1.  EXECUTIVE SUMMARY OF EVIDENCE

  Private recruitment firms have an essential role to play in helping unemployed people find work.

  Temporary work contracts undertaken through private recruitment firms often result in a permanent job offer. 150,000 permanent jobs were filled through this route in 1999.

  Private recruitment firms have an important role to play in providing skills training and improving employability through temporary assignments.

  Recruitment firms are skilled at "selling" a candidate to a client and in convincing clients to recruit on the basis of competence and skills.

  Employers should be encouraged to consider internal training and development and to implement more flexible working methods to encourage unemployed people back to the labour market.

  Consideration should be given to certifying unemployed people's attendance and conduct at benefits agency to be used as a "passport" to registration.

  Temporary work provides an important introduction to work because it offers flexibility to workers to work when they want or are able to.

  Entry level jobs are an important stepping stone into employment.

2.  BACKGROUND ON THE REC

  2.1  The Recruitment & Employment Confederation was formed in January 2000 by merging the Federation of Recruitment and Employment Services (FRES) with the Institute of Employment Consultants (IEC). It has some 5,800 corporate offices and 7,500 individuals as members. Its mission is to champion providers of recruitment solutions. REC members operate in virtually all sectors of the employment market and represent a wide range of businesses, ranging from small independent firms to mullet-national organisations.

  2.2  It is estimated that the recruitment and staffing industry payrolls around 900,000 individuals in temporary or contract jobs each week. Temporary and contract staff are used throughout the UK economy. The chart below illustrates the segmentation of the temporary and contract employment market in the financial year ended 1999.

TEMPORARY/CONTRACT SEGMENTATION

2.3  The industry fills around 450,000 permanent jobs annually. The chart below illustrates the segmentation of the permanent recruitment market in the financial year ended 1999.

PERMANENT SEGMENTATION

  2.4  The recruitment and staffing industry clearly has an essential role to play in labour markets of all kinds. It has close links with employers both at local and national levels and in a wide range of vertical employment markets.

3.  ENCOURAGING EMPLOYERS NOT TO DISCRIMINATE AGAINST UNEMPLOYED PEOPLE

  3.1  The recent Jobs for All report published by the DfEE identifies that most employers recruit candidates.

(a)   who have the perceived and required skills;

(b)   who represent the lowest risks in recruitment.

  3.2  We would not argue with this analysis. Many unemployed job candidates are lacking in confidence and in job-seeking techniques. Private agencies have a role to play in improving employability by providing temporary work and also training for unemployed candidates. Many employers, when interviewing a candidate for a permanent job, will express reluctance to engage on a permanent basis a candidate who has been unemployed for some time. The risks in doing so include perceived lack of motivation, or consequent problems with time keeping and attendance. A solution that works for both employer and job seeker is for the employer to engage the worker on a temporary basis via the recruitment consultancy for an agreed period. If the worker proves satisfactory at the end of this period, the client engages him or her permanently. This has advantages for all parties: the worker is able to benefit from an employment opportunity that suits his or her skills; the employer's level of risk in engaging a candidate who is unsuitable is reduced to a minimum. The arrangement is more beneficial to the employer and employee than a probationary period. If an employee does not complete a satisfactory probation period, there is a sense of failure on both sides. This arrangement leads to no sense of failure and helps to increase job seekers' employability.

  3.3  Recruitment consultancies have an important role to play in encouraging employers to discriminate against unemployed people. Recruitment consultants are trained in "selling" a candidate's skills to employers and are far more likely to be able to persuade a potential employer of a candidate's competencies and skills than a job seeker who may have problems with self-esteem and confidence after a period of employment. Recruitment consultants are also trained to question employers as to why they are demanding particular skills or attaching conditions to a job specification (eg age qualifications) and to give advice on the quickest and most effective way of filling a job. In many cases, employers need to be encouraged to think creatively about the job they want to fill and the type of person who might fill it. Competence based recruitment is accepted good practice and has vital role to play in persuading employers only to recruit on the basis of skills and competencies rather than on say a period of unemployment.

4.  WHAT CAN THE GOVERNMENT DO TO ENCOURAGE EMPLOYERS TO RECRUIT UNEMPLOYED PEOPLE?

  4.1  Skills shortages exist throughout the labour market. The REC Report on Jobs for February showed that the labour market is at its tightest since the mid 80's. There are 3.3 unemployed people for every vacancy compared to a ratio of nine unemployed people per vacancy in the late 80s. In spite of such skill shortages many employers remain very rigid about their recruitment policies, preferring to try to recruit from competitors or from people currently in employment rather than considering the alternatives of offering training or development either internally (so creating vacancies at lower skill levels within the organisation) or externally (so offering opportunities to people who are unemployed), or by implementing more flexible methods of working to encourage unemployed people back into the labour markets.

  4.2  The Government has a role to play in promoting best practice by encouraging employers to combat skills shortages by planning effectively and by looking at more creative methods of recruiting.

  4.3  Obviously-job seekers who have been unemployed for some time lack recent references. This makes some employers more reluctant to employ them. It also makes private agencies more reluctant to put them forward for permanent vacancies or to engage them for temporary work. A "passport" issued by the benefits agency for unemployed workers could help to verify the individual's period of employment and possibly include a report on their conduct and time keeping at interviews.

  4.4  It would also be helpful if unemployed candidates received a training record which would detail any training received and the pass mark achieved as this would provide evidence to a potential employer or recruitment consultancies of the skills an individual had obtained.

5.  ROLE OF PRIVATE EMPLOYMENT AGENCIES

  5.1  Private employment agencies have a vital role to play in the efficient functioning of labour markets. As well as matching candidates with employers who are recruiting for permanent jobs, the industry has a vital role to play in facilitating flexibility in the job market via the provision of temporary and contract staff to employers throughout the UK and in all sectors of the recruitment market. Recruitment consultancies have close and unique knowledge of local and vertical job markets. This means that they are well aware of the skills needs that employers have. The training offered by recruitment consultancies mirror closely those skills needs and so increase employability of unemployed people.

  5.2  The importance of temporary work in providing a bridge for unemployed people who find it difficult to take working on a full time basis—for example because of family commitment or illness—is underestimated. Temporary work offers an opportunity to work, with the social benefits that brings, but allows individuals flexibility to work when they want or are able to.

  5.3  Many older candidates who find it difficult to find work because of the attitude of employer to older workers find that temporary work enables them to participate in the labour market. Employers who may be reluctant to engage older workers will willingly engage a temporary worker whose application for a permanent job they might reject on grounds of age. Temporary work often leads to a permanent job, once employers have had an opportunity of assessing the ability of the individual. 150,000 people found permanent jobs through this route in 1999. Attached as an appendix are case histories from one REC member. These illustrate how private recruitment firms can offer very practical help to unemployed people.

  5.4  The REC has long encouraged its members to build close relationships with the Employment Service and where appropriate to post vacancies in the Employment Service offices so that a wide range of job-seekers have access to vacancies. This has been a very successful co-operative arrangement for both services.

  5.5  The REC is working with the Employment Service to explore how the Employment Service's Website (Jobbank) can include vacancies from private agencies and how to access to unemployed people can be maximised.

  5.6  The Employment Service and REC are also producing a jointly a Good Practice Guide on co-operation between job centres and private agencies. This will be circulated to job centre staff and also to REC members. The objective is to illustrate the ways in which co-operation has benefited job-seekers and the commercial benefits this brings to both the Employment Service and private agencies. It is also anticipated that this will heighten the level of debate within both the public and private recruitment sectors and encourage them to look creatively at co-operation and collaboration.

6.  IMPORTANCE OF ENTRY LEVEL JOBS

  6.1  Entry level jobs are an important stepping stone to higher level jobs for those who want to progress. Basic work skills such as timekeeping and reliability, social skills and interaction, assertiveness and customer service can be mastered. Recruitment consultancies often provide access to such jobs, either on a temporary or permanent basis and provide the necessary training for the job. The attached case histories illustrate this.

Recruitment & Employment Confederation

April 2000