Press Story

79% of UK employers surveyed think work experience and job placements are an effective or very effective response to long-term unemployment, while over a third (38%) of UK employers who did not recruit from among the long-term unemployed highlighted their lack of recent work experience as being the reason, according to a new report published today by IPPR.

The report highlights a mismatch between employment policies in place in the UK and employers' views on the policies needed to get long-term unemployed people into work. While 67% of UK employers surveyed did recruit from among the long-term unemployed, only 13% of those did so because of government policy.

The report is part of a programme of research supported by the global JPMorgan Chase New Skills at Work initiative. It draws on a survey of 2,500 employers across five European countries – the UK, Sweden, Spain, Germany and France – on long-term unemployment and government employment services.

The survey showed that:

Almost two thirds of employers surveyed in the UK (65%) hadn't had any contact with Job Centre Plus
Marginally more employers surveyed in the UK thought Job Centre Plus was effective (42%) than not (40%)

The report also shows that 37% of employers surveyed in the five countries found the long-term unemployed to be well prepared or very well prepared for work, compared to only 13% who did not. But the survey also found that 75% of employers were able to name one or more skills or characteristics they felt to be lacking in long-term unemployed candidates (including numeracy, literacy and IT skills)

The survey shows that UK employers' priority is skills development (through work placements and training), but the report also shows that in the UK the bulk of spending on employment support is spent on public employment services (e.g. Job Centre Plus) and administration (80%), with only 5% spent on training, and 2% on employment incentives. Further to this, while 72% of the UK employers surveyed stated that formal qualifications and courses are effective at making candidates more employable, only 17% of UK employers have received training subsidies/grants from employment support services.

The report found that while many UK employers surveyed had experienced the benefits of government employment policy in terms of incentives or support to recruit long-term unemployed candidates, this was lower in the UK than other countries surveyed:

Most European employers surveyed (63%) had received at least one of the incentives listed (such as wage subsidies, tax incentives and work experience schemes) to take on candidates who were long-term unemployed – this was highest in France (69%) but lowest in the UK (53%).
Wage subsidies and grants were the most commonly cited incentive received by European employers to recruit long-term unemployed candidates. However, there were differences between countries – for example in the UK work experience placements were most common (although only 22% of employers surveyed had experience of this), while in Spain it was tax incentives (also at 22%), and in Sweden 36% of employers surveyed had been in receipt of wage subsidies.

Luke Raikes, IPPR Research Fellow, said:

"Employment support should be making potential employees more employable, and so it is essential to take employers' views and experiences into account. With problems of persistent long-term unemployment in the UK and across Europe, and skills shortages reported by employers, there is both an economic and a social case for better alignment between what is offered by governments and what employers find useful.

"The UK employers we surveyed were broadly positive about hiring people who've been unemployed for a long time - the majority of those we surveyed did recruit from this group. However, these employers also seem to suggest that policies directed at helping the long-term unemployed back into work are not as effective as they could be, and that the long-term unemployed are not receiving the right kind of support.

"This research suggests that the focus of government policy should shift towards providing skills development for the long-term unemployed through work experience and formal qualifications, as opposed to financial incentives for employers or benefit sanctions for job seekers - which employers don't think is as effective."

Further European comparison in the survey showed that:

Employers' previous experience of hiring the long-term unemployed was rarely given as a reason for not recruiting them again (9%), although in Germany this was higher (16%) than in France (5%)
Spanish employers were the most positive about the long-term unemployed, with 54% of those surveyed believing the group to be well-prepared for work, while in Germany it was only 30%
In Germany 50% of employers said they recruited from the long-term unemployed, while in Spain 74% of employers said the same.
Across all five countries employers surveyed had a fairly negative view of public employment services – employers regarded it worst in Sweden (net -45% effective) and best in the UK (net +2% effective).
Government policy for dealing with the long-term unemployed was not well thought of by employers surveyed in any of the five countries – with only 34%saying it was effective compared to 58% saying it was ineffective; with Sweden and Spain regarded worst (-34% net effectiveness) and the UK regarded best (-2% net effectiveness).

Notes to editors

The new report – European employers' perspectives on long-term unemployment recruitment and public employment services – will be available from Monday 4th May http://www.ippr.org/publications/european-employers-perspectives-on-long-term-unemployment-recruitment-and-pes

The definition of long-term unemployed in this report means 6 months or more, consecutively.

The JPMorgan Chase New Skills at Work programme in Europe is a three-year, $30 million initiative which aims to identify strategies and support solutions that help improve labour market infrastructure and develop the skilled workforce globally. The initiative brings together leading policymakers, academics, business leaders, educators, training providers and nonprofits with the goal of connecting labour market policy with practice, supply with demand and employers with the workforce – all to strengthen the global economy. The overall programme is a five-year $250million initiative, the largest-ever private-sector effort aimed at addressing the "skills gap" that exists across many industries globally.

Populus conducted online surveys with 2,552 employers who are fully or partly responsible for recruitment in their organisation. Interviews were conducted across the UK, France, Germany, Spain and Sweden between 28^th November – 10^th December 2014. Populus is a founder member of the British Polling Council and abides by its rules. For further information contact: www.populus.co.uk

Contacts

Sofie Jenkinson, 07981 023 031, s.jenkinson@ippr.org

Danny Wright, 07887 422789, d.wright@ippr.org