Memorandum from Manpower Plc
In the introduction we set out our leading role
in the field of employment services and the contribution we make
to achieving improved employability for our workforce and greater
flexibility for our clients. Effective labour market policies
are essential for the economic and social welfare of the UK, and
are central to our own interests and those of our customers and
In subsequent sections we express our support
for the principles of the New Deal, providing examples of our
involvement in welfare to work initiatives. Our experience in
delivering New Deal, together with ONE and Employment Zones, has
provided us with some insight into the strengths and weaknesses
of the programme. We place great emphasis on the need to match
clients with appropriate placements for sustainability of employment.
We highlight the success of the partnership
approach between the Employment Service and Manpower in both New
Deal and the Employment Zones. We comment on the negative impact
of too much emphasis on cost per capita and the need to present
employers with a more convincing case for working with New Deal.
Towards the end of this report we offer examples
of how we see New Deal developing along the demand-led, employer-focused
route, and emphasise the responsibility that lies with the LSCs
and other agencies to contribute to its further development.
Manpower welcomes the opportunity to set out
our views with enthusiasm at being involved in partnerships that
enhance access to work opportunities for the unemployed.
1.1 Manpower, the UK's leading employment
services company, is part of the international Manpower group
operating in 54 countries and the market leader worldwide. In
the UK, we employ more than 100,000 people yearly to meet client
requirements for temporary, permanent, contract or managed services.
Our success is based on our longstanding commitment to the benefits
of flexible working for both businesses and individual employees.
This dual relationship with customers and workforce is reflected
in equally strong links with employer organisations like the CBI
and employee bodies in the form of the trade unions.
1.2 Manpower is committed to maintaining
and improving labour market effectiveness. An efficient labour
marketgiving all individuals access to regular paid work
and employers access to a skilled, flexible workforcegenerates
significant economic and social advantages.
1.3 As a successful global corporation,
we recognise our responsibility to provide leadership in issues
relevant to our core expertiseemployment. Our involvement
in a number of Government welfare to work initiatives is evidence
of this. We have contributed directly to the delivery of the New
Deal, ONE and Employment Zones because we believe it is essential
to develop effective means to tackle unemployment by reducing
barriers to accessing paid work, as well as recognising the urgency
of addressing issues around growing labour market shortages.
1.4 Manpower was awarded the contract to
deliver the Private Sector Led New Deal for 18-24 year olds in
Bridgend and the Glamorgan Valleys and subsequently for New Deal
25+. We are also associated with nine of the 15 Employment Zones
across the UK through our joint venture company Working Links
(a new and innovative partnership between Manpower, the Employment
Service and Cap Gemini Ernst & Young). Although the New Deal
25+ and EZs differ in terms of client group, there are considerable
similarities and common lessons to be learned from both these
programmes. For example, many of the clients participating in
the EZs are in their mid to late 20s sharing similar barriers
to the 18-24 year old New Deal participants. Equally, a number
of our major customers are involved in the New Deal or have major
locations within Employment Zones, giving us an even wider perspective
on successful methods of delivery and marketing.
2. How successful has the New Deal for Young
People been in moving clients into sustainable employment?
2.1 There are plenty of examples of young
New Deal participants whose lives have opened up as a result of
the programme and these are often used to provide anecdotal evidence
of the programme's success. Conversely, figures quoted on the
average per capita cost have been used by New Deal sceptics to
paint an unfavourable picture. Neither of these are really appropriate
measures of the success of the New Deal.
2.2 The purpose of the New Deal is to address
the social and economic consequences of unemployment. This requires
new ways of connecting with and supporting long term unemployed
people and those facing barriers to employment. It also requires
a change in employer attitudes. A growing awareness amongst employers
of the need to be more innovative in addressing labour shortages
and an improved understanding of the potential of many New Deal
applicants has created a greater potential for future success
and a more positive dynamic in the UK labour market.
2.3 While hard to quantify and subject to
many other influences, it is this shift in attitude that is important
in judging the success of the New Deal. However the shift needs
to continue. Placements into entry level jobs require better training
support to avoid "churn" as disaffected staff return
to unemployment rather than progressing into more rewarding jobs.
Greater penetration into the SME sector, where the perceived "red
tape" of the New Deal puts many off, is also vital as many
new jobs are created in this sector of the economy.
2.4 From our close relationship with the
labour market Manpower judges the New Deal to have been successful
and that it deserves continuing support. However, as we set out
below, there are many lessons to be learned from the first years
of the programme that must now be applied with vigour.
3. What have been the key factors influencing
its successes and failures?
3.1 In the early days of New Deal the challenge
of retention and sustainability of jobs was great and has
not yet been wholly resolved. Levels and quality of training and
development provided by some employers provide an inadequate foundation
for career progression. However, as the ES and their private sector
partners and contracted providers encourage more employers to
support entry-level jobs in ways that better match the needs of
New Deal clients, increasing numbers remain in employment, progressing
within the organisation or successfully applying for other jobs.
3.2 The relationships between New
Deal personal advisers and clients have been paramount in the
success of the programme. This success stems not so much from
the training and work experience programmes provided but from
the fact that successful districts are characterised by their
PAs having the continuity, flexibility and time to motivate and
instil confidence in clients. This is even more evident in the
Working Links Employment Zones where advisers tailor pathways
to work to the specific needs of individual clients and encourage
them to be accountable for planning and costing out their own
route to employment.
3.3 Increased flexibility for the
Employment Service in securing and funding support programmes
would move many people more rapidly into work. In South Wales,
the ability of our PAs to authorise payment for car insurance
to allow someone to go out to work or to actually take a client
out to buy a new interview suit and then accompany them to the
interview are typical examples of this policy in action.
3.4 Within the training, environmental and
voluntary sector options the trend is for greater attention to
be given to providers identifying jobs in the market, that
is responding to labour market demand in the option design rather
than trying to find jobs to suit the clients at the end of the
process. Merely occupying people's time is clearly not the answer,
what is needed is a proactive programme of increasing employability
in relation to market demand.
3.5 Post-placement support is an
element of the programme which is associated with the success
of New Dealliked by both the employer and client. However,
we have yet to find conclusive evidence that the provision of
post-placement support significantly improves retention rates.
Indeed in some cases there is evidence that this support is scarcely
utilised. East London Advanced Technology Training, a partner
organisation in a proposed New Deal IT programme, Manpower intends
to launch early 2001 (detailed later in this document), have been
offering a helpline service for some time to clients and employers
once trainees graduate from their courses. This provision is rarely
taken up in practice. In the US where Manpower Inc is involved
in welfare to work programmes, a similar pattern has emerged.
Once into work, where work is stimulating, offers training and
options for progression, there is little evidence of the need
for aftercare other than that any new employee requires.
3.6 We are still suffering the effects of
the early marketing of New Deal. Employers were told about the
18-24 New Deal months before any outcomes were possible and so
the initiative lost momentum by the time young people emerged.
It also took time for many ES staff to adapt to the need to match
applicants more carefully, rather than just submitting anyone
who was a possible fit and leaving the weight of selection on
the employer. Poorly selected candidates and interview "no
shows" did further damage to New Deal's credibility. Our
experience confirms that it is worth making fewer placements but
of better qualityin terms of client and joband investing
adequate time up front in understanding what the employer wants.
In summary, to achieve sustainable job outcomes this match is
more effective than post placement support.
3.7 As a result there is a need to rekindle
interest and re-market the New Deal programme. Particularly pertinent
is the SME sector responsible for the majority of job creation
and often the most adaptable employers in terms of meeting the
needs of a specific applicant. To engage these employers on a
greater scale, increased flexibility is essential, especially
for the smaller employers who often would benefit most from employing
a New Deal client. Currently the necessity for training to be
of a formal nature before subsidies can be received by employers,
is a deterrent. Employability, in terms of soft skills and relevant
workplace experience, is the basic criteria used by all employers.
It would be of greater use to measure how added employability
will be achieved, rather than be forced down the route of often
artificial compliance with fixed training guidelines.
3.8 Positive action is needed to engage
with SMEs as they can be a challenging group to target. One mechanism
for this may be via the LSCs. The Skills Taskforce, in their final
report "Skills For All," proposed the idea of Local
Learning Partnerships to overcome just this problem in the training
arena. This could readily be extended to encompass the Partnerships'
members' involvement with New Deal, avoiding the need for yet
another local forum or work group!
3.9 The diversity of New Deals available
(18-24, 25+, 50+, lone parents, disabled) creates confusion and
irritation for employers, particularly with reference to the varying
regulations and methodologies to be applied and the different
advisers within ES seeking placements for their particular clients.
All of these client groups have special support requirements but
these differences should be invisible to employers. An employer
wants one New Deal contact offering a unified package that
meets requirements and puts forward suitable candidates. The ability
to support the individual depends on successfully supporting employers.
3.10 The evolving role of the Large Organisation
Unit is beginning to demonstrate signs of success. The realisation
of the differences between getting a Board member signed up to
support New Deal and realising the corresponding support of the
floor manager has led to them working with employers in alternative
ways. Their marketing effort must penetrate the whole organisation,
recognising the different motivations in different parts of the
business structure, in order for it to succeed.
4. How effective and comprehensive has the
Government's programme for evaluating the New Deal been?
4.1 Evaluating New Deal by analysing per
capita costs is straightforward, easy to understand accountingbut
bad marketing. As we discussed in Section 2 above, it obscures
the wider purpose of New Deal. An examination of overall achievements
as well as value for money is imperative. Apart from the direct,
more visible savings on welfare payments, there are many other
social and economic benefits that come with it; eg reduction in
crime rates, increased spending power, more demand for services
as a result, job creation to deliver those services and so on.
It is the extent of this overall market impact that is the real
measure of New Deal.
4.2 Manpower has recently had access to
the York Consulting evaluation of the Private Sector Led New Deal
contracts (PSLs) which reported on some of the successes and failures
of the programme. It recognised the "bedding in" period
necessary for PSLs generally before they could reasonably be compared
with ES led districts.
4.3 We believe that our partnership with
ES in the Glamorgan Valleys has demonstrated, as we intended,
that performance could be raised within ES operating structures
and through ES personnel by working with a private sector partner.
This allows successful methodologies to be realistically replicated
across the wider ES network. Unfortunately, the York Consulting
report criticised this approach on the grounds that, because it
was not true "privatisation", it did not provide a sustainable
national model or contain sufficient innovation. Yet within a
few paragraphs of these conclusions it recognises our achievement
of above average results as well as confirming the support of
the ES Regional Office for our work in the Glamorgan Valleys.
It is hoped that this does not reflect a general view that "different
is best" rather than an objective review of outcomes when
evaluating approaches to New Deal delivery.
5. What changes are planned for the design
and delivery of the New Deal and what benefits, if any, are they
likely to bring?
5.1 From our perspective there needs to
be a sector led strategy with emphasis on a demand-led approach.
In addition, the new LSCs should be able to make a significant
contribution but will need to work very closely with ES to achieve
synergy rather than duplication of effort. We need to encourage
small niche providers to operate collaboratively, rather than
in competition, to create consistency and economies of scale and
to ensure the adoption of an employer led approach.
5.2 A good example of this overall approach,
building on the theme of partnership, is Manpower's collaboration
with leading information technology employers including Unisys,
IBM, Xerox and Cisco. We are developing pilot sector-based programmes
to train New Deal participants for entry-level positions as IT
engineers and service technicians. Corporate and community partners
will provide training and career opportunities resulting in CCNA
qualifications. The three pilot projects will launch in 2001,
in London, Merseyside and Glasgow, with further expansion in subsequent
5.3 Information technology is one of the
fastest growing employment sectors in today's economy. Although
there is a clear economic need for skilled workers to fill positions,
many of the potential workforceincluding New Deal participants
and other low income individualshave lacked the preparation,
skills, connections and support to take advantage of these career
opportunities. The A+ qualification required by employers has
had no funding mechanism attached and so has not been an option
for local providers to deliver.
5.4 This programme is genuinely demand-led
with considerable input from our IT sector partners. Its strength
is the employer-driven content and its guaranteed job outcomes
at the end of a relatively short, customised training period (20-26
weeks). This is a conscious move away from training for training's
sake. It offers specific, demand-led, on-the-job training together
with the opportunity to develop wider essential skills such as
customer care and job preparation, all specifically tailored to
meet the needs of this industry. With impressive starting salaries
for entry-level roles, £15-21k, and broad opportunities for
progression within the companies, this is a clear move into sustainable
Based on the views that we have set out earlier,
we believe that there are six priorities for the New Deal programme.
6.1 Work on the basics: There sometimes
seems to be too much emphasis on innovation, as if doing completely
new things in radically different ways would inevitably produce
improved performance. Our experience suggests that it is doing
the basics better, changing the emphasis in established ways of
working and giving a little more freedom or flexibility that is
the most reliable way of achieving significant performance improvements.
6.2 Greater flexibility: There are
a number of rigidities in New Deal that are a barrier to improved
performance. These include the ability to commit to expenditure
on clients at the adviser level, the ability to accept non-accredited
workplace learning and the ability to buy relevant provision for
clients outside of established supply contracts. One of the sources
of success in private led initiatives is the freedom from these
types of constraint that are part of an "old style"
command and control structure.
6.3 Unified approach: The plethora
of New Deal programmes, each with its own rules and employer benefits,
gets in the way of gaining employer commitment to the overall
concept and prevents a concerted and consistent marketing approach.
The differentials, to the extent that they are necessary at all,
should be restricted to the internal processes of ES and the arrangements
with the client themselves.
6.4 Employer led: There can be undue
emphasis on meeting client needs. Sustainable jobs with worthwhile
access to continuing development of skills depends on understanding
and responding to employer needs. This means more investment in
building employer relationships, more stringent requirements of
training and voluntary sector providers to strengthen their own
employer links and more attention to proper assessment of individual
clients against specific job opportunities.
6.5 Improved co-ordination of resources:
There is even greater variety of employment related initiatives
in the market place than there are New Deal programmes. There
are government initiatives like the New Deal for Communities or
ONE, there are local partnerships tackling employer and community
concerns, there will be the RDAs and LSCs coming into operation
and national bodies like the CBI and Chamber of Commerce set up
working groups and conferences. There is duplication, failure
to share learning and sometimes open hostility to perceived "treading
on toes". Better co-ordination, while not easy, would deliver
great benefits in improving overall labour market efficiency and
make New Deal more cost effective.
6.6 Sharper focus: A universal approach
provides a nominal equality of treatment and opportunity for all
unemployed. However uniformity ignores the very different challenges
in different local economies. The Employment Zones have demonstrated
that a more focused approach within national guidelines can lead
to a much better performance.