APPENDIX 14
Memorandum from the Gorbals Initiative
(JG 20)
GORBALS INITIATIVE
This submission is based on the experience of
Gorbals Initiative of working with a caseload of almost 500 individual
job seekers and 200 local businesses.
1. Gorbals Initiative is a Local Development
Company (LDC) based in the Gorbals area of Glasgow. It was established
in 1991 to maximise the opportunity for economic regeneration
arising from the major investment in the physical redevelopment
of the Gorbals. The Gorbals historically has been characterised
by high levels of deprivation, low levels of attainment, high
levels of unemployment (currently 18.6 per cent), and a history
of unsuccessful physical redevelopment.
2. Gorbals Initiative seeks to do away with
long term unemployment in the area through,
— Increasing the number of available
jobs.
— Increasing access to jobs.
— Reducing the number of people seeking
work.
— Increasing investment in the area.
— Raising expectation of clients and
agencies in the area.
3. In short our aim is to create, find,
fill and sustain jobs.
4. Gorbals Initiative is a partnership organisation
between the Glasgow Development Agency, the Glasgow City Council,
Scottish Homes and the Employment Service. It is a company limited
by guarantee and a registered charity and one of a network of
seven Local Development Companies across the city.
5. As an intermediary organisation Gorbals
Initiative serves two customers, local businesses and job seekers.
Activity is aimed at stimulating both labour market demand and
labour market supply.
6. Services to individual job seekers to
enable them to access sustainable employment include,
— vocational counselling and support;
— vocational training and interview
preparation;
— intermediate labour market jobs;
— matching to job vacancies;
— aftercare to ensure job retention
and progression;
— New Deal Gateway and Employment Zone.
7. Services to businesses include,
— business start up support;
— support to facilitate business development
and company growth;
— specialised support in areas such
as HRD development, environmental improvements, property and IT;
— training and employment grants;
— customised recruitment and training
services supported by aftercare.
8. Gorbals Initiative headline achievements
since 1991
— 2,111 jobs filled by Gorbals Initiative
clients;
— 1,111 college and university places
accessed;
— 205 business start ups (since 1993);
— 730 additional jobs created in new
and growing companies (since 1993).
IS THERE
A JOB
GAP—THE
ISSUES
The Widening Gap between Job Seekers and Employer
Requirements
9. Despite falling levels of unemployment
we are working with a client group which requires more intensive
support in order to access sustainable employment. In particular
our experience of providing support to clients on the Employment
Zone (Glasgow is a prototype Employment Zone) has underlined this.
10. Clients who fall into this category
face a range of barriers, which prevent them from entering employment.
These barriers may be personal such as alcohol or drug dependency,
mental or physical health problems, low levels of confidence or
educational achievement or the barriers may be more structural
such as lack of suitable childcare or transport issues.
11. In our experience, employers state that
their main recruitment requirements for entry level jobs are basic
core skills ie time keeping, communication, handling conflict
flexibility etc. These are areas where long term unemployed clients
have particular difficulty and require support before and after
recruitment.
12. One positive aspect is that Gorbals
Initiative has demonstrated that, given the appropriate level
of support and encouragement, these clients can be motivated to
achieve remarkable outcomes. We need to reach down into the ranks
of the long-term unemployed and tackle the barriers to them re-engaging
with the labour market.
13. The emergence of the knowledge economy
has certainly had the impact of widening the job gap. The increasing
use of information and communication technology has resulted in
companies requiring people with higher level skills, so we are
experiencing a trend where the requirements required for what
were once "entry level" jobs are increasing.
14. In addition, within the three growth
sectors in Glasgow, retail, hospitality and call centres, there
is evidence that many of the new jobs are going to students seeking
part time work or people already in work. So, although the number
of available jobs has increased, the prospects for low-income
jobseekers has not substantially improved.
15. For those individuals who are very far
removed from being job ready we need to provide a range of provision,
which can be tailored to individual needs, to progress them to
that stage. It is also important to maintain a "work first"
approach where individuals understand that employment is the primary
objective.
16. The quality of the first job is clearly
critical, and impacts significantly on the prospects for longer-term
job retention and progression. We need to encourage job seekers
and employers to take a longer-term view of career development
and invest in effective induction and staff development programmes.
Ongoing support should be available to enable job seekers to progress
not just into that first job but also to develop their skills
and qualifications with a view to longer-term career progression,
thus creating the ladder of progression where entry level jobs
are made available as people move on.
17. This would serve to prevent the "revolving
door syndrome" where individuals join a training programme,
enter employment and then fall out of employment very quickly
to start the cycle off again. This syndrome also serves to alienate
employers, discouraging them from employing from the ranks of
the unemployed.
Labour Market Intelligence
18. Experience has demonstrated that long
term unemployed clients have a limited and somewhat traditional
understanding of the labour market. In areas such as Glasgow where
the manufacturing industry has significantly declined many of
the jobs that our older (40 years plus) clients trained for in
their youth no longer exist. These clients need assistance in
recognising the opportunities that emerging growth sectors, and
in particular the service sector, might offer.
19. Issues to be addressed include:
— What are the growth sectors, for
example in Glasgow Call Centres are a major growth sector. We
need to run introductory programmes to introduce clients to new
ways of working and challenge the "sweatshop" image
that call centres have.
— We need to break down gender barriers
and the perception of what are "acceptable" jobs for
men and women.
— Many employers have negative preconceptions
of the long-term unemployed, and their suitability to fill and
sustain their jobs, which must be challenged.
— Employers should be encouraged to
take a longer term view on the recruitment and development of
staff.
Working with Companies
20. In the UK we have in excess of 35,000
employers signed up to New Deal, this is a significant number,
but we must ask the questions.
— How many of them have actually recruited
through New Deal?
— Of the employers who have not recruited,
why not, what are the barriers, how can we encourage them to consider
taking on new recruits who have been previously long term unemployed?
What supports are required to fill the gap?
21. Clearly there is a gap between employers
signing up to the New Deal and actually becoming involved in recruiting
through the programme.
22. New Deal and the other initiatives aimed
at improving job seekers employability have had success, however
little consideration has been given to stimulating labour market
demand, ie how employers could use the support of offer to develop
their business.
23. The message that was given to employers
with regard to New Deal was very much take a young person through
New Deal because there was a wage subsidy and it was a positive
thing to do. A more effective approach would be to offer employers
practical support and advice to help them grow their business,
including the benefits to be derived from investing in staff development.
This in conjunction with the financial support on offer would
increase the potential for longer-term job creation.
24. There is however a question of investment,
if we are to work with employers in a more integrated manner then
this will need to be funded in some way.
25. Clearly the quality of the first job
is critical to retention and progression through employment. We
must remember that most businesses are driven by their profitability
(the bottom line). We need to work with employers at a strategic
level to help them understand the dynamics of the labour market
and the costs to their business of high staff turnover.
26. Support should be offered to help companies
develop effective recruitment, personnel and staff development
policies, which would include:
— Job design (job share, flexitime
etc),
— Equal Opportunities policies.
Plus any other measures, which would facilitate
the recruitment of previously unemployed employees and simultaneously
improve, job retention and productivity. This would have a positive
impact on their bottom line, reducing down time, advertising costs,
interview time etc.
27. We should look to the experience in
the USA of Welfare to Work. The Welfare to Work Partnership has
had considerable success working with companies to improve job
retention and reduce staff turnover. Through working with companies
who are seeking to recruit ex welfare recipients the Partnership
has helped companies introduce more intensive induction and mentoring
programmes for new recruits which has significantly improved retention
rates. An interesting point is that most companies that have been
successful in this have been supported by an intermediary organisation.
28. One example from the States is UPS,
who achieved an 80 per cent retention rate for their first intake
of ex welfare recipients. This was a vast improvement on their
60 per cent retention rate for employees recruited through more
traditional methods.
The Role of Intermediaries in the Jobs Gap
29. The UK New Deal Task Force, with support
from the Rockefeller Foundation, has recently produced a report
on "Improving the Employment Prospects of Low Income Job
Seekers: The Role of Labour Market Intermediaries" Gorbals
Initiative was used as a case study in the report.
30. What is evident from this work is that
intermediary organisations are effective in closing the job gap.
In particular those intermediaries that serve both job seekers
and employers have a number of characteristics, which make them
effective.
31. Intermediary organisations,
— Understand the labour market well;
— Know particular employers and their
needs;
— Know job seekers and their needs;
— Are entrepreneurial and customer
driven;
— Keep employment as the primary focus;
— Develop tie to non-employment service
provider's eg local childcare providers;
— Use data to improve performance;
— Focus not just on employment but
on retention and career advancement.
32. These organisations are best placed
to broker the needs of the local labour market and close the jobs
gap.
SUMMARY
33. Gorbals Initiative is a local Development
Company based in an area of Glasgow characterised by high levels
of deprivation and long term unemployment. The company aims to
create, find, fill and sustain jobs through the provision of services
to local job seekers and local businesses.
34. There is evidence of a widening gap
between the skills and aspirations of job seekers and the demands
of employers, and although emerging growth sectors are creating
significant job growth these jobs do not necessarily go to job
seekers who have been long term unemployed.
35. Individuals who have been long term
unemployed increasingly require a range of customised interventions
to enable them to secure and retain employment.
36. The Government's Welfare to Work strategy
has concentrated on labour market supply measures, with little
consideration given to the issue of labour market demand. This
has been a missed opportunity, and one that must be addressed,
especially as there is an increased emphasis on a "work centred"
approach to social policy.
37. We need to understand that businesses
are driven by their bottom line and we need to invest in working
with businesses to help them:
— recruit, retain and progress individuals
who have been previously long term unemployed.
38. The wage subsidies offered through New
Deal, linked up with the range of other supports currently available,
could be a major business development tool. The key here is developing
customised packages of support for companies based on their specific
requirements. This would entail working with individuals and companies
both pre and post recruitment, leading individuals effectively
into quality jobs, which will be sustainable in the long term.
39. The role of labour market intermediaries,
such as the Local Development Company Network in Glasgow, is critical
in the process of closing the job gap at a local level.
40. The New Deal Task Force report identifies
the key characteristics of effective labour market intermediaries,
which differentiate them from "service providers". These
organisations understand the labour market well and know particular
employers and job seekers and their needs.
41. In conclusion it is clear that there
is a jobs gap, which in some areas is widening. We need to work
with employers and balance labour market supply and labour market
demand activity. Research has shown that intermediary organisations
are effective in brokering the needs of employers and job seekers
while providing a range of customised services.
Gorbals Initiative
September 1999
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