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


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 employees.

  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 market—giving all individuals access to regular paid work and employers access to a skilled, flexible workforce—generates 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 expertise—employment. 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 Deal—liked 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 quality—in terms of client and job—and 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 accounting—but 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 years.

  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 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. 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 employment.


  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.

Manpower Plc

November 2000

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