Contrast:

The issue

Strategy development

The active involvement of private sector employers in employment strategy development and place shaping is the key to success in securing new jobs and investment and to sustaining renaissance in run-down communities.

But, the experience of regeneration programmes over the last 20 years has been that real and sustained employer engagement can be very difficult to achieve, especially in the most deprived neighbourhoods.

This lack of engagement has a number of causes, including:

• scepticism about the benefits to their business
• negative attitudes towards disadvantaged areas and the people who live there
• lack of awareness of the opportunities and benefits of getting involved
• a negative attitude towards partnerships and partner behaviour
• the lack of a mechanism to support their engagement

The critical strategic issues, which can be addressed through private sector employer engagement, are closely linked to the supply and the demand of the labour market. 

They are:

• Recruitment; a demand side issue
• Employability; a supply side issue

Engaging private sector employers is not only about strategy development though.

One of the key tools in effective strategy implementation is outcome planning and this is a key area where employers can get involved.

RecruitmentTop of page

There are two main reasons to engage private sector employers around recruitment:

• The way some private sector employers go about recruitment and selection to fill job vacancies can discriminate against unemployed people in general, and the longer term unemployed in particular. Informal recruitment and selection procedures can also give greater scope for negative attitudes about the unemployed and can lead to greater discrimination.
• The negative attitudes of some private sector employers towards the unemployed in general, and the longer term unemployed in particular, along with perceptions about the people who live in disadvantaged neighbourhoods can create serious barriers for those looking for work. These attitudes are then reflected in recruitment and selection procedures. Unemployed residents from disadvantaged neighbourhoods are therefore less likely to get work specifically because they are unemployed.

EmployabilityTop of page

While it is true that many people who are living in deprived neighbourhoods have been out of work for long periods of time, many private sector employers are reluctant to employ them because they believe that they lack ‘employability’.

Employability problems can arise from:

• Lack of basic and key skills
• Lack of confidence
• Lack of work experience
• Behavioural problems
• A record of offending

Policy contextTop of page

Effective private sector employer engagement needs to be built around activity which is already taking place. This includes the local consultation mechanisms for the local area agreement (LAA) and the local development framework.

They need to be involved in consultation and decision making around both recruitment and employability solutions, but also because they are customers and service users themselves.

This will involve local partners, but particularly the local strategic partnership (LSP), working closely with private sector employers to ensure their participation and sustained involvement.

Government has now made some changes to LAAs which mean all areas will need to have a new style agreement signed off by June 2008. The 2007 ‘Local Government and Public Involvement in Health Act’ made it law for local areas to produce an LAA and to involve citizens in this.

This is known as the 'duty to involve'. It also became law for certain organisations to help in putting together and delivering the LAA. This is called a 'duty to cooperate' and includes primary care trusts, fire and rescue services, Jobcentre Plus and the Learning and Skills Council. 

All of these, along with private and public sector employers, are key partners in strategies that combat worklessness and promote employment. In a number of local authority areas, including Salford, private sector employers are being consulted along with citizens about worklessness issues.

So, successful strategies to tackle worklessness require the engagement of private sector employers in:

• Both the development and the implementation of strategy
• Recruitment
• employability

Private sector employers need to be informed by a sound understanding of local issues and opportunities in the locality. While partners in the public and voluntary sectors need to have a solid understanding of local business needs, obstacles to investment and growth and the employability of the local workforce.

What are the causes?Top of page

Strategy development

There are a number of obstacles to engaging private sector employers in both strategy development and implementation in disadvantaged neighbourhoods.

These include individual and collective reluctance among employers to get involved which stems from:

• scepticism about benefits to their business of becoming involved
• doubts about the ‘business-like’ qualities of local partnerships and a fear of ‘getting sucked into bureaucracy’
• negative attitudes towards residents of disadvantaged areas and the areas themselves
• a lack of incentive to get involved, often occurring in ‘branch-plant’ or franchise operations where local managers are given little autonomy
• poor environment to do business, leading to a desire to move away from their present location because of high insurance costs, petty crime and vandalism, access or recruitment difficulties
• the cost of involvement - many smaller employers will have little time to consider getting involved

Some private sector employers may also simply be unaware of the opportunities and benefits to be gained by getting involved.

Local partners may not pay enough attention to promoting the business benefits of involvement, or not be very good at selling them.

The way local partners behave can also deter private sector employers from becoming engaged in localities where partners and partnerships:

• do not see employers as part of the solution to neighbourhood problems
• are preoccupied with processes rather than results
• have little understanding of how to get employers on board

Employers may also lack a mechanism to get them involved, or may not readily take advantage of opportunities to collaborate. This may stem from:

• inward looking perspectives and highly competitive behaviour
• a lack of awareness of the gains from collaborating with other employers and the public sector
• the lack of a strong local business organisation which can act as an agent of change and promote collaborative initiatives

Even where there are strong local business organisations, these may work through long-established, informal networks which may tend to exclude newer businesses and those led by people from ethnic minority backgrounds.

Recruitment

The impact of private sector employer recruitment and selection practices has particular implications for neighbourhoods with high levels of unemployment.

Problems arising from recruitment and selection practices can also be made worse by some employers’ attitudes to unemployment and the unemployed.

Particular problems come about where private sector employers discriminate by:

• Informal or word of mouth recruitment methods rely on those who are in work passing on information about jobs to relatives, friends and acquaintances and acting as informal recruiters for their employers. The long-term unemployed and people who live in areas of high unemployment and worklessness tend to have less contact with those in work
• There is sometime discrimination against applicants on the basis of their address or where they live. This is sometimes called red-lining or postcode discrimination.
• Not using formal job descriptions and person specifications means that employment is reliant on personal judgement on whether an individual meets the employer’s requirements.
  Around one half of all private sector employers use informal recruitment channels, including personal recommendations from existing employees. Informal recruitment is particularly common among smaller employers, who may often account for a large share of possible job opportunities in disadvantaged neighbourhoods.

Most private sector employers use a combination of informal methods alongside more formal methods such as advertising and job centres.

Informal recruitment practices and selection procedures can give greater scope for negative attitudes about the unemployed and the areas in which they live. Some private sector employers’ attitudes and views on the unemployed and unemployment can consciously or unconsciously lead them to discriminate against an applicant whom they know to be unemployed.

• There seem to be two broad views on unemployment and the unemployed:

Unemployed people are the least employable: those that end up unemployed are those with least to offer employers in terms of skills, experience, motivation or other attributes, and that is why they are unemployed.

Although people become unemployed for a variety of reasons, once unemployed their skills, experience and general employability deteriorate over time, so the length of time someone has been out of work becomes particularly important.

In practice, some employers may combine these views, although survey evidence suggests that the second of these views, that length of unemployment erodes employability over time, is the more dominant. There is evidence to support and reinforce both viewpoints. Unemployed people, particularly the long-term unemployed, do as a whole tend to have less skills and experience than those in employment.

They are more likely to have health problems and poor references or work histories, and a significant proportion are likely to be older people who employers are less inclined to recruit. There is also evidence that the relevance of skills and experience does deteriorate over time.

Problems arise, however, when private sector employers:

• assume that all unemployed people will suffer from the problems they associate with unemployment and unemployed people in general - they assume that any unemployed person will be less valuable as an employee than someone who is employed or has only been out of work a short time
• use the fact that someone is unemployed or has been out of work for some time as short-hand, implying that they must have problems which make them less attractive as a potential recruit
• assume that someone who is unemployed or has been out of work for some time will not be able to do the job in a satisfactory way
• use the fact that someone is unemployed to disbar them from the selection process without considering whether they might be worth recruiting or giving them the chance to prove this by offering them an interview

Employability

Employability is increasingly used to describe the ability of someone to get or to keep a job.

The term employability has been used to cover activities to tackle worklessness which have an impact on individuals themselves and which make them more employable.

The main problems which employability activities tackle include:

• Lack of basic skills
• Lack of key skills
• Lack of skills relevant to specific jobs and types of work
• Lack of confidence and poor social skills
• Lack of recent work experience
• Personal and behavioural problems including a history of mental illness or substance abuse
• A record of offending.

Residents of disadvantaged neighbourhoods may suffer from a number of these problems to some extent. This means that a package of actions will be needed in order to achieve a significant improvement in employability.

What’s been tried?Top of page

Employer engagement

Stoke-on-Trent Business Brokers

The Business Brokers project in Stoke on Trent began in May 2002 as part of the national programme, which is run by Business in the Community (BitC) in partnership with the British Chambers of Commerce.

It is based at, and managed by, the North Staffordshire Chamber of Commerce. Its local objectives are to:

• develop two-way communication between local employers and the public sector, including regeneration agencies
• help improve the performance of businesses in Stoke-on-Trent
• increase business support to the community and voluntary sectors

The Business Brokers project objectives are tied to the aims of Stoke-on-Trent’s LAA ‘block 4’ for economic development and the environment, which is to reduce poverty through enterprise and employment.

The four main LAA outcomes are designed to:

• raise levels of economic activity and household earnings to the national average
• increase the level of enterprise amongst local people
• support sustainable growth, and reduce the rate of failure, amongst businesses
• attract the appropriate inward investors into the city

Employers in the business broker network in Stoke-on-Trent are increasingly seeking

to develop and demonstrate their corporate social responsibility credentials.

They are waking up to the notion that social responsibility can improve their ‘bottom line’ by improving their approach to the recruitment and retention of staff.

The business case which is put to participating employers around the benefits of

engaging with the public sector in Stoke-on-Trent are summarised as:

• the ability to influence strategic and local decisions that will support business and enterprise development
• assistance with recruitment and staff development
• the ability to lobby others about employers wants, needs and expectations
• the opportunity to network in pursuit of new business opportunities
• the opportunity to develop good public relations with both the public and prospective employees
• increased brand recognition

All of these benefits are gained through working with the residents and communities of Stoke-on-Trent’s 14 priority neighbourhoods that display the highest rates of unemployment and worklessness. Stoke-on-Trent Business Brokers is also an IDeA case study.

Strategy developmentTop of page

Spotlight in Salford

In 2007, the local strategic partnership in Salford agreed to support a series of area-based pilot programmes to look at how they can provide public services that will give Salford's people the best possible prospects.

Each programme, called a Spotlight, focuses on a particular theme, such as worklessness or young people not in education, employment or training.

The Spotlight brings together key stakeholders in an area, including private sector employers to emphasise the importance of:

• 'getting under the skin' and understanding the root causes of the issue
• the effects on people's lives of the issue
• the way that organisations currently address the issue

These are addressed through thorough research and engagement. All of this is completed within six weeks and results in an improvement strategy.

One of the Spotlight pilots is looking at the issue of worklessness in East Salford. Asking about the opinions and experiences of all stakeholder groups is an essential part of the Spotlight process, but in the case of worklessness, it is key to involve private sector employers.

The process involves private sector employers in providing stakeholder information which is used to provide a rich analysis of the causes and effects of worklessness, together with an assessment of the strengths and weaknesses of the current public service delivery chain that deals with the issue.

This approach is attractive to private sector employers because it delivers:

• strategic action for the short, medium and longer term, which they have been involved in shaping
• regular high level ‘stock take’ sessions to keep the focus and momentum going after the end of the six week period
• activities that enable them to become involved in the latest public service transformation policy - for example, the ‘Comprehensive Spending Review CSR07’
• a highly action focused methodology, which has been designed to hammer out immediate improvements in service delivery.

The Spotlight methodology was adapted from a model used by the Prime Minister's Delivery Unit (PMDU). Like the PMDU's model, at the end of each Spotlight the organising team presents their findings and recommendations to a high level panel including the leader and chief executive of the council.

Part of the background to new LAAs is the government's drive for more efficiency and local authorities need to show that they are making the biggest possible impact.

The Spotlight pilots that have taken place with private sector employers’ involvement provide important lessons for doing this more effectively. Each of the improvement strategies for the localities involved in the pilots contributes towards the relevant LAA theme. Salford Spotlight is also an IDeA solving the problem document.

Recruitment

A number of measures have been tried to encourage employers to consider recruiting unemployed people. These include interventions that allow unemployed people the chance to show that they can do the job, and that encourage employers to change negative attitudes and beliefs. Particular actions include:

• Enhanced job matching: more intensive job matching, screening and vacancy filling, tailored to the needs of particular employers or a particular sector
• Recruitment and selection training: different forms of training and staff development for those involved in recruitment and selection, including equal opportunities training
• Alternative recruitment methods: work with employers to promote and develop alternative methods of assessment for recruitment and selection that are more appropriate to unemployed people
• Job interview guarantees: employers guarantee an interview or at least entry to the selection process, generally to people who have successfully completed a period of customised training
• Work trials: short periods of temporary work that bring unemployed people into contact with employers
• Work placements: longer periods of work experience, often coupled with on and/or off the job training. Employers are encouraged to offer jobs at the end of the work placement
• Wage subsidies: payments to employers who recruit unemployed people for a period of time.
• Subsidies can also be offered to meet the costs of training
• Local employment schemes: partnerships and agreements with employers to target recruitment at unemployed people from particular neighbourhoods, usually as part of a wider initiative such as a major development scheme.

These actions often form part of an overall package of measures, for example targeted recruitment on to customised training programmes, linked in turn to work placements or job interview guarantees.

One example of where close collaboration between the public sector and private sector employers has resulted in the recruitment of people from disadvantaged localities is the use of a local employment guarantee in the Seacroft area of Leeds.

The Seacroft Partnership in Leeds Top of page

Seacroft is a large council estate five miles from the centre of Leeds. The Seacroft Partnership provided guaranteed employment for those residents who successfully completing a customised training programme targeted on local unemployed people.

The Partnership members are TESCO, Leeds City Council, USDAW, Quarmby Construction, ASDA, the Employment Service and East Leeds Family Learning Centre. Candidates included those on New Deal and other groups, with particular emphasis on young people, single parents and over 50 year olds.

Three hundred and twenty of the store's 490 workers were recruited from within a three-quarter mile radius of Seacroft, 243 were previously unemployed and 147 were guaranteed jobs after their initial assessment. (There is a separate Local Employment Guarantees solving the problem document).

Employability

Skillsmatch in Tower Hamlets

The growing presence of city firms in Tower Hamlets around Canary Wharf, along with preparations for the Olympics and Paralympics in 2012, means that there are many job opportunities in the borough.

However, the specialist nature of many of the jobs on offer can be a barrier to local people accessing them. In addition, young people in the borough report that there are limited opportunities to for them to increase their skills and access the work experience that will make them attractive to employers.

Services aimed at helping people in the borough to access work are co-ordinated by Employment Solutions, a partnership between Jobcentre Plus, Tower Hamlets College, and the council.

At a strategic level, Employment Solutions has formed links with a range of local employers, large and small, for which it acts as broker, advisor and supplier of training and qualifications services.

The partnership provides support and co-ordination for a range of programmes designed to tackle specific employment and training issues, including those associated with NEETs.

Among the most important of the borough’s projects aimed at improving employability is the Skillsmatch programme, which offers a job-brokerage service for local residents and employers. Importantly Skillsmatch is employer-led.

The training which Skillsmatch provides is informed through close consultation with local firms, an understanding of the skills they need and the timescales to which they need to work.

The service for employers is comprehensive and is as sensitive to their needs as the programme is to the needs of job seekers. It includes hosting open days on behalf of local employers to raise their profile and to attract candidates and advertising for new employees where this is necessary.

By being committed to supporting local employers, Skillsmatch has been able to enlist their support for the programme in return.

Skillsmatch has a range of programmes to tackle employability issues across all age groups. All programmes include the following core elements;

• Advice, guidance and support through one to one interviews
• Screening and matching job seekers to employers’ requirements
• Tailored training to increase the competitiveness of local people in the workplace
• A focus on target groups who face specific barriers to employment
• Identifying and responding to barriers to employment faced by job seekers;
• Adapting the Welfare to Work agenda, helping tailor national programmes to meet local need
  The Skillsmatch team are also keen to assess the quality of the employment their clients go into and the longer term impact of its programmes. It found that for the year ended March 2007:
• 89 per cent of candidates were still in post after three months, and 84 per cent after six months
• 74 per cent of candidates achieved a starting salary of at least £12,000, 39 per cent over £16,000, and 10 per cent over £20,000.

Skillsmatch shows that engaging private sector employers in strategies and interventions to address worklessness really pays off. During the period April 2006 - March 2007 Skillsmatch helped 560 local residents into employment.

Of these 77 per cent were from black and minority ethnic backgrounds and 61 per cent were under the age of 25.

This has contributed to the percentage of young people in Tower Hamlets aged 16-18 not in education, employment or training falling from 12.3 per cent in 2005 to 8.2per cent in 2007. (Skillsmatch is also an IDeA case study).

ChecklistTop of page

Engaging employers from the private sector can really help to tackle worklessness. But there is some helpful advice, gained from experience, to bear in mind when engaging with employers.

Stoke on Trent Business Brokers have identified a number of barriers to overcome if successful private sector engagement is to be achieved in disadvantaged neighbourhoods and localities:

• Businesses do not always understand why they need to become involved with local communities.
• Businesses often face significant time constraints, particularly in the SME sector.
• Involvement with the public and voluntary/community sectors is often perceived as being bureaucratic and a frustrating process for businesses.
• There is a perception among some businesses that demands will be made of them to which they cannot respond, particularly in relation to financial contributions.

Stoke on Trent Business Brokers recommend that the private sector is best engaged where a number of best practice principles are met. These principles are most effective where:

• a common agenda can be established - concrete vision/ tangible benefits
• there is recognition of businesses’ desire to get things done and get results quickly
• a convincing case can be made so that engagement is seen to fit into a bigger picture and show greater potential impact
• there are agreed, clear objectives and intended outcomes - including a focus on making a difference to the area and to potential customers
• tasks are clear and agreed with specific timescales for delivery
• there are set boundaries to commitments - time-limited, exit routes
• there is a willingness to experiment, to taking risks and doing things differently
• there is a  mutual understanding, perhaps built up over time
• there is a clear recognition of what each party brings or could bring to the relationship
• there is understanding of how commitment and ownership can be developed and undermined
• there is trust
• partners deliver promptly on commitments
• high standards of performance are achieved
• communication is open

By regarding its work as one of job brokerage for employers, rather than focusing solely on the problems of unemployed people Skillsmatch has been able to help local employers fill their skills gap and so generate on-going commitment to the programme.

Where you are experiencing problems with employer engagement try consulting with local employers to design programmes that address their needs

It is also worthwhile remembering to be absolutely clear about why you are seeking employer involvement.

• What benefits do you want to derive from involving employers?
• What do local employers want?
• What do you have to offer?

Link with what other partners are doing around engaging employers, know what services they provide, the consultations they plan and undertake.

Conduct some thorough research into

• the ways in which employers are already involved
• why are they involved, what interests them, what the key issues are
• why other employers are not involved
• what the barriers to involvement are.

Build a common agenda:

• Do employers share your views on needs and priorities?
• Do you know what their ideas and perceptions are?
• Are there attitudes and behaviour which need to be challenged?
• How might you go about influencing employers?

Make the ‘business case’ for private sector involvement and make it sharp.

Use solid, commercial evidence to demonstrate the benefits of engagement.

• Devote time and energy to brokering opportunities to match employer and community interests.
• Develop opportunities which are concrete, not vague, and have measurable outcomes.

Ensure early results and publicise them more widely amongst all employers in the area.

Build commitment and ownership through employer-led activities.

Make sure that all contributions are recognised and appreciated.

Support employers to organise themselves, through local forums and networks and by contributing to the LSP.

Promote a ‘can do’, employer-friendly philosophy amongst local partners respond positively and promptly to employers’ concerns.

Help employers to understand difficult community issues and how to work together to find solutions.

Provide opportunities to get to know each other and develop mutual understanding.

Make it easy for everyone to get involved, steer clear of jargon and complex agendas.

More informationTop of page

Reading

Getting employers involved in area regeneration. Joseph Rowntree Foundation, 2002: 

Supermarket Forces. Regeneration and Renewal 

An Evaluation of the Stoke-on-Trent Business Brokers Project.

Websites

The Centre for Economic and Social Inclusion provides information and advice on welfare to work

Business in the Community

The Partnership Academy provides networking, training and support to all those involved in building better partnerships 

Five Vital Lessons: Successful Partnership with Business