Welfare reforms are just the job

With the government seemingly warming to the idea of the private sector using its expertiseb to help get the long-term unemployed back to work, Colin Cottell looks into whether this change of approach would benefit the industry or turn out to be a hindrance

Last month's proposals by work and pensions secretary James Purnell to open up welfare delivery to the private sector offers recruiters the possibility of massive opportunities to help the UK's jobless into work.

Purnell suggested that the private sector had an important role to play in putting forward ideas on welfare provision. This would be a huge departure from the usual process in which the government decides what it wants, and companies then bid for the contracts.

Purnell's ideas could be included in a proposed Green Paper on welfare reform.

With 1.6m people currently claiming unemployment benefit, an additional 2.6m receiving incapacity benefit and many economists predicting an economic recession is on the way, there could be plenty of scope for those recruiters prepared to take up the challenge. But should recruiters be excited?

At the moment, Jobcentre Plus, with its national network of offices, is by far the biggest player in getting the UK's long-term jobless into work. Traditionally, many recruiters have been reluctant to target this group, taking the view that many of the long-term unemployed are not 'job ready' and that to get them into jobs would take far more time, effort and money than that required to place those either in work or just out of work.

However, the lines between state intervention and the private sector are already blurred, with a number of recruiters holding government contracts to help the long-term unemployed through discrete divisions within their companies.

For example, Randstad Inhouse Services has signed a national Local Employment Partnership agreement with Jobcentre Plus to help 'priority groups' such as people with disabilities and lone parents into jobs (see news story on p6).

Chris Melvin, managing director of Reed in Partnership, which has placed 80,000 of the long-term unemployed into work in the past 10 years, welcomed Purnell's ideas.

Melvin told Recruiter the proposals represented "an opportunity for recruiters to look at where there is a gap in provision or provision that isn't doing as well as it should".

And he predicted that under a so-called "right to bid", which would replace the normal tendering process, there would be "an avalanche of proposals".

He said that Reed in Partnership was looking to put forward a number of ideas, which would help the long-term unemployed get back to work "quicker and more cost effectively for tax payers".

One possible idea was targeting groups who "are not doing as well in the jobs market as others".

Melvin said that Reed in Partnership had been successful because it had "the time and the resources to dedicate to those individuals. These people take a much longer time and are much more resource intensive". This can involve cognitive therapy and group training, he added.

However, given the extra effort and resources required to get the long-term jobless into jobs, there are serious question marks over whether many recruiters are geared up for this role.

Catherine Johnstone, a partner at London-based, office-commercial recruiter Catherine Johnstone Recruitment, told Recruiter that the proposals didn't appeal and were better suited to larger rather than smaller agencies.

"Somebody will make money out of this somewhere, but it wouldn't appeal to someone like myself."

She added that one of the main obstacles to getting the unemployed into work was the benefits system. This discouraged the jobless to take temporary jobs because of the difficulty of getting back onto benefits after an assignment had ended.

Melvin suggested that if the recruitment industry as a whole wanted to take advantage of the opportunities it would need to alter its approach. "The methodologies of some of the big recruitment players aren't easy for the unemployed to access." However, he added: "There's certainly a lot the recruitment industry can bring to the table."

Jeremy McGrail, managing director at Extra Personnel, said he welcomed any new ideas that might help the unemployed into work. However, he wasn't sure if getting involved would fit into the company's current business model.

However, he added: "As a business, we have the infrastructure, like any business of our size, where we can help. It depends on whether it is some sort of consortium to launch a joint bid. We would add value to that."

Clive Mitchell, head of employer partnerships at Jobcentre Plus, suggested that rather than recruiters putting forward ideas alone, a partnership between the public and private sectors might be the way forward. "It's about working with local partners. It's about synergy," he said.

However, there are concerns that unless the government changes the way companies are paid, Purnell's ideas are a non-starter. Purnell has suggested that companies would be paid out of the money saved on welfare payments when a person finds a job. However, this has faced resistance from the Treasury.

Melvin has other concerns. "I don't get the sense there is any new money in this," he says. "It's about making things better and more efficient, and this means priority from one area to another. Those decisions are difficult to make, and it will take a degree of bravery to push this through.

While recruiters could well benefit from opening up the delivery of the welfare system, it will take a change of approach by the average recruiter if the recruitment industry is to benefit. At least initially those best able to take up the challenge are likely to be the small number of recruiters who are already working in this as yet rather specialised field.

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