Examination of witnesses (Questions 240
- 259)
WEDNESDAY 22 NOVEMBER 2000
MR LEIGH
LEWIS and MR
PETER SHAW
Mr Pearson
240. I took the liberty of trying to access
your website. I typed in "professional", "public
service", "civil service" and "West Midlands".
Ultimately what came out of it was 38 choices: only one was above
£20,000; the next highest was £12,000 to £14,000,
very little. Then I tried "managers", "business
and commerce", "marketing and sales". I got 40
entries for the West Midlands, including one in Leeds—strange
geographical quirk of the computer system no doubt. Only one was
over £15,000. What you have on the Internet at the moment
is very, very limited indeed in terms of professional job opportunities.
(Mr Lewis) That is fair comment and we should like
to attract more of the higher skilled and higher remunerated vacancies.
The point remains that we do not want to attract vacancies which
we cannot fill. That service itself is very, very new and you
were able to do two things there that people could not have been
able to do even a month ago, you could bring up 40 vacancies in
both categories. The mere fact that that service is now there,
that it is available, as well as the fact that our Employment
Service Direct, which is relatively new, which now takes 50,000
calls a week from job seekers, all of that is positioning ourselves
as a far more professional organisation to deal with. We will
see our market penetration increase but it is not where I should
like it to be as yet.
241. Although it might be new it took me 34
minutes to be able to type in enough to get those first 38 choices.
The system does not seem to me to be at all user friendly. To
type in job type you have to have about eight goes before it will
give you a selection of categories; similarly with job title.
The whole thing took me something like one hour 43 minutes to
be able to do both. I do not have a slow computer.
(Mr Lewis) I am grateful for your industry in trying
to use the site. It only went live on 9 November. We are not deliberately
promoting or publicising it yet because it is in its very, very
early days. Like most new sites in its very first days—and
I sat at home too on Sunday evening getting into our own site—it
had some bugs in its very early days which we are progressively
ironing out. If you were to use it this evening I would hope you
would find a far better and quicker response time than you found
in those first few days. By the time we give it any real publicity,
it will be working far more swiftly. It has been a huge effort
to get it there and we should be very pleased with that.
(Mr Shaw) Mr Lewis and I followed in the Committee's
footsteps last week and we went to Australia as well to learn
what they were doing. Clearly the Internet arrangements are very
innovative there indeed. I can see some of the same things happening
here as happened there, because there will be the private employment
agency vacancies on as well. That will mean that the number of
professional vacancies available to people through that network
will be very considerable. As a newcomer to this I was also very
interested in some of the work being done in the South West, where
recently a pilot has been set up to attract unemployed people
looking for high level occupations and providing help with online
CVs and matching of people to vacancies at the higher level, the
professional end. I shall personally be very interested to see
how that experiment develops and works.
Mr Allan
242. Following up this issue of the management
of professional level vacancies—and I was impressed with
some of the case studies you have where you are doing large-scale
recruitment for firms—the one which struck me was the Dixons
Stores Group recruitment in Sheffield which I know is effective.
Are people like Dixons Stores Group coming to you for their management
and professional level vacancies or is it just the lower levels
of employment they are looking to you for? Do you have any success
stories where large companies are using the Employment Service
for the management and professional level recruitment?
(Mr Lewis) We do not have any of the Dixons variety.
At that level there is still probably a view that that is a more
specialist marketplace and not one where companies would feel
instinctively the Employment Service is their first port of call.
The pilot which Peter Shaw has just mentioned is very important.
It is called Employment Service Plus and it is actually recognising
that we do have a gap in our service provision, that we do not
offer as professional and as comprehensive a service to higher
level job seekers as we do to job seekers in general. That is
employing a group of consultants who are not only using our own
vacancies, our own net, but a whole set of contacts and professional
organisations. It is not just the jobs we ourselves have. We can
be the conduit to lots of other agencies, lots of other organisations,
professional and others, who have jobs to offer. If that goes
well and it is very new that may prove a template for the future.
Dixons is interesting because Dixons originally were not using
the Employment Service at all. It is a mark of the Employment
Service in its new guise that we went to Dixons through our account
managers, through our Large Organisations Unit and we said to
Dixons that they were developing a major new facility in the City
of Sheffield and we believed we could be their recruiter of choice
because we believed we could give them a better service than any
other recruitment means. We had long discussions and it is fair
to say that Dixons initially took some persuasion that we could
do that job. It has gone very, very well. We filled very large
numbers of vacancies and we hope if you were to invite Dixons
here they would say they were very impressed with that service.
Mr Twigg
243. I should like to ask a couple of broader
questions about the relationship between the Employment Service
and employers. As a Committee we spoke with Chris Humphries from
the British Chambers of Commerce and whilst he did say that he
felt the perception of the Service by employers had improved in
the last three years, he still said there was a concern that the
Employment Service did not view employers as a customer and that
the Employment Service was still not very good at understanding
the needs of employers. Would you feel that this is a fair or
unfair assessment? Assuming that you think it is a little unfair,
can you give us some reasons why you believe that is the case?
(Mr Lewis) It is a little unfair. Like so many perceptions,
perceptions tend often to be based on what was and it can be quite
a long task to change perceptions. Sometimes the perceptions which
are hardest to change are of the employers who do not use the
Employment Service and have a kind of mindset of what it is. As
we said in our own memorandum, I would not want to sit here for
one moment and say that our service to employers is as good as
it yet could or should be. We actually put in an illustration
of a case where our service to employers is not as good as it
might be. That said, we are very, very clear indeed that employers
are now an absolute key customer group of the Employment Service.
We have done a great number of things in the last two to three
years to promote that position. We have established an account
management function. It used to be the case, for example, that
if you were a major national employer and you rang the Employment
Service and said you had six vacancies in Bristol, seven in Birmingham,
eight in Strathclyde we would on a good day have directed you
to three different offices. Now we will say that your account
manager will ring you back and you can deal with one person who
will deal with all your recruitment needs and we shall sort ourselves
out internally, we shall not ask you to do that. We have established
our first ever marketing plan, Marketing Means Business, so that
our offices see employers as real customers. We have copies of
our Employer Service Standards. It is very important and I have
copies which members might just like to take away with them. In
the past we did not have a set of service commitments to employers
which said if they entrusted a vacancy to us, we would as the
absolute minimum aim to deliver the following. We now say these
are our commitments to you as employers and every employer notifying
a vacancy to us should receive a copy of that which includes commitments
like a named contact who will remain in touch with you until your
vacancy is filled or otherwise dealt with to your satisfaction.
We have done an awful lot to improve our service to employers
and it is showing through, but you never do enough and you never
get to the end of the road and you can never stop.
(Mr Shaw) As part of my induction I went to the Peterlee
call centre where employers phone direct and I listened in to
a number of calls. There was a very positive response from employers
to that service. As part of the Annual Performance Agreement (APA)
this year Ministers introduced an employer service target which
measures the results of surveys on delivery of the four employer
service commitments. It was only introduced in July. The aim is
that by the end of the year that should meet an 80 per cent standard;
in the first quarter it was 78.4 per cent, close to target. I
know the ES is making every effort to ensure that the 80 per cent
target is met. Including that target within the employer service
target is a measure of the importance Ministers are attaching
to meeting employer expectations.
244. How far is that simply about targets for
filling vacancies rather than the broader relationship between
the Service and employers? One of the points which was put to
us was the suggestion that there is an improvement in the administration
when it comes to issues of vacancies—in your answer you
focused on that—but a suggestion that not enough time goes
into more practical training about the broader needs of employers.
(Mr Lewis) We are doing a lot to improve the labour
market knowledge of our staff but actually the employer service
target is very much linked to these commitments. The commitments
are that whenever a vacancy is placed with the Employment Service
we will provide a named contact who will handle your vacancy,
advise you about the services we can provide, confirm with you
your minimum requirements, keep in regular contact with you until
your vacancy is filled. The monitoring of the target is by an
outside organisation ringing a statistically valid group of employers
who placed a vacancy with us and effectively asking whether the
Employment Service, in the case of that vacancy which was given
to them on that day, met those tests and they are scored. That
does not mean that I am actually satisfied with that as a good
enough service to employers. What I do think is that the very
best organisations in this world set an absolute minimum standard
which they aim to meet time and time and time again. Those are
the standards I want us to meet time and time again, every time
we take a vacancy. If you can do that, then you can build more
sophisticated, more professional services yet on top of that as
we have done in some of the case studies we have illustrated in
the memorandum.
245. What sort of proportion of time would you
say the job broking staff are spending actually with employers
discussing their recruitment needs?
(Mr Lewis) That is a hard one to answer and the honest
truth is that I do not have an answer which could give you a specific
percentage. One thing I would say is that we set a set of priorities
for the Employment Service each year and this year there are just
six and one of those six priorities is improving employer service.
At the beginning of the year I took a set of conferences with
every single Jobcentre manager in Britain at which we talked about
those priorities and how we were going to improve them. One of
the things I said to those Jobcentre managers is that a personal
test which I shall observe is that I expect every one of our managers,
not just managers, but if you start at the top it tends to have
a real impact down, I expect every one of our managers every week
to be out of their offices meeting at least one of their key employers
in person to ask them what they think of the service we are offering
and how it can be improved. I said that as I go round offices
that will be one of my first questions to the managers I meet
and it is. I tend to be quite persistent in asking who the employer
was, whether they met an employer last week, if so what did they
say and what do they think. I do it myself. I try to meet major
employers myself to practice what I preach.
Mr Pearson
246. Do you set targets for those managers saying
they should do so many employer visits a year as part of their
individual performance targets?
(Mr Lewis) No, we do not, it is fair to say, in part
because there are only so many targets, so many absolutely explicit
targets you can hold an individual set of managers to. The mere
fact that one of those targets that every single manager is now
being measured by is that employer service commitment, does mean
that is very high on their agenda. Probably by now they have begun
to take a bit of notice of what the Chief Executive says he is
going to ask them about personally as he goes round. That message
is beginning to be there.
247. I am sure that is the case. At an anecdotal
level, I recently attended a Jobs Fair which was run by the Employment
Service at Merry Hill shopping complex. Highly effective, highly
efficient, I have nothing but praise for the way the Employment
Service got the vacancies in and were getting people who were
interested in a job to come in and meet them in a useful environment
where they can normally be found doing other things. Very well,
was my impression. May I ask a question about the role of employers?
What I am trying to get at is that we all talk about partnership
these days and the role of employers in New Deal and other sorts
of local partnerships. Are you really satisfied with the current
level and the nature of employer involvement that you do get in
these partnerships? What sort of lessons have you learned in the
process?
(Mr Lewis) Not sufficiently satisfied at all. One
comment before I turn to your actual question and your observations,
for which many thanks. We do not do enough of this yet but part
of the change which we are trying to create in the Employment
Service is that in a sense we are no longer an organisation which
waits for its customers to do us the favour of coming through
our doors. That is not where our customers are. Our customers
are where they are, both job seekers and employers and we have
to go out to meet them and deliver them a service wherever it
is they are. No, we do not yet draw on employers to the degree
we should. We do it much more than we did. We have employer consultation
groups at both national and regional and local level. Through
the New Deal partnerships we have involved employers to a degree
which is probably unprecedented and almost 80,000 employers have
signed employer agreements under the New Deal. This is hard work
because employers have busy lives, their first priority is not
necessarily taking part in a partnership with the Employment Service.
We actually have to demonstrate to them that it is worth their
while to give up what is very precious time to them to come to
work with us. Therefore we need to show them that by doing it
there will be a benefit to them, either literally to their company,
their organisation individually or at least that they can see
that their input is being taken back by us and reflected in the
development of our services. That is hard work. What I would say
is that if you had spoken to the typical Employment Service manager
five, six, seven years ago and asked him or her how they spent
their time, they would have given you an account of their time
spent very largely inside the office. If you talk to them now,
they will give you an account of their time spent very largely
or at least much more outside the office meeting a whole variety
of organisations. That is good and I want to encourage it.
248. In a number of areas it has tended to be
representative organisations that fulfil the employer's role.
In a lot of cases it has been TECs combined with Chambers of Commerce.
With the change to the small business service and Learning and
Skills Councils some of these people are likely no longer to be
there. Do you see that as a concern? Do you get the employer representatives
you can or would you prefer to have direct employers and companies
rather than representative organisations?
(Mr Lewis) It is certainly a challenge for us because
the structure is changing, TECs are going, Learning and Skills
Councils are coming and an absolutely key relationship for us
to build will be with the new Learning and Skills Councils. That
relationship is being forged at both national and local level.
I am invited to be at meetings of the National Learning and Skills
Councils, my field directors are invited to be at local meetings
of the individual Learning and Skills Councils. Forging a really
good relationship there will be very, very important, as will
continuing those relationships with employer organisations, be
it Chambers, be it employer organisations at a national level.
These are not either/ors. Having good relationships with individual
employers does not mean you cannot also have very good relationships
with Chambers and national organisations. We have a very, very
good working relationship, to take just one example, with BHA,
the British Hospitality Association, where we work very much in
partnership because their aims are very much our aims. They want
to convey an impression of an industry which is giving secure
worthwhile employment, which has not always been the impression
that people have had in the past. We have worked together very
successfully both on New Deal and in other ways and that kind
of model is increasingly one we are using and operating.
(Mr Shaw) I was very encouraged on Monday evening
when I went to an event run by the London Employers' Coalition
about New Deal. They work very closely with the Employment Service
across London. They made a series of presentations to individuals
who have done particularly good things under New Deal and companies
as well. I was impressed by the range of involvement there. I
was also very touched when one of the small companies was given
an award. Some of the people in the company were in tears of joy
when they won this award for what they had done on the New Deal.
I was slightly taken aback by that but it was really very heartening
to see that level of commitment by employers to work with the
Employment Service and the New Deal task force to make the New
Deal deliver well.
249. You mentioned the Learning and Skills Councils.
Do you think it would be useful to have Employment Service representation
on the boards of the local Learning and Skills Councils?
(Mr Lewis) Yes, I do, certainly the presence of the
Employment Service and that is indeed what has been planned.
250. What about actual membership?
(Mr Lewis) Actual membership in a sense is another
issue because we are talking about two institutions. The really
important thing is that there is really good cooperation and the
Employment Service is at the table of each Learning and Skills
Council and that is absolutely intended and the guidance which
the Secretary of State has given is very much asking for that
to take place.
Chairman
251. I do not think we shall include in our
report that the Employment Service had us in tears, if you do
not mind.
(Mr Shaw) Tears of joy.
252. The question of employers as your main
customer. We had some evidence from Atkinson and Meager and they
argued very powerfully that the Employment Service should, in
their words, be "formally and consistently directed to regard
employers as its main customer". Part of our present study
is to investigate the demand-led strategy which seems to be, from
what we have seen, effective in so far as the closer that the
recruiting agency or intermediary or the Employment Service gets
to understanding the needs of the employer, the far more effective
you can be in training people to the needs of the employer and
placing them into secure jobs with a career development. In your
memorandum you reject the suggestion that employers should be
your main client. Can you explain why you take this stance?
(Mr Lewis) I shall certainly try to do so because
it is close to the heart of our work. I do not actually think
that a demand-led strategy does mean that employers have to be
our main overriding customer and indeed the quotation which we
put in our memorandum in paragraph 5.2 suggests that is not the
case and that is a definition given by others. I actually think
this is a slightly sterile debate as to whether employers or job
seekers should be our main customer; the sense is that the other
one is an unimportant customer in some ways. We cannot do our
job properly unless we regard both employers and job seekers as
equally important customers. If we get it wrong with either, we
cannot satisfy the other. If we do a good job with employers and
they come to believe we are a professional organisation to whom
they should come because we will help them meet their business
needs, they will give us more vacancies, they will work with us
more often, they will be more willing to open their organisations
up to unemployed people and many others. In turn we shall then
give a better service to job seekers, particularly to unemployed
job seekers and the reverse is the case. This is actually a false
dichotomy and I think that we are right to regard these as both
equally important customers.
Mr Allan
253. Many of the recruitment difficulties that
employers have faced, it has been suggested to us in evidence,
where there are areas of skills shortage are because of poor recruitment
practices by the employers themselves. As you are the largest
labour market intermediary, do you believe that the Employment
Service have a role in educating employers in more effective recruiting
practices and if so, how are you seeking to exercise that function?
(Mr Lewis) We do not have a role to be the pompous
preacher going round the country saying you must do this and you
must not do that. Employers would likely tend to reject that sort
of approach. This is all about partnership in the end; it is all
about getting closer to your customer. We need to be close to
our employer customers to understand what their recruitment needs
are and to persuade those employers that we are really going to
be as professional and good and effective as we can at meeting
those needs. Once we have established that kind of relationship,
then we can say to an employer against that background we think
this is what is holding recruitment back. We think either their
salary levels are not competitive or their terms and conditions
or training and development or their investment in people is the
thing which is holding them back and causing people not to be
as keen to take and retain their vacancies as others. Having that
kind of dialogue depends on establishing quite a relationship
of trust. Increasingly we are doing that with employers. Increasingly
we have the kind of conversation about recruitment difficulties
where they ask what they and we together could be doing to try
to alleviate those recruitment difficulties.
254. May I ask about the trend for employers
to outsource personnel and recruitment functions? The whole human
resources thing is frequently outsourced now. Do you see that
trend continuing and if so, how does that affect your work as
the Employment Service?
(Mr Lewis) It is hard to guess that trend. You see
it continuing in a sense. In other industries, including construction
where there was a tendency for the major constructors at one period
to employ almost no-one directly and to recruit almost entirely
through sub-contractors and others, some have moved back towards
employing people more directly because they are seeing that is
actually the commercial difference, the advantage is the quality
of their people. It goes both ways. Where employers do outsource
at least a part of their recruitment, which is often to private
agencies, for example, we tend then to work very closely with
those agencies. We are very willing to do that, we have a very
cooperative relationship with agencies. In a sense it almost starts
from the perception that if that is what this customer wants to
do, if that is how they want to conduct their recruitment and
they believe that is best for them, then our business is to respond
to their need in the most effective way, rather than to question
their whole recruitment methodology.
255. Following up the Chairman's point about
your customer focus on the employer and whether or not it should
be focused on the employer, how are decisions made about using
your resources? For example, you referred to the Dixons Stores
Group example earlier. Dixons had chosen to work with the Employment
Service in Sheffield; Sheffield is a high unemployment area, you
can see the logic of that. If an employer were coming into an
area of low unemployment, somewhere like Basingstoke, the M4 corridor,
somewhere where that is not seen as such a high priority, how
would you then decide whether or not to give them the kind of
service you have given Dixons in Sheffield, because clearly it
is very intensive in your time. How do you work those priorities
out?
(Mr Lewis) You do work them through in the sense that
you are always taking pragmatic decisions about the use of resources.
I do not want to pretend that we are quite into the mould that
we only ever say yes. Sometimes in an organisation you have to
say you are sorry but you cannot afford to devote that level of
resource simply to that one issue. Actually we have a pretty good
record which will deliver a very high quality service for major
recruitment in areas of high and low unemployment. In the example
of Trowbridge, where Virgin established themselves, they came
to us as their sole recruiter. We have recruited a very, very
high proportion—I went there myself only recently—to
meet the Virgin management who were complimentary in the extreme
about the Employment Service. That is a low unemployment area.
The trick we took there was to not confine those people whom we
referred to Virgin to those people whom we might regard as the
classic customer group of the Employment Service, unemployed people,
where unemployment in that part of the world is low. Many other
people who are not working but want to work, for example single
parents, labour market returners, people who have taken early
retirement but would like in a sense still to work for part of
their time, were very much the customer base we sought to attract
to Virgin with considerable success.
256. This is really the issue of the partnership
with the private agency which you referred to in the previous
answer and in a sense the private agencies will be the competitor
both in the Virgin example or the Dixons example or many of the
others. How does this work with private agencies actually function
when in a sense you are competitors? I understand there was a
pilot scheme for the co-location of the Employment Service and
Reed's in Woking but that broke down after the private agency
indicated that they no longer wished to share their information
with the Employment Service. Partnership with employers is one
thing but how does this partnership with private agencies who
are competitors for the Employment Service actually work? In some
senses, are you not bidding for the same contract with the large
companies?
(Mr Lewis) Up to a point. Our overall approach in
terms of private agencies is very much one of partnership. We
do not seek to be direct competitors. For example, if a company
is using a private agency and has used it for a long time, it
would not be our normal stance to arrive at their door and say
please, please give up your private agency and use us instead.
We do not see ourselves working in that way. We do very much work
in cooperation with agencies; a significant proportion of the
vacancies we carry in our Jobcentres comes through agencies to
us. That is good for agencies, it helps them meet their business
targets and it is good for the Employment Service and our customers
too because it means unemployed people have a wider choice of
vacancies available to them. We do not seek to compete head on,
we do not seek to compete in the core temporary marketplace which
agencies dominate. We also have a fairly radical and innovative
partnership where we have actually established a company called
Working Links with a major agency—Manpower—along with
a major consultancy—Cap Gemini Ernst & Young. We see
ourselves very much as operating in partnership rather than in
direct competition.
Judy Mallaber
257. May we have a look at the Innovation Fund
and the use of intermediaries because that ties in again very
much with our visit to America and what we learned there? Could
you just tell us how the criteria for shortlisting Innovation
Fund bids were devised and which individuals have been responsible
for assessing the bids? We have heard about Wildcat being paid
quite a lot of money and we are always interested to know how
much money people get. Can you tell us how much Wildcat are getting
for helping develop UK intermediaries? Why are we going to them?
Do we not have anybody in this country who can tell us? The other
thing is that when we were in America it was so clear that the
whole system was so different, particularly the welfare system,
with the emphasis very much on lone parents and we have more of
the emphasis on young unemployed men. Does that experience translate
over?
(Mr Lewis) First of all the generality. The Government
is keen to promote the use of intermediaries and that is why a
good part of the Innovation Fund which has been established under
the New Deal, certainly the most recent round of Innovation Fund
bidding, is directed to help promote and establish intermediaries
in the UK. I agree with you that the situation here and in the
United States is a very different one. I do not claim to be expert
in the United State. You probably know significantly more about
it than I. I do think that some of the roles which intermediaries
play there are indeed played here effectively by the Employment
Service. The Employment Service in the US is state based and variable
in reach and variable in quality. Having said that though, there
is a real role for intermediaries which is not one which is in
competition with or in conflict with the Employment Service. There
will always be employers, either individual employers or groups
of sectoral employers, who will value working with an organisation
which can really get inside their business, get inside their thinking
and help them through a whole series of selection and recruitment
processes to recruit people who they believe will be very valuable
to them in the longer term. The Innovation Fund is looking to
encourage a set of bids. We are in round three of the bids at
the moment, a prospectus was issued in June of this year, that
invited expressions of interest, those are being turned into firm
bids. The assessment process is a process which involves colleagues
from the New Deal task force and the Employment Service and from
business in assessing those bids. To go onto the third leg of
the question: why are we interested in Wildcat? We are interested
in Wildcat because they have done some interesting and innovative
things in the United States and their track record there, particularly
in the financial services sector has been an interesting one and
we should be very open in looking at experience from elsewhere.
You have met Jeff Jablow here in the Committee.
Chairman
258. And also in the States; we went to see
him there.
(Mr Lewis) They have been generous with their time.
To date the taxpayer in the shape of the Employment Service and
the DfEE has not paid Wildcat for their time. Wildcat have been
remunerated by private companies who have been willing to sponsor
their activities. That may change, because Wildcat may seek to
benefit from the Innovation Fund and if so we shall measure their
bids in accordance with all the normal rules of Government Accounting
before we decide whether that would be right or appropriate.
259. That is quite reassuring. I must say we
were very impressed with the Wildcat work and certainly their
results were very striking in what they called Welfare to Wall
Street. I continually quote what we saw. It was really very striking
indeed. We were pretty certain that they must be getting a hefty
sum from the Employment Service; I am rather glad to be told that
they are not.
(Mr Shaw) Quite a bit of funding for the work does
come from the Rockefeller Foundation.
(Mr Lewis) It sounds as though we should follow in
your footsteps and visit the US as well as Australia.
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