Select Committee on Work and Pensions Third Report


VII. Job retention, progression and sustainability

98. Traditionally, Jobcentre Plus (and its predecessor the Employment Service) has measured its success in terms of 'job outcomes' - how many people it gets into jobs. Little attention has been paid to whether people keep their jobs, or end up back on benefit soon afterwards.[95] Research suggests that 40 per cent of claimants who leave unemployment return to unemployment within six months.[96] In a review of research evidence on job retention and advancement in employment, the DWP concluded that those who struggle to find employment tend to be the first to leave a job. The hardest to place are also the hardest to keep in work. People with a past history of spells on benefit; those with low or no qualifications; people with children; and benefit leavers with journey to work problems were all likely to be more vulnerable to job loss in the first three months.[97]

99. Within the New Deal, analysis of NDYP data shows that roughly one in four young adults placed into a job through the New Deal returns to JSA within three months.[98] A survey of employers operating the NDYP and the ND25+ found that 31 per cent of participants left before the 26 week subsidy period was up.[99] Of this group 40 per cent resigned, 30 per cent were dismissed, 21 per cent were made redundant and 2 per cent left for health reasons. Of those who were dismissed, 60 per cent were dismissed for poor attendance, 36 per cent for insufficient quantity of work, 17 per cent for disobedience, 11 per cent for dishonesty and 19 per cent for some other reason.[100]

100. What more can be done to help disadvantaged jobseekers - particularly those targeted by the New Deal programmes - not only to maintain employment, but to progress beyond 'entry level' into their next (and better) job, towards a long-term future in work? During the course of the inquiry, we met providers both in this country and in the US who have been very successful in keeping people in work. Working Links, which has held nine Employment Zone contracts since April 2000, has helped 40 per cent of the long-term unemployed people referred to it into work. Of these, 80 per cent were still in work 13 weeks later.[101] Similarly, Pertemps Employment Alliance, running the Birmingham Employment Zone (visited by the Committee during the inquiry) was achieving 83 per cent employment retention rates after 13 weeks, from the 36 per cent of its participants who had gone into work.[102] Tomorrow's People, working in a number of UK areas with long-term unemployed people, has an average of 85 per cent of their placed employees still in work a year later.[103] The Shaw Trust reported that, of the people it had placed in work through the New Deal in 2001, 78 per cent were still in work.[104]

101. One issue which concerned the Committee was the lack of official 'tracking' beyond 13 weeks, of New Deal trainees once they go into work, in order to monitor retention and progression. The Managing Director of Working Links, Mr Keith Faulkner commented that he would prefer to use a twelve month measure of job retention:

    "We believe that is probably the critical period. If we were to say we were truly successful, we would want to know how many of those people we placed in work were still not necessarily in the same job, but still active in the labour market 12 months later. In some of the areas where we operate, we are exceeding 90 per cent job sustainability after 13 weeks. We are putting a lot into aftercare opportunities. We are still in contact with both the employers and the individuals, but frankly once we get six or nine months out we are beginning to lose sight. We think they are still there. If we are truly successful they should still be there. We should like stronger measures".[105]

102. Mr Faulkner told us that there were no official figures available to Working Links to enable them to monitor former participants' progress over 12 months - and that the cost of collecting the information themselves would divert essential funding.[106] When the point was put to the DWP, Mr Michael Richardson, Director for Work and Welfare Strategy said:

    "The problem in this is the virtual impossibility of tracing people on any statistical basis once they have left the benefit system. There is legislation before the House at the moment which will enable us and the Inland Revenue to talk to each other so that we can trace people's employment record over a long time frame and that will for the first time enable us to get a handle on this. It will take some time for it to come into effect".[107]

103. We recommend that the DWP move as swiftly as possible to the collection of data allowing the progress of former New Deal participants in retaining employment over 12 months, and in increasing their wage levels, to be monitored.

104. In the US, there were also striking figures on job retention. In Philadelphia, the Transitional Work Corporation was succeeding in getting 30-40 per cent of initial entrants into a job. Of these, 63 per cent had retained that employment for at least six months.[108] The Seattle Jobs Initiative, working with low income groups with serious barriers to work, could boast that 60 per cent of those placed in jobs were still in work a year later, and 41 per cent of these reported a wage increase from an average $9.75 per hour on placement to $13.02 per hour.[109] In Portland Oregon, the Steps to Success Programme, operated through Mount Hood and Portland Community Colleges, was achieving 80-85 per cent employment retention levels after 18 months of getting a job. Here, the intake was largely lone parents, formerly claiming welfare.[110]

105. Key features in the programmes above which we consider lead to good retention rates for people facing considerable barriers to work are detailed below.

Training in 'soft' skills

106. In drawing our attention to the employer survey of New Deal workers above, the TUC observed that the list of reasons for dismissal - poor attendance, insufficient quality of work, disobedience and dishonesty - were classic indicators of a lack of 'soft skills' among young people who do not understand the world of work. One of the strong features of all the US programmes we visited was their emphasis on training participants to be job-ready: to be reliable, to dress properly and be drug free, to be able to get along with colleagues and work as part of a team; to have good communication skills and to show a willingness to learn. Skills were developed, partly by intensive courses, and partly by creating an environment which resembled the workplace as far as possible - with similar demands regarding attendance, punctuality and behaviour. Indeed, policymakers in Oregon commented that the classroom was not the ideal setting to acquire work-related skills; they have found that people learned faster when placed in a work environment. Work placements, backed up by concentrated work-focussed skills training and support from case workers were therefore a feature of the Oregon approach, with around 38 per cent of participants having 'work attachment' at any one time.

107. We recommend that 'soft skills' training be an integral part of New Deal programmes aimed at harder to help groups and that the skills training in New Deal programmes be reviewed to see whether they provide these soft skills and workplace ethos.

A personal service with 'aftercare'

108. We welcome the principles behind StepUp and Progress2Work. We believe they will address the needs of those clients who have not yet succeeded through the conventional New Deal options. However we believe those principles need to be rapidly included in the mainstream design of the New Deal. We received evidence that there is a significant minority of clients who go through the New Deal a number of times without getting permanent work, or who have never been reached by New Deal programmes in the first place, because they have deep-seated barriers to work that have not been addressed.[111] We recommend that Jobcentre Plus should develop partnerships with voluntary, not-for-profit and private organisations to provide re-habilitation services for this category of clients. This will involve one to one support, based on outreach work, to address the individual's particular needs.

109. All the providers continued to work with participants for a period after they obtained a job. Ms Debbie Scott of Tomorrow's People commented:

    "We should never underestimate the challenge for somebody who has been distanced from the labour market and gone into work...they may have had their benefit paid on a regular basis and they may have got used to the financial structure of their life, but suddenly for the first time they go to work and they are going to get paid monthly and they may not be able to manage that. It may take up so much of their time that they cease to focus on their work and not have anybody to speak to about that. If you are long-term will not have an extensive wardrobe and it can be a great pressure on people when they go to work to think about how they could present themselves on an ongoing basis. The aftercare service has to be very practical and has to be in a position to deal with some of these issues in order that people feel comfortable, having got the job, about keeping it".[112]

Other help offered might include ensuring that parents obtain reliable childcare, are receiving all the in-work financial help available, and have reliable transport arrangements.

110. The Steps to Success programme in Oregon was similar to many of the programmes in assigning an adviser to an individual participant, who stuck with them both before and after they got a job - thus allowing a relationship of trust to build up before the person actually entered the workforce. The assessment of the Steps programme was that, if people were to lose their jobs, it tended to happen in the first three months. They were therefore moving towards a system of intensive engagement for three months after a participant moved into employment, and up to six months if necessary. A new feature of the Steps to Success programme was activity related to encouraging wage enhancement and career development for people with multiple barriers. Early on, participants were encouraged to think not just in terms of getting their first job, but also of planning a route better to achieve what they wanted in career terms - including the development of the skills they needed to succeed ("ABC" - A job; a better job; a career). Advisers would stick with the participants, once they had started an entry level job, to see if their career plan was working. They could offer funds to pay for additional training or education.[113]

111. We recommend that Jobcentre Plus provides individual advisers for clients and develops its aftercare services for New Deal participants, so that an ongoing relationship is maintained with Personal Advisers or with an independent agency under contract to Jobcentre Plus.

Establishing partnerships with employers

112. Ms Scott of Tomorrow's People emphasised that the aftercare service offered by Tomorrow's People was one where they kept in touch with both employee and employer: "You cannot separate the care you give them both because it is a tripartite arrangement to keep them in work."[114] She added:

    "The more work we can do with employers to help them understand [the adjustments former long-term claimants have to make], so that they do not just write people off because in the first couple of months they do not show for work for whatever reason, the more you can do about that, the more you can get them involved, the better. We have proved that in our aftercare service and retention rates and feedback from employers".[115]

113. Similarly, the Shaw Trust said that they had built up an ongoing relationship with employers: "In dealing with employers generally, we know how to build up the right kind of approach for the employer to come back to us should there be any problem and that is what tends to happen...Quite often when I go round employers I hear them saying that it is a lot better dealing with us than with the other New Deals where nobody seems to care".[116]

114. In the US projects we visited, engagement with employers as part of the post-employment service was a feature of most of the programmes. In the Seattle Jobs Initiative (SJI), for example, staff had developed training for companies taking on SJI 'graduates', designed to improve the 'soft skills' of supervisors of diverse, entry level workers. Training was offered to provide supervisors with the practical skills to understand the transition entry level workers had to make from their home life to a work setting and to help them implement strategies to get the best out of their new staff. [117] Implicit in such work was the development of an ongoing relationship with employers who were able and willing to take on former benefit recipients from disadvantaged backgrounds.[118]

115. We recommend that Jobcentre Plus builds up its relations with employers taking New Deal recruits, encouraging them to develop induction programmes, and the use of mentors, and to give feedback and support to assist entry level employees to progress.

116. One possible concern in encouraging Jobcentre Plus to pay more attention to the retention and advancement of former benefit claimants is that staff will inevitably prioritise those customers who are more likely to produce better results ie the more job-ready. The emphasis on retention may lead to the perverse outcome of less attention being paid to the harder to help. This would clearly defeat the Government's current strategy of focussing more attention on people disadvantaged in the labour market. During the course of our previous inquiry into the ONE pilots (which preceded the introduction of Jobcentre Plus), we visited the Netherlands, where we were impressed by a grading system of identifying a person's job readiness (or lack of it) at an early stage of their claiming benefit. Resources and focussed employment help then followed, based on the degree of 'distance from the labour market'.[119] The advantage of such a system is that, by identifying degrees of job readiness, staff resources can be targeted accordingly to ensure that the harder to help groups are not overlooked and, indeed, are given more intensive assistance. For this to happen, two steps are needed. Claimants' job-readiness needs to be identified at an early stage of their claim; and advisers need to be rewarded for the progress they make in moving people closer to the labour market.

117. In the UK, the present approach is to increase the amount and type of help and support to people as the duration of unemployment or non-employment increases. The Government argued, in its reply to our report on lessons for Jobcentre Plus from the ONE pilots, that this approach provided a more accurate measure of an individual's distance from the labour market and enabled resources to be properly targeted. People with particular needs - poor basic skills, ex-offenders, and those with disabilities were 'fast-tracked' through.[120] In the American employment projects we visited, there was similarly a general consensus that the labour market was the best judge of a person's employability. However, we were impressed by the approach in Oregon where 'letting the market decide' did not mean leaving people to take their chances on their own. Welfare claimants were offered intensive 'workforce development' training in worksearch techniques, self-presentation, in-work financial support and how to access the Internet. Thereafter, they attended the equivalent of Jobcentres on a daily basis where they were offered access to facilities such as the internet, and telephones to help in jobsearch. Weekly networking classes were held, with outside speakers, to encourage people and to share experiences.

118. In the UK, where a wider group of people have access to benefit, many of whom are job-ready, it is not easy immediately to replicate this approach. We believe, however, that there is a case for identifying a claimant's distance from the labour market at an early stage in order to help those people who need it by providing intensive support in accessing the labour market. We repeat our recommendation, made in our report on lessons from the ONE pilots,[121] that protocols be developed to assist Personal Advisers to explore, in a more systematic and consistent manner, a new claimant's work readiness and the barriers they face.

119. It is also important to give advisers the incentive actively to engage with harder to help groups in moving them closer to the labour market. Currently, the Jobcentre Plus performance targets are focussed on measuring job outcomes. We consider that the Government should be seeking to develop a new range of targets, aimed at measuring 'distance travelled' towards labour market participation by clients who are not immediately job-ready. These targets would aim to measure improvements in employability achieved through the intervention of Jobcentre Plus, either alone or through its network of providers. We are pleased that the DWP has taken on board the recommendations made in our report on the ONE pilots and is considering possible measures of 'distance travelled' as part of the development work for the 2003-04 Performance and Resources Agreement.[122]

95   Currently, Jobcentre Plus staff get extra points towards meeting their targets if a JSA customer remains off JSA four weeks after starting a job. Back

96   Destinations of leavers from claimant unemployed, K. Sweeney, Labour Market Trends, October 1996.  Back

97   From jobseekers to job keepers: Job retention, advancement and the role of in-work support programmes, DWP Research Report 170. Back

98   TUC, Ev 81, para 17. Back

99   TUC, Ev 82, para 21, reporting New Deal for Young People and long-term Unemployed: Survey of Employers, ES Report 58, September 2000. Back

100   Percentages do not add up to 100% as some participants were dismissed for more than one reason. Back

101   Ev 44, para 17. Back

102   See Birmingham visit note, Annex 1. Back

103   Ev 55, para 4.2. Back

104   Q. 124. Back

105   Q. 115. Back

106   Ibid. Back

107   Q. 359. Back

108   See US visit note, Annex 2. Back

109   See US visit note, Annex 2. Barriers to employment among the SJI clients included unstable work histories, homelessness, criminal records, mental health concerns, substance abuse, limited English, and welfare status. Back

110   See US visit note, Annex 2. Back

111   See the evidence of The Work Foundation Ev 12-22, Groundwork Ev 50-52, Tomorrow's People 53-55, and Shaw Trust (65-75). Back

112   Q. 123. Back

113   See US visit note, Annex 2. Back

114   Q. 123. Back

115   Ibid. Back

116   Q. 124. Back

117   See US visit note, Annex 2. Back

118   The role of employers in the Government's employment strategy is discussed in more detail below. Back

119   See 'ONE' Pilots: Lessons for Jobcentre Plus, First Report of the Work and Pensions Committee, Session 2001-02, HC 426. Back

120   Reply by the Government to the First Report of the Work and Pensions Committee, Session 2001-02, Cm 5505, paras 14-20.  Back

121   'ONE' Pilots: Lessons for Jobcentre Plus, First Report of the Work and Pensions Committee, Session 2001-02, HC 426, para 30. Back

122   QQ. 364 and 365. Back

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