EXECUTIVE SUMMARY

  1.  The majority of employers operate in highly competitive markets and consequently their employees need to make an immediate contribution. Therefore, in the case of the long-term unemployed, those with transferable skills stand a far higher chance of re-entering the labour market.

  2.  For permanent positions, employers invariably require formal qualifications or a minimum amount of experience that suggests the person can perform the job. Where this ability cannot be demonstrated, employers will often offer the person a temporary position through which he/she can develop the required skills that will lead to higher productivity and permanent work.

  3.  Employers are more willing to consider people who have been out of the labour market for an extensive period of time if they have what is perceived to be a legitimate reason for being economically inactive. This normally, although not exclusively, favours women who may be returning to work after raising a family or caring for a relative.

  4.  Blue Arrow plays an important role in placing the unemployed into work. For example, through Aptitude, Blue Arrow's bespoke training system, we can equip candidates with keyboard skills and a good working knowledge of the latest software packages. We also work with candidates to develop their communication and interviewing skills. However, our ability to place candidates is also dependent upon their employability. They need to be numerate, literate and most importantly have the desire to work.

  5.  At a local level, Blue Arrow has a good working relationship with the Employment Service which result in a significant number of Job Centres clients finding work through our branch network. We provide job Centres with regular breakdowns of fill rates and the types of jobs in which candidates are being placed. In addition, we are also required to notify the Centres with details of those people who fail to turn up for interviews or to assignments.

  6.  The longer a person has been out of work the more difficult he/she becomes to place. In the case of private recruitment agencies, which operate under the same constraints as other commercial organisations, it can be argued that the investment necessary to find that person work may not always justify the return. For this reason, the ES or another Government agency will probably continue to play a significant role in placing the long-term unemployed back into work.

  7.  In today's labour market, the difficulties of placing the long-term unemployed are acute. In view of this, consideration should be given to creating "virtual workplaces", along the lines of Blue Arrow's Livingston pilot, where people are not only taught vocational and communication skills, but also learn about the social value of work. Building the self-esteem and confidence of the long-term unemployed should be key criteria of all training, job matching and placement initiatives.

INTRODUCTION

  Although the number of people who have been unemployed for more than 12 months has fallen by 30,000 over the past year, there are marked differences by age and between men and women. Among young people aged 18 to 25 there has been a large fall (14 per cent) in long-term unemployment among men, but an increase among women, although the numbers are small. Among those aged between 25 and 49 there has been no change in long-term unemployment among men, but a large fall among women, The greatest fall has been for women over 50 (an 18 per cent reduction in long-term unemployment) with a relatively modest (four per cent) fall for men in the same age group.

  Recent trends suggest that for young men, the combination of help from the New Deal and a strong labour market has led to much better job prospects for those whose position was the most disadvantaged. Among older age groups, women have been the main beneficiaries of improvements in the labour market, with little progress in the position of long-term unemployed men. The emphasis in the Budget on support for the older long-term unemployed reflects these trends.

RESPONSE

  In responding to the Select Committee's inquiry "Recruiting the Unemployed" we draw on our experience as a national agency operating out of over 250 locations in England, Scotland and Wales. While working in different parts of the country, the issues our managers and consultants face when placing the unemployed are similar.

  In the case of placing the long-term unemployed into work, there are a number of factors that influence the outcome. These revolve around the length of unemployment, the reasons for being out of work, skill levels, loss of benefits and, perhaps most importantly, the attitude and confidence of the workseeker.

  Throughout the country, we are aware that clients looking to fill permanent positions become concerned when people have been unemployed for more than a year. Often their belief is that in the current tight labour market, where there are 340,000 unfilled vacancies, work of some kind is available to the vast majority of people. So those who are not working may lack the necessary motivation and commitment to hold down a job. In addition, some hirers feel that the pace of change in the workplace is now so swift that a person who has been unemployed for a significant length of time will have lost the ability to keep up.

  However, clients are more willing to consider people who have been out of the labour market for an extensive period of time if they have what is perceived to be a legitimate reason for being economically inactive. This normally, although not exclusively, favours women who may be returning to work after raising a family or caring for a relative. Indeed, some clients specifically express a preference for female returnees, believing they are more stable and more likely to be loyal to the company. Anecdotal evidence suggests that Blue Arrow's female candidates do show greater loyalty than their male counterparts to the company through which they rejoined the labour market.

  In those instances where the reason for a long lay-off from work is less obvious, employers will invariably favour people for permanent positions who can demonstrate that they have used the time to improve their skill sets. For example, through taking an NVQ or another accredited training course. Even in cases where self-improvement cannot be demonstrated, a candidate, can still re-enter the workforce if they interview well.

  Employers are risk averse and strive to minimise the significant costs associated with making the wrong hiring decision. In view of this, temporary work offers many returnees to the labour market the best route back into a permanent position. Temporary work allows people to experience a variety of working environments, develop their skill levels and establish a track record of employment. Many of the temporaries placed by Blue Arrow move into permanent positions either with the companies they are assigned to or with other organisations seeking to fill vacancies.

  Unfortunately, after an extended lay off many candidates' self-esteem has dropped and they become less sure of what a potential employer expects from them. To find ways of combating this, Blue Arrow ran a two year pilot scheme in Livingston from 1997 to 1999 which involved the creation of a virtual warehouse to act as a training centre. Candidates, many of who were referred by the local Job Centre, received training not only in presentation and communication skills but also on how to perform in the work environment. The areas covered included:

—  Familiarisation in warehouse/distribution centre environment

—  Accuracy

—  Competency

—  Health & Safety

—  Manual Handling

  Success in placing those people who passed through the programme was extremely high and there were a number of clients during the life of the pilot who insisted that all candidates supplied to them by Blue Arrow had to pass through the training programme. In view of the pilot's success, we are considering establishing similar schemes on a more permanent basis.

  In general, it is easier to place a person who has been unemployed for a significant period of time in a manual or catering position. This is because the skill requirements can more easily be acquired before or during the assignment. Placing the long-term unemployed in the office sector is more challenging as, unless they have sufficient numeracy, literacy and technology skills, it is difficult, even with in-house training, to bring them up to the level of proficiency required by employers.

EMPLOYMENT SERVICE

  Although Blue Arrow has no national agreement with the Employment Service, we have a number of strong relationships with the organisation at a local level through its Job Centres. The depth of these relationships very much depends on our branch managers and the effort they are willing to spend in developing them.

  In the North East, we work closely with a number of Job Centres who refer candidates for temporary and some permanent positions mainly in the production and technical sectors. These working partnerships are built around regular planning meetings and the exchange of management information. Naturally, of particular interest to the Job Centres is information on the percentage of referrals where a positive outcome is secured.

  In general, there is no specific agreement with Job Centres to focus attention on the long-term unemployed, so those put forward for vacancies are of diverse age and experience. In the North East, the majority of industrial positions we are asked to fill are temporary. However, temporary assignments can often lead to permanent appointments. For example, in the case of one of our larger clients approximately 80 per cent of their permanent workforce was originally placed on a temporary basis.

  South Wales is another area where Blue Arrow has entered into a successful relationship with the ES. Since a local Job Centre founded its Job Club two months ago, Blue Arrow has notified it of all the branch's temporary and permanent vacancies. As a result approximately 25 per cent of vacancies are now being filled by Job Centre referrals. However, the nature of the initiative means that the candidate is asked to contact Blue Arrow to arrange an interview and this may deter unemployed people with low confidence levels from taking part in the scheme.

  It seems that the state of regional labour markets has a bearing on the relationship between recruitment agencies and Job Centres. For example, in areas where the labour market is tight, such as the South East, agencies have been known to use Job Centres purely as additional billboard sites through which they can advertise vacancies. The nature of the labour market means that there is little incentive to build a lasting relationship with the Job Centres as their candidate pool is extremely limited.

BARRIERS TO LABOUR MARKET ENTRY

  Blue Arrow's experience suggests that once a person has been out of work for more than a year it becomes much harder to place them in a permanent assignment. However, there are normally a range of opportunities for them to perform temporary work which will provide them with a regular income stream and, if desired, a springboard into permanent employment.

  While Blue Arrow has had significant success in placing the long-term unemployed into temporary work, a number of those people we see are reluctant to accept temporary assignments as they believe that the wages they will earn will not make up for the resulting loss in benefits.

  In cases where appointments are arranged, a proportionately higher percentage of our candidates drawn from the long-term unemployed, fail to show up for interview. Unfortunately, the motives for these "no shows" are not all attributable to last minute nerves or domestic problems. In those cases where the person who fails to attend an interview has been referred, we notify the relevant Job Centre of their absence.

CONCLUSION

  The long-term unemployed are not a homogenous group. No one solution will adequately address the issue of getting them back into work. The reasons for unemployment are many but may include living in an unemployment black spot, loss of confidence, lack of skills, low educational attainment and lack of interest.

  From Blue Arrow's perspective, the key attribute we require to allow us to successfully place an unemployed person, is a real desire on their behalf to rejoin the workplace. In the majority of cases where this desire exists, we would be confident of securing a positive outcome. However, in some circumstances, the individual's lack of vocational or academic attainment makes it virtually impossible to place them.

  Our concern is that the longer people remain outside the labour market, the more their confidence suffers and the greater their reluctance to put themselves forward for fear of rejection. Unless their specific problems are addressed, these people will be caught in a downward spiral and could face a lifetime of unemployment. Providing job opportunities is not enough. People who have lost contact with the labour market need to be re-educated and managed back into the workforce. The levels of support required will be intensive and probably extend beyond what is currently available through the New Deal.

  Even in cases where people do want to work, the benefits' system can still act as a barrier to them accepting certain types of employment, in particular temporary work. We recognise the tax and benefits system has already been altered to make employment more attractive. However, we would urge this process to continue to ensure that no offer of employment, no matter for how short a period, is rejected on the basis that it will reduce the candidate's standard of living and future entitlement to benefits.

Blue Arrow Personnel Services

April 2000