Select Committee on Education and Employment Appendices to the Minutes of Evidence


APPENDIX 10

Memorandum from Keith Faulkner, Director of Public Affairs, Manpower plc

AN EXAMINATION OF WAYS IN WHICH THE GOVERNMENT CAN ASSIST AND ENCOURAGE EMPLOYERS TO FILL THEIR VACANCIES BY RECRUITING UNEMPLOYED PEOPLE


SUMMARY OF SUBMISSION

  In our introduction we set out our ethos, our commitment to an effective UK labour market and highlight the methods Manpower use to upskill employees and improve employability, with specific reference to our involvement in existing government programmes aimed at getting the unemployed back into the job market.

  We go on in subsequent sections to express our strong belief that there is a very significant role for private sector employment businesses to work in partnership with the public sector, especially with Employment Service, to develop synergy in working with job-seekers and employers alike.

  We draw attention to our existing role as an intermediary and how our past and current involvement can be used as a yardstick from which to measure and upon which to build upon.

  We highlight the success of the partnership between the Employment Service and Manpower with specific examples such as the New Deal in South Wales.

  We then develop Manpower's thinking on working with other intermediaries, together with employers, to generate specific customised training with guaranteed job outcomes into entry level positions and with opportunities for subsequent career advancement and additional training.

  Manpower welcomes the opportunity to contribute to this evidence and articulate its views and enthusiasm at being involved in partnerships that enhance access to work opportunities for the unemployed.

INTRODUCTION

  Manpower was founded in 1947 in the USA's mid-west, at a time when discrimination in employment was common place. From the outset Manpower declared an objective to provide equal opportunities for all people in their workforce regardless of colour, race or gender. These aims are still paramount today and help to explain Manpower's support and involvement in numerous Government and voluntary sector initiatives aimed at getting people back to work and developing skills, including programmes such as the New Deal and Employment Zones.

  Manpower is committed to maintaining and improving labour market effectiveness in the UK, realising peoples ability to contribute to the full through equality of opportunity and the fundamental right of those who wish to work to support themselves and their families through having access to suitable employment opportunities. A healthy UK labour market is an essential contributor to wider economic and social wellbeing. As a leading proponent of public/private partnership Manpower is well-equipped to develop this policy in the field of employment. Our aim is to work together with others to engage the latent skills and motivation of many of the people who are experiencing barriers to employment.

  Each year we find work for over 100,000 temporary and contract employees and it is essential to our success that our employees are well-equipped and we work constantly to develop the ethos of flexible working and lifelong learning. Consequently Manpower has a strong and growing training capacity and places a great deal of emphasis on the upskilling of our own employees. The most recent development has been the UK launch of our Global Learning Centre offering more than 1,500 training opportunities online, in IT and additional soft skills.

  In our view, the management of the labour market is a long-term strategy to be delivered by public and private sector working together, not by one replacing the other. Manpower strongly opposes the privatisation of the Employment Service as highlighted by our written evidence to the Select Committee in May 1998 and by Keith Faulkner's oral evidence submitted in July 1998. Manpower is a strong advocate of public/private partnerships bringing together the wealth of experience existing in both sectors to deliver the optimum service to unemployed people. We have sought to demonstrate the effectiveness of this approach through our participation in New Deal and Employment Zones.

What can the Government do to encourage employers to recruit unemployed people?

Would such measures help to reduce unemployment or simply lead to the displacement of other people who would have got the jobs anyway?

Even if this is the case, is it a good thing anyway because of its beneficial "churning" of the labour market?

What are employers doing to reach out to prospective employees who may have been unemployed for some time?

Is there anything more that the Employment Service could do to promote the recruitment of unemployed people?

Recent references by both Gordon Brown and David Blunkett evidence the contrast between high (though decreasing) numbers of unemployed and similar numbers of unfilled vacancies and skills shortages. There is a significant skills and geographic mismatch of unemployed to employment, especially in areas suffering acute unemployment due to declining heavy industry and where the substitute growth sector is largely one of a service nature. In order to overcome this, there must be positive programmes to encourage employers to recruit the available workforce—to embrace the currently inactive and develop their existing skills into an economically active and productive workforce. There is not only a need to develop the skills of the unemployed but also a requirement on the part of the employer to be flexible in terms of restructuring job content and the selection criteria applied.

  The UK remains in a strong economic position overall with the advantage of a very flexible labour market to support our businesses competitive position in European and Global markets. To maintain this we need to ensure that we have adequate access to a suitably skilled and motivated workforce. Given this, we can continue to expand the number of jobs, reducing welfare dependency and consequently diverting public spending into more positive areas and enlarging our home market for goods and services. We do not therefore believe that motivating and creating opportunities for the unemployed to gain real skills and enter the job chain will displace people already in work.

  We also challenge the concept of "churn" as an outcome neutral feature of the labour market. Entry level jobs are an essential first step, especially for the long term unemployed. What the relevant employers need to do, with the support of intermediaries as appropriate, is not regard attrition as an unavoidable cost feature. We need to provide post placement support to enable entry level jobholders to progress to higher level positions or secure better jobs in other companies based on the skills and confidence gained and thus release new entry opportunities without themselves "returning to Go". This is not just about training but also the quality of general in work support and some rethinking of job design within the business.

  Employers do need encouragement to change recruitment patterns to provide more scope for long term unemployed candidates. However, those public sector organisations, voluntary agencies and private companies supporting the unemployed cannot demand co-operation as of right. They have to understand employer needs, identify solutions and "sell" those solutions back to the employer. They also have to deliver an "after sales service" that does not end with the placement of an unemployed person. In Manpower we believe that our general commercial experience equips us to deliver this quality of service as demonstrated by the examples that follow.

  Manpower strongly advocates the development of partnerships between the public and private sector to offer an optimum service to both the unemployed and the employer. This has worked well in the case of the New Deal where Manpower acts as the Private Sector Lead managing the Bridgend and Glamorgan district in partnership with the Employment Service. Similarly we have further evidence of this working in a broader context with the setting up of Working Links, a joint venture between the Employment Service, Manpower and Ernst & Young to run the contracts to deliver Employment Zones across Great Britain.

MANPOWER AND THE NEW DEAL

  With the launch of the New Deal post election, Manpower immediately declared its support for this important initiative to help the long term unemployed. We have since demonstrated our commitment to this in a number of very practical ways, including our role as private sector lead in Bridgend and the Glamorgan Valleys which is described in more detail in a later section.

  One of the major lessons learned, which has been at the heart of our own business over the last 50 years of operating experience here in the UK and in the USA, is that solutions only deliver sustainable jobs if they are strongly demand-led. It starts with a proper appraisal of a company's staffing strategy and the characteristics that are shown by successful employees—from this we need to develop appropriate assessment and training for applicants to ensure the candidates we send are "right first time". As one of the world's largest employers outside Government Manpower provide employment services for tens of thousands of employers. We have a unique perspective on employees, what they seek from work, what motivates them and what makes them leave a job. The key is then the "match" of person to job which in today's fast changing world of work is no longer a simple comparison of past experience with future work requirements in two similar job roles.

  In applying this to the long-term unemployed, the rules do not change but the need to have real jobs to work towards, to have assessment and training programmes that deliver genuinely work ready applicants and to have planned "in work" training and support is heightened. Short, focused training is one approach developed through our involvement in Employment Zones and being further enhanced in a number of New Deal pilots across the country aimed at sector-specific markets, such as information technology and call centres (see New Deal IT Initiative in the following section).

MANPOWER, WORKING LINKS AND EMPLOYMENT ZONES

  Our involvement in this joint venture exemplifies the powerful combination of public sector experience with techniques honed in the competitive environment of the private sector.

  Working Links has gained contracts for nine of the 15 Employment Zones (one is a joint bid with the Nottingham Partnership) that are being piloted across Great Britain. This initiative allows employers, local and national, the opportunity to work directly and flexibly alongside local groups to develop tailor-made solutions for individuals based on enhancing existing provision and by plugging any gaps.

  This public/private partnership has come together to provide a strong, output focused organisation that can meet the challenge (and risks) as set out in the Government's invitation to tender. The core of the initial service delivery will be through some externally recruited advisers working together with seconded Personal Advisers from the Employment Service who will maintain active links to the remainder of the Jobcentre network of systems and vacancies. Manpower will bring additional resources and skills for diagnosing client strengths and weaknesses in securing employment, as well as providing access to a wider range of employers. Ernst & Young's main input will be in the analysis and enhancement of performance as well as financial management. The three organisations will be working together in a collaborative partnership where the whole is greater than the sum of the parts.

  Working Links is a commercial venture albeit coupled with a strong public service ethos. Payment will be mostly by results with the largest amount only payable when a client has been in employment for at least 13 weeks. This is not an easy opportunity to make money and a return on the initial investment, including the direct and indirect costs of getting clients into work, will only materialise if more clients (than at present) are successfully placed into sustainable employment.

  Although the core combination of strengths that this partnership can provide is significant, the delivery model (ie breadth and level of provision) for each Zone will be a further collaboration involving a number of local (strategic and delivery) organisations to address the problems in getting their long term unemployed clients into work. This will produce a second tier partnership working from the public/private alliance at a national level, to local organisations who may be from the public sector, voluntary sector, or private sector. It will also include service providers and employers. There are many local organisations who have a locus which overlaps with the interests of the clients that this initiative is aiming to serve and it is our objective to achieve as much synergy as possible with these. To encourage this we have set up local management boards for each of the Zones which will have representatives of these local organisations alongside the national partnership. This will ensure a genuinely local flavour to the Zone operations which will influence the strategic direction and have an on-going input to re-engineering the operational delivery.

  Working Links will not operate with the objective of maximising profits but will seek to maximise the numbers placed into work. Although the achievement of this aim will trigger further payments this is not the same as profit maximisation as there will be significant costs in helping many of the clients to achieve this goal.

  By allowing employers to be at the decision-making, implementation and delivery stages of employment policy, as is the case with initiatives like Employment Zones, there will be a more focused development of what employers want, taking carefully into account what there is on offer in terms of latent skills and dormant motivation. Through involvement in the development of the job-readiness of the candidate, whether via hands-on training, customer care or motivation skills, the employer realises the need for training, upskilling and aftercare throughout employment, as already practised by Manpower in our mainstream business. Awareness of the ongoing process allows advancement of the employee's career as well as positive attrition, suitable vacancy filling, falling unemployment levels, a motivated workforce and subsequent sustainability.

The Government proposes to create a new Intermediaries Fund (£5 million over three years) covering 11 inner city areas. The money will be used to promote private and voluntary sector organisations which seek to link unemployed people to employers with vacancies on offer. The Fund will also be used to explore the use of sector-based intermediaries in supporting employers to take advantage of New Deal. What kind of projects should the Fund be used to support? Are there existing examples of good practice in this area?

  In responding to this it may be most useful to furnish some practical examples that draw out what we see to be some of the key features of success.

NEW DEAL IT INITIATIVE

  Acting as an intermediary, Manpower, in collaboration with leading information technology employers including Unisys, IBM, Xerox and Cisco, is developing pilot, sector-based programmes to train New Deal participants for entry-level positions as IT engineers and service technicians. The positions, paying from £16K to £21K per year, will provide continuing training and career opportunities. Manpower will work with corporate and community partners to develop four pilot projects in 2000, in London, Merseyside and Glasgow, with further expansion in subsequent years.

  Strong relationships with major clients have assisted us in recognising a clear labour market need. Information technology is one of the fastest growing employment sectors in today's economy, offering great opportunities for entry level workers equipped with the appropriate skills. In the UK, Manpower expects to fill as many as 4,000 positions in IT service and support in 2000—there are definite vacancies on offer.

  Although there is a clear economic need for skilled workers to fill these positions much of the potential workforce—including New Deal participants and other low income individuals—have lacked the preparation, skills, connections and support to take advantage of these career opportunities.

  To meet this obvious workforce need, and to promote new opportunities for New Deal participants, Manpower is creating pathways to high wage information technology service and support jobs by forming partnerships with the Employment Service and community training providers to develop training for an estimated 100 IT placements. Extensive discussions have been held across Great Britain and relationships are being developed. In London alone, there are clear examples of local providers such as the charity pecan offering quality IT training with high pass-rate turnout yet falling short on job outcomes due to a lack of employer links. Manpower has the contacts and has done the research in order to be able to place people in suitable sustainable employment with additional opportunities for advancement. The services necessary to ready new Deal participants for placements as IT service technicians will be provided by Manpower and partners, by delivering short-term training programmes to enable participants to meet prevailing industry hiring standards.

  Training will target field engineering positions focused on installation, maintenance and support of computer and office equipment. Manpower corporate partners including Unisys, IBM and Xerox have pledged to provide over 100 jobs for New Deal participants meeting industry standards in the first year of pilot operation. Working in co-operation with other partners, Cisco will offer upgrade training in networking skills. Finance will come initially from Innovation Funding then from New Deal under the FTET option, though if the pilots are successful the initiative will fit under the new Intermediaries Funding. Manpower will act as the link between the unemployed, private and voluntary organisations putting them in touch with employers with unfilled vacancies, as in the case of organisations such as Pecan, Elatt and Newtec and employers such as IBM, Xerox and Unysis.

  For partner companies, the Manpower initiative offers a pool of skilled workers who will meet the same standards as any other Manpower placement. Companies will also have the opportunity to custom design training programs and access free upgrade training for their existing workforce, allowing employed and unemployed to train alongside each other. Participants will be offered three training options based on skills and interests as determined by assessment and the IT pathway will be designed to serve a variety of skills levels and interests.

  Participants successfully completing training will take the A+ certification test. Those receiving certification and meeting company set standards will be placed in entry level positions with participating companies. New Deal participants placed in field engineering positions will have the opportunity for Cisco upgrade training offered by community training providers. Partner companies can access this training through a day release programme, leading to a CCNA certificate.

  Manpower's responsibility is to design, develop and operate training in collaboration with community and corporate partners. Manpower will be responsible for overall management, assessment, placement and quality control. Training partners will recruit participants and provide basic and advanced skills training and social support. Corporate partners will set hiring standards, agree to hire qualified graduates and participate in programme design and operation.

  This programme is genuinely demand-led with much input from the IT sector. Its innovation and strength is its employer-driven content and its guaranteed job outcomes at the end of a short, customised training period. This is a conscious move away from training for training's sake and offers specific, demand-led, on-the-job training together with the opportunity to develop wider essential skills such as customer care and job preparation specifically tailored to meet the needs of this industry. With impressive starting salaries for entry-level roles and broad opportunities for progression within the companies this is a clear move into sustainability, increased employability. By acting as a catalyst in the establishment of intermediary services, Manpower can utilise funding available to promote the development of relationships between public, voluntary and private sector organisations that bridge the gaps between unemployed people, with the capacity to learn suitable skills, and employers faced with skills shortages and staff turnover.

MANPOWER AND THE NEW DEAL

  There are a number of examples of current good practice associated with the New Deal. One of the more established is the work Manpower has done in South Wales under the New Deal alongside the Employment Service as briefly described in an earlier section.

  At the launch of New Deal in May 1997, Manpower publicly endorsed the principles of the programme and offered the benefit of our experience to support the design and implementation of the programme.

  The consequent collaboration with the Employment Service led Manpower to bid for, and win, a contract to deliver the New Deal for both 18 to 24 year olds and, separately 25+ long term unemployed in the Bridged and Glamorgan Valleys district of South Wales. Of the 12 UK districts tendered Manpower is the only private sector company delivering our solution in true partnership with the Employment Service (ES). By working through ES Job Centres and Personal Advisers, operating within ES policy frameworks and acting as part of a joint management team, Manpower is developing delivery techniques that are readily transferable to other ES led districts. Government performance statistics show Manpower to be performing strongly in comparison with other private sector led districts.

  Manpower is also acting as an intermediary employer for several leading UK organisations. We employ New Deal applicants and assign them, under the terms of the New Deal, to gain work experience in our client companies. This allows our clients to support New Deal without all the related administration, payroll and personnel activity.

  We are already familiar with their entry level and skill requirements and can therefore provide an effective link with the Employment Service to ensure the suitability and necessary pre-training of New Deal applicants. Applicants are then assigned to the agreed six-month period of work experience in the client company, with Manpower accepting the employment and payroll responsibilities. This arrangement helps ensure consistency in our client's handling of New Deal with the minimum of resource requirement from the client's own organisation. This intermediary role does not preclude direct links between our client and the Employment Service and allows the client's support for New Deal to be promoted in just the same way as if it were a direct arrangement. At the end of the training period we will either transfer the employee to our client or support them in finding an alternative position.

MANPOWER NATIONAL SKILLS FESTIVAL

  The emphasis on training and skills underlines the need to make people more aware of how important skills are to their prospects for work and to demonstrate that training need not be costly or difficult to access. Manpower, as part of our Millennium sponsorship of the Dome, incorporated support for the Skills Festival to help achieve that goal.

  Manpower National Skills Festival 2000 is an initiative developed in partnership with UK Skills and The Prince's Trust. It is part of the Millennium Experience's national programme and aims to help young people to succeed by promoting excellence in practical skills, so generating high quality jobs for the future.

  The Festival is designed to inspire young people by giving them the opportunity to either demonstrate their skills in public themselves or see their peers compete against the best in their region.

  There will be a nationwide series of skills-related events and activities, culminating in July 2000, when the NEC near Birmingham will host the biggest ever celebration of skills in the UK.

  The partnership is keen for all businesses to take part, to help change the way the industry, commerce and the public perceive vocational skills.

  New skills such as call handling and computer-aided design, which are being included in the contest for the first time, are explored in a series of tasks to be completed over four days.

  We have worked with businesses to encourage an "Open Doors Week" to take place allowing people the opportunity to experience a variety of workplaces and "have a go". Manpower, The Prince's Trust and the Regional Development Agencies have had a great deal of success in encouraging young people to enter and demonstrate their skills to others.

What can private employment agencies contribute to the recruitment of unemployed people?

  Manpower are very clear on our main objectives. The first is to support greater flexibility in the labour market but to couple that with responsibility. All our staff have full employment contracts and that reflects our philosophy of delivering quality alongside flexibility by having a long-term relationship with our temporary workforce and giving them the normal benefits of employment. As a result we are working with employers to create a greater mobility of labour between different job roles, between areas and between skills, which is why we place a great deal of emphasis on training. We also have considerable experience of providing a route back into the job market, for people made redundant, moving out of caring responsibilities, or those who, for other reasons, are out of touch with the labour market, placing them into work, training them and rebuilding their confidence and ability within the labour market. As the employer we create security for both the client (whose position we can fill) and the job-seeker who develops a long-term relationship with Manpower and enjoys all the benefits of employment.

  Manpower have also worked alongside the Prince's Trust Volunteers programme in offering job preparation and labour market training as part of their 12 week programme via our local branches. Working with Volunteers, some of whom are New Dealers, has led to increasing employability and subsequent vacancies filled through our relationships with these groups. This mirrors work done with several other voluntary groups working on issues of, for example, age and disability.

  Employment agencies acting in their normal business format will only generally offer a good route to work for those unemployed with some existing work experience and reasonable motivation. For the majority of long term unemployed, agencies can best deliver solutions as partners with other public sector, voluntary or employer groups where their experience can represent a very positive contribution. We hope that the evidence we have presented of Manpower's involvement illustrates this effectively.

CONCLUSION

  Manpower regards a strong employment base as a key driver of economic and social success, regionally and nationally, with skills and motivation being the currency people need to succeed in employment. For those who have barriers to entering employment intermediaries such as Manpower have a vital role to play, however the end employer has to remain the focus and their involvement from the outset is essential. However for many employers they have other priorities that again make an intermediary, who makes their commitment in principle to help, easier to actually deliver in practice. Many traditional intermediaries are focused on the unemployed and have insufficient understanding of the employer perspective.

  Manpower welcome the opportunity to act as a catalyst bringing together all the necessary components of success in exciting projects such as Employment Zones and New Deal. Despite the criticism of the Welfare to Work philosophy in some quarters—that an undue attention to putting people into work is working against the best interests of the individual—we see no conflict between being demand-led and client-focused (ie the unemployed). It is the economic enabler for both companies and individuals to continue the investment in personal learning and, for those who want to, make progress into more fulfilling jobs.

Manpower plc

March 2000


 
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