The Work Programme, a scheme to reemploy the unemployed, is irrelevant for much of manufacturing and incompatible with the new found desire to help the unsung "M" in SME, says Will Stirling.
Data from the Work Programme was mauled in the press last week.
Despite creating thousands of jobs that lasted six-months or longer, which is the qualifying period for training providers to get paid, most newspapers condemned the government’s initiative to get long-term unemployed back to work
The first official data showed only 18,270 out of 785,360 long-term unemployed adults who had been referred to the Work Programme had completed six months in jobs between June 2011 and the end of May this year.
So the six month employment rate in the first year of the Work Programme was just 2.3%, well below the target of 5.5%.
Liam Byrne, the shadow work and pensions secretary, said the Work Programme had failed on every measure the government had set and it was “worse than doing nothing.”
However, Britain’s biggest employer body the CBI not only defended the Work Programme but celebrated it, saying while there was a long way to go, the 132,000 jobs created thus far, by its measure, was a mark of success.
“The Work Programme, along with its cousin the Youth Contract, is working and is proving popular with companies, as our case studies show,” said Jim Bligh, head of group, public services at the CBI.
“Yes it depends on which businesses you speak to. Premier Inn, for example, has hired several hundred new recruits through the two schemes. For manufacturers in advanced engineering, naturally the type of people they want often need hard skills and many see an apprenticeship or traineeship as more appropriate than the WP.”
No kidding. TM asked a small sample of manufacturers, all SMEs, what they thought of the Work Programme. The simplified consensus “We are here to make money, not reduce unemployment statistics.” In a very competitive labour and product market, firms simply don’t have time or the resources to take a chance on hiring a NEET – someone Not in Employment Education or Skills – with the risk associated with that appointment. At this moment in the soft recovery, they need recruits to hit the ground running.
Kevin Parkin, managing director of Knight Warner, an industrial automation company in Derbyshire, said “Firms like mine sympathise with the purpose [of the Programme], but the fact is we, unanimously, need people to join a business who are work-ready and have the right attitude to helping the business. So many do not have this basic attitude.”
That’s why Parkin and Business Education South Yorkshire set up workwise about five years ago, a scheme to provide more 14-18 year olds a chance to work in local companies in school time and the holidays, to better understand what employers really need from them. “Absolutely 100%, work placement and job schemes need to be employer-led. You must cater for the needs of business or it will fail.”
A lone voice? EEF, the manufacturers’ organisation, has no statistics on the efficacy on the Work Programme. It has not done a membership survey, partly, says employment and skills policy adviser Verity O’Keefe, because EEF feels the programme is less relevant to manufacturing than routes to work like apprenticeships, and because it doubts whether enough members have even heard of it.
“We had to make an FOI (Freedom of Information) request for statistics for the Youth Contract,” says Miss O’Keefe. “The sense here about the Youth Contract is that members are far more interested in money being spent on readying new hires for work than the [approx] £2,000 per head cash incentive for hiring a Neet.” The money incentive is not the issue for manufacturing firms, but the basic components of employment – basic English and maths, timeliness, ability to answer a phone clearly – are.
I asked three training providers who deploy the Work Programme to give me the percentage of jobs they’d placed in the manufacturing sector, Ingeus, EOS and Serco. None could answer on the spot and none have got back to me (Serco was contacted by email not phone).
At the Leading from the Middle Summit hosted by GE Capital on July 2nd, CBI director-general John Cridland summarised one key problem the unsung “Ms”, the mid-market companies from £15m to £800m turnover, have in their quest for growth. Finding and retaining high calibre, external management, yes, but the bigger barrier is attracting talented young people who absorb far more career marketing from big multinationals.
“One hundred per cent – work placement and job schemes [for the long term unemployed] need to be employer-led. You must cater for the needs of business or it will fail.” Kevin Parkin, Knight Warner
“There is an “alphabet soup” of skills schemes, some government-backed, to help people train up for jobs that employers need, it is confusing and we are trying to simplify it. At the same time, the Ms have a pressing need for attracting the right talent. Sadly I see these two compatible movements are diverging, where they must be far better aligned.”
Given the need for growth – and right now, not in 2015 when the £1bn infrastructure spend will stimulate construction and manufacturing – and the encouraging performance of the UK MMs (mid-market) firms, more of whom have recorded 10% growth in the last 12-mths here than in Germany, is it not right to ditch the vilified Work Programme and redeploy the £5bn budget set aside for it by Iain Duncan-Smith, into more schemes like workwise?
A national work experience programme, one that helps the young unemployed as well as school leavers better understand the real needs of business in their community.
The Neet problem is big and companies sympathise with the predicament of the long term unemployed. But the reality is many SMEs who want to grow, and not only in manufacturing, can ill afford to be so charitable to Neets at this moment.
The CBI’s Jim Bligh disagrees. “Remember, training providers who deploy the Work Programme can only get paid once their candidates have stayed in the job for six months. They do prepare these people for the workplace and this system incentivises them to do so.” That’s as may be. But canvas the manufacturing community and I suspect most SME firms would advocate the workwise or Apprenticeship route to work, and share Mr Parkin’s views on the value to them over the Work Programme.
Has your company used the government’s Work Programme, Youth Contract or Traineeships to recruit? What was your experience? Get in touch with TM: [email protected]