees’ health, safety or fundamental rights and do not materially influence decisions concerning them. For example, a system that screens job applications and recommends the most suitable candidates to a recruiter would clearly appear to be a high-risk application. By contrast, an AI tool that merely classifies and transfers applications between systems without influencing whether applicants progress in the recruitment process, or that identifies anomalies in decision-making without intervening in the decision itself, would fall into the minimal-risk category. Interactive AI tools, such as virtual assistants used in HR matters, fall into the limited-risk category. In such cases, the employer must inform users that they are interacting with AI.
When an employer introduces a high-risk AI system, the AI Act requires it to fulfil several obligations. First, it must ensure that the system is used appropriately and in accordance with its instructions and intended purpose. Second, the organisation must appoint a responsible person or team to oversee the system’s operation. Those responsible for oversight must have sufficient competence, training, authority and resources to perform the task. The employer must also pay particular attention to data governance and ensure that the data entered by the organisation is relevant to the intended purpose and sufficiently representative so that the system does not produce misleading results. In addition, the user organisation must respond to risks arising during use and report any errors or biased decision-making to the system provider and the competent authority where required, and cooperate with supervisory authorities where necessary.
Transparency is another key element of the Act: employees must be informed when an AI system is introduced, and where they are subject to AI-based decisions, they have the right to receive an explanation of a decision affecting them. Last but not least, the employer must retain the AI system’s automatically generated logs for at least six months where those logs are under its control. The logs may contain information on how the system reached particular outputs or decisions. Retaining and tracing this information is essential when investigating possible disputes at a later stage.
As noted above, existing legislation already requires employers to follow similar principles in many respects. Employees may, for example, be informed appropriately through cooperation procedures, while data protection legislation already requires personal data to be processed appropriately. The EU AI Act nevertheless adds new and concrete AI-specific obligations: when using high-risk AI systems, organisations must, among other things, retain logs and ensure continuous and adequate human oversight throughout the system’s lifecycle.
Users and data at the heart of an AI strategy
Although legislation provides the framework for responsible AI use, its ultimate success depends on people. A company may create an ambitious AI strategy, but if employees lack the ability, willingness or confidence to use the system, the expected benefits may not be realised. User trust is crucial, and in decisions affecting personnel it is critical. Research indicates that concerns about employees’ rights or the purpose for which a system is used directly affect whether employees accept AI as part of their everyday work. Trust is similarly weakened by concerns that employees’ ability to influence matters may be reduced and by doubts regarding the system’s actual capabilities.
Employers should therefore invest in introducing AI as openly and transparently as possible and in providing comprehensive information to personnel. Integrating AI into HR functions is always a process of change that requires traditional change management and learning. New technology may initially place a burden on both its users and those affected by its decisions, depending on the individual’s role and readiness. Management should therefore listen to employees, provide the necessary support and, above all, communicate clearly about the change. Subsequent disagreements and potential legal proceedings are also best prevented by investing in competence and AI literacy.
Usability is central to a successful AI investment. A phenomenon known as “shadow AI” has emerged: where employer-provided tools are perceived as difficult or inefficient, employees may begin to use external AI solutions instead of the organisation’s approved tools. This may cause the benefits of the investment to be lost while creating concrete data protection and cybersecurity risks as data is processed through uncontrolled channels. In addition to ensuring adequate AI literacy, organisations must therefore provide proper user training so that everyone knows how to use the new systems. Clear internal guidance is also needed on how external AI tools, such as general-purpose chatbots and other services, may be used at work. This helps protect personal data, trade secrets and other confidential information.
A central principle of the AI era is that an AI system is only as reliable as the data it uses. In addition to considering big data, organisations must pay close attention to their own HR data. If the data is incomplete or inaccurate, the AI system will inevitably draw incorrect or imprecise conclusions. At worst, an employer may unintentionally discriminate against an employee or job applicant where historical data contains structural bias. The EU AI Act therefore expressly requires the quality and reliability of data to be ensured in high-risk HR systems. In practice, this means that HR data must be collected, updated and cleaned continuously so that AI-based decisions are based on information that is as representative, accurate and relevant as possible. This is not an entirely new principle, as Finnish employers have for more than twenty years been required under the Act on the Protection of Privacy in Working Life to process only employee data that is necessary for the employment relationship.
Conclusion
The enormous potential of AI will undoubtedly be used more extensively to support HR functions in the coming years. Although its use is not free from legal or ethical challenges, AI can at its best make work more meaningful and HR and managerial processes more equal, personalised and efficient. However, AI must be introduced and used systematically so that organisations can realise its full potential while safeguarding employees’ rights. Ultimately, people remain at the heart of all of this: the users who turn strategy into reality in their daily work. Organisations that genuinely invest in their personnel’s technical and ethical competence, as well as in user-friendly tools, will be well positioned in the age of AI.
Kaisa Salo
Counsel
+35840 168 1418
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For many people, the summer holidays are already behind them and the autumn routine is in full swing. Calendars are filling up with meetings, projects are moving forward and emails are piling up. After a holiday, people often feel rested and energised for a while, but that feeling quickly fades if the structures and culture of the workplace leave no room for recovery. From an HR perspective, this is a familiar phenomenon: a holiday may restore energy, but if there is no room to breathe in everyday work, the outcome will inevitably be the same as before the holiday. This is precisely why workplace wellbeing still needs to be discussed frequently and extensively, so that practices proven to be effective become part of everyday work.
Previously, we have focused on the brains of knowledge workers and the impact of interruptions. Now it is time to take a broader view: why do we still treat basic necessities as luxuries, and how does this affect workplace wellbeing in practice?
Bare minimum or princess treatment?
During the summer, a discussion circulated on social media in which actions in relationships were assessed through the concepts of the bare minimum and princess treatment. The playful examples stayed with people because they forced us to consider why we sometimes regard basic actions as signs of exceptional care. One person thought that being picked up from home for a date was merely the minimum, while another saw it as a sign of particular thoughtfulness. Some regarded remembering a birthday as self-evident, while others saw it as a grand gesture. The phenomenon was playful, but at its core was an interesting question: why do we sometimes agree to treat the basic level as something excellent and exceptional?
When this idea is applied to working life, the situation looks familiar. Being able to take a holiday without checking emails is sometimes presented as a major benefit, even though it should be taken for granted. The same applies to everyday work in which employees do not constantly have to justify why they need a break or uninterrupted time to concentrate, a calendar that leaves room for focused work, or the opportunity to recover during the working day. If these are seen as signs of exceptional care, we have reached a point where basic necessities have become privileges.
From the perspective of workplace wellbeing, this is a significant problem. Recovery cannot depend solely on holiday periods or on the efforts of individual employees. It is part of the quality of work and an essential condition for people to remain motivated, committed and effective over the long term. When responsibility for recovery is placed on the individual, the organisation outsources responsibility for work-related strain to its employees and maintains a culture in which constant flexibility and overextension become the norm. HR must challenge the idea that ordinary practices should be treated as measures of excellence and make it clear that the standard for genuinely good working life should be much higher.
How language and culture shape workplace wellbeing
In many organisations, workplace wellbeing is included in the strategy and mentioned in the objectives, but everyday practices tell a different story. The language used to discuss work and the practices regarded as normal have a decisive impact on workplace culture. When the message consistently emphasises efficiency, performance and individual responsibility, employees internalise the idea that coping is their own problem.
Language plays a crucial role. The way we talk about work creates unspoken assumptions. If performance reviews focus only on objectives and results, employees receive the message that their value is measured through performance. If the same discussion includes a question about what helps the employee recover each week, the message is entirely different. Recovery is part of work, not a private matter. HR is responsible for reshaping these words and questions so that they begin to build a new culture.
It is important to understand that what is currently regarded as princess treatment in working life should become the basic standard in the future. A manager asking about recovery is not a special gesture, but a normal part of management. Leaving room in calendars for focused work is not extra care, but a condition for high-quality expert work. This change will not happen on its own. It requires consistent language and changes to workplace structures.
Workplace wellbeing is a condition for business success
Workplace wellbeing is often discussed as a soft value that is considered important, while its business impact remains vague. In reality, recovery has a direct connection to organisational success. It is already almost self-evident that people cannot maintain a high level of concentration without recovery. Even a short pause improves memory and problem-solving ability. Without breaks, the quality of decision-making declines, errors increase and creativity suffers. The working day may become longer, but the quality of the results deteriorates.
The annual cost of sickness absences in Finland is measured in billions of euros. Every additional day of absence has a cost, and when prolonged strain is involved, the costs multiply. Burnout is an increasingly common reason for long-term sickness absence, and it is most often caused by a structural problem: the work does not allow sufficient recovery. Employee turnover is also linked to this issue. Every employee who leaves because of exhaustion creates recruitment and onboarding costs that are many times higher than the cost of building practices that support recovery. Workplace wellbeing is therefore not an expense, but an investment that pays for itself through stronger commitment, fewer sickness absences and a more attractive employer brand.
Culture should be built consciously
The best time to take these matters into account is at the earliest stages of a company. When culture is built consciously from the beginning, workplace wellbeing becomes part of the organisation’s identity. Recovery is not left to the individual, but becomes naturally embedded in work structures and management. This is reflected in the employer brand, which attracts applicants and helps retain existing employees.
If the culture has not been built consciously, however, the situation is not beyond repair. It is never too late to make corrective changes. If an organisation notices that recovery is still regarded as an exception or even a luxury, it is time to pause and raise the standard. The language must change, practices must be renewed and management must lead by example. HR can drive the change forward, but it requires strong support and commitment from senior management. The reward is significant: a culture in which people want to stay and which new employees want to join.
Long-term work and points of friction are part of the process
It is nevertheless important to acknowledge that developing workplace wellbeing is not an easy task. It is not a single measure or a quick campaign, but long-term and often slow work. People are different, and what supports one person’s recovery may not work for another. Circumstances change, organisations evolve and conflicts will inevitably arise. Managing workplace wellbeing therefore requires continuous monitoring, measurement and discussion, and above all cooperation between management and HR to ensure that everyday practices genuinely change.
At the individual level, the issue often involves emotions, stress management and psychological resources. These can be supported through realistic job design, competence development and ensuring that managers have the tools to recognise excessive strain at an early stage. HR can provide the structures and tools, but everyday management determines whether they are implemented. At the community level, the focus is on psychological safety, managing difficult interactions and the ways in which the organisation supports the strengthening of positive resources. In practice, this means, for example, that feedback is provided regularly, problems are addressed without delay and successes are made visible. The role of HR and management is to ensure that these responsibilities do not remain with individual managers, but form part of the leadership culture of the entire organisation.
It is difficult to perfect all of these elements, and conflicts are certain to arise. It is precisely at those moments that the role of HR and management becomes most important: keeping the discussion open, supporting managers with practical tools and continuing the work with determination even when results are not immediately visible. A culture of workplace wellbeing is built according to the same logic as a business: systematically, measurably and strategically over the long term.
In conclusion
Workplace wellbeing is not a luxury, and it cannot remain at the bare minimum. The freedom to take a proper holiday, the opportunity to work within manageable boundaries and psychological safety in everyday work are not special benefits. They are the basic standard of working life. If these are still seen as princess treatment, it is worth pausing to ask why. HR must ensure that basic practices become the new normal and that workplace wellbeing is recognised as an essential part of the quality of work.
The bare minimum is not enough when the objective is to build a successful and committed workplace community. Sometimes it is easier to make changes with the help of an external perspective. Outsourced HR provides an opportunity to assess culture and practices objectively. When everyday structures are reviewed by someone who is not personally attached to them, it is easier to identify and address deviations.
If you want to ensure that workplace wellbeing in your organisation does not remain merely a topic of discussion but is reflected in concrete everyday actions, please get in touch.
Satu Edberg
+358 40 531 1542
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The Act on Co-operation within Undertakings will change from 1 July 2025. As a result of the amendments, the co-operation obligations of employer organisations with 20–49 employees will be restricted quite significantly compared with the current situation. The obligations of larger employers with at least 50 employees will also be eased, as the minimum negotiation periods will be reduced by half.
What does the change to the Act’s general scope of application mean?
From 1 July 2025, the Act on Co-operation within Undertakings will apply in full to companies, organisations and branches that regularly employ at least 50 employees. By contrast, the obligations of employers with 20–49 employees to conduct change negotiations and engage in dialogue will be considerably more limited. The provisions concerning employee representation and sanctions will continue to apply to all employers with at least 20 employees. The Act will continue not to apply in any respect to employer organisations with fewer than 20 employees.
What will change for employers with at least 50 employees?
A significant change is that the statutory minimum negotiation periods will be reduced by half. Accordingly, if an employer is planning workforce reduction measures affecting fewer than 10 employees or material changes to employment terms on financial and production-related grounds, the minimum negotiation period will be seven days from the beginning of July. If, for example, an employer is planning to lay off at least 10 employees indefinitely, the negotiation period will in future be three weeks. The shorter seven-day negotiation period will apply to temporary lay-offs lasting no more than 90 days. It will also remain possible for collective agreements to provide for negotiation periods that differ from those laid down by law.
It should be noted that the minimum requirements for change negotiations will not otherwise change. Employers must continue to address the grounds for the proposed measures, the intended plans, their effects, alternatives and measures supporting employment in the same way as under the current legislation. Although the shorter negotiation obligation may seem like a relief, careful advance planning will become even more important to ensure that all statutory requirements can be met within half the previous time. If an employer intends to conduct negotiations on an organisational change that would materially alter the employment terms of eight employees in different personnel groups, each with its own representative, the employer may be facing a very busy week if it wishes to complete the negotiations within the statutory minimum period.
What will change for employers with 20–49 employees?
A significant easing is that smaller employers will no longer automatically be required to initiate a change negotiation process in order to implement planned organisational changes or workforce reduction measures. First, temporary lay-offs lasting no more than 90 days will be completely excluded from the scope of change negotiations for smaller employers. The obligation to conduct change negotiations will nevertheless continue to apply where planned workforce reduction measures or material changes to employment terms on financial and production-related grounds affect at least 20 employees within a period of 90 calendar days.
The 90-day period referred to above may cause difficulties in some situations. For example, if indefinite lay-offs are initially considered for 16 employees, change negotiations do not need to be conducted before the measures are implemented. However, if the assessment later proves incorrect and a further five employees must be laid off within 90 days, the employer must initiate change negotiations concerning the new lay-off needs because the total number of affected employees exceeds 20. Companies with fewer than 50 employees will always apply the seven-day negotiation period.
Employers with 20–49 employees will also no longer be required to conduct change negotiations concerning so-called minor changes to the organisation or arrangement of work that fall within the employer’s managerial prerogative. However, the information and consultation obligations relating to transfers of undertakings, mergers and demergers must continue to be complied with in the same way as under the current legislation.
The obligation to engage in dialogue with personnel will remain. However, workplaces with 20–49 employees will in future have greater freedom to design their own workplace-specific dialogue practices, including the matters to be discussed and the timing of the dialogue. This is an excellent opportunity to build co-operation practices tailored to the needs of each workplace community. Despite this flexibility, the dialogue must still cover at least those matters required under other legislation, such as the principles governing the collection of personal data. Employers should seek to agree on the dialogue practices with personnel, but the employer will ultimately decide how the process is arranged. The practices must be documented and communicated to personnel, for example on the workplace intranet.
What does the new period reserved for assessing employment services mean?
The new provision may affect the timing of employment termination measures following change negotiations and should be taken into account carefully, as a breach may also result in an obligation for the employer to pay compensation.
If the employer has issued a negotiation proposal indicating that at least 10 employees may be dismissed, the employment of a dismissed employee may not end before 30 days have passed since the negotiation proposal was submitted to the employment authority. The purpose of the provision is to ensure that the employment authority has sufficient time to identify, together with the employer, employment services that support re-employment before the employment contract ends. The notice period and the 30-day period may run concurrently, and the period will be calculated in calendar days from the submission of the negotiation proposal. In practice, a short negotiation period combined with a short notice period could result in the employment relationship ending before the 30-day period has elapsed. This must therefore be taken into account when scheduling termination measures. For smaller employers, the obligation will arise only in relatively limited circumstances, as they will generally be required to issue a negotiation proposal only where workforce reduction measures affect at least 20 employees.
Conclusion
Despite the increased flexibility, the legislative amendments will introduce a considerable number of new issues and questions of interpretation that employers must take into account. Timely and careful planning of the processes will become even more important, even though the negotiation periods will be significantly shorter. The new thresholds will require particular vigilance from employers with 20–49 employees when assessing the effects of planned measures on personnel.
Please contact us if you are planning personnel changes and the amendments to the Act on Co-operation within Undertakings are making your head spin. We are happy to help.
Kaisa Salo
Counsel
040 168 1418
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