Policy briefing: Job guarantee and rotation – a way towards an inclusive labour market?

Job guarantee and rotation: a way towards an inclusive labour market?
A policy briefing by Professor David Etherington, Staffordshire University and Elizabeth Taylor, Employment Related Services Association (July 2022)

There is a view that ‘official’ unemployment rates mask a substantial hidden unemployment according to researchers from Sheffield Hallam University. They argue that the substantial increase in economically inactive and those claiming long term health benefits should be viewed as comprising a rising number of long term unemployed.[1] A large proportion of this cohort, with the appropriate health, training, and childcare support, could be able to access available jobs.

There are therefore calls for a back-to-work strategy involving a Job Guarantee for young people and the long-term unemployed which also involves pathways to vocational training.[2] Job Rotation (JR) can play a crucial role in such a strategy, linking a range of tried and tested employability support (including pre-employment training and coaching), lifelong learning and in-work support. Evaluations show a high rate of job retention – around 75% of unemployed JR participants gain permanent jobs.[3] More important the model plays a crucial role in upskilling the economy.

With the phasing out of the Job Retention Scheme and the Kickstart programme, this is a particularly opportune time to be thinking about Job Rotation. Is it an idea whose time has come?

What is Job Rotation?

The model enables employees to be released from work to undertake study, by replacing them with substitutes who have been unemployed. Through this model, those otherwise excluded from the workforce, are given a unique opportunity for paid work experience and vocational training. Employers benefit because production continues while staff are freed up to develop their skills. This model has been mainstreamed in some European countries, and successfully piloted in Scotland. An essential ingredient of the JR model is the role of social dialogue and the bringing together of relevant labour market partners, including trade unions and worker representatives.

There is a resurgence of JR initiatives in Denmark[4] promoted by the Government, trade unions and Danish local government association (KL). There have also been small-scale initiatives in the UK.[5]

How does JR work?

The JR process is based on a seamless rotation model comprised of:

  • Identifying the training needs of low-skilled workers in a participating organisation. Unemployed ‘substitutes’ can free up workers for training without the organisation losing production/service delivery. This involves a team made up of employers, employment and skills services and workers/unemployed representatives -usually the trade unions.
  • Unemployed individuals are targeted to apply for JR jobs. Unemployment benefits are topped up so they work for the agreed rate for the job, usually at the Living Wage.
  • Unemployed individuals receive pre-employment and in-work mentoring (this could be performed by Work Coaches in Jobcentres or provider caseworkers), as well as access to vocational courses.
  • Workers in participant organisations can access apprenticeships and Apprenticeship Levy.

How could it be funded?

There is no hard and fast prescribed model but it generally involves:

  • Budget for a wage subsidy (benefit with top-up to make up to the Living Wage for unemployed substitutes) which can involve some matching fund by employers
  • Budget for pre-employment mentoring and training
  • Budget for in-work training for unemployed substitutes
  • Budget for vocational training for existing employees

This could involve packaging funds from a range of sources (e.g. employment programmes, Universal Credit, the Apprenticeship Levy and LEP-matched funds).

What are the benefits of Job Rotation?

(1) JR meets three separate but inter-related needs of local economies: tackling unemployment, addressing skills shortages, encouraging business development through staff training and learning and the promotion of Lifelong Learning.

 (2) JR helps disadvantaged labour market groups by providing a period of paid work placement, along with the opportunity to improve their vocational skills and qualifications.

(3) Employers reap the benefits of enhanced training for existing employees, and the enhanced capabilities of future employees, improving their retention, reducing turnover and saving costs to their business.

We know that it’s difficult to engage employers/businesses in programmes, largely due to the number and complexity of programmes[6]. The JR model is effective and efficient in reaching its target groups and reduces the potential for programme duplication and employers being approached by multiple providers.[7]

A number of smaller businesses could be connected to secure volume in the JR activity, allowing the development of bespoke courses for employees from the different companies. This is already a tried and tested approach in the employability sector that improves employer engagement. For example, in Health and Social Care, JR could provide career routes for low-skilled workers without loss of staffing cover for essential services.

There is scope for Combined Authorities and City Regions to pilot and test this model in local and regional labour markets in the UK, with potential for scalability. JR provides opportunities for unemployed people and upskills existing employees. It can be applied in both public and private sectors and could be particularly useful for sectors or businesses who struggle to recruit and could be a solution to the UK’s long-lamented under-skilled labour market.

[1] Beatty C and Fothergill S (2022) The Real Level of Unemployment 2022: The Myth of Full Employment across Britain, Sheffield, Sheffield Hallam University

[2] https://learningandwork.org.uk/news-and-policy/act-now-to-tackle-record-rise-in-unemployment-and-prevent-long-term-damage/

https://cdn.ymaws.com/www.myiep.uk/resource/resmgr/docs/employment_response_to_coron.pdf

https://www.tuc.org.uk/research-analysis/reports/new-plan-jobs-why-we-need-new-jobs-guarantee

[3] Kruhøffer J (2007) Job Rotation in Europe as the Feasibility environment for the Jobrotation e-Service, Berlin AOF

[4] https://www.eurofound.europa.eu/observatories/emcc/erm/support-instrument/ob-rotation

[5] Etherington D (2008) A strategy for an inclusive labour market, Feasibility Study for a Job Rotation Pilot for Incapacity Benefit Claimants in Ealing, Report to Ealing Primary Care NHS Mental Health Trust, London, Middlesex University

[6] https://business.leeds.ac.uk/downloads/download/91/ceric_-_employer_engagement_in_active_labour_market_programmes_in_the_uk_and_denmark_final_report

[7] https://cdn.ymaws.com/www.myiep.uk/resource/resmgr/docs/iep_journal_issue_1_-_june_2.pdf

Thought Leadership: Way to Work – why ‘half a million get jobs in under six months’ is either woefully poor, meaningless or plain wrong… a story in six charts!

Original twitter thread by Tony Wilson, Director, IES here in response to government’s press release ‘Half a million benefit claimants get jobs in under 6 months’. See also Elizabeth Taylor’s response in January Way to Work: “Any job now” is no solution to UK labour crisis. 

‘Way to Work’ – why ‘half a million get jobs in under six months’ is either woefully poor, meaningless or plain wrong… a story in six charts!

Lessons include: flows are huge, especially now; and we need more transparent data/ better targets

  • First, this shows why 500k finding work every six months really isn’t special. Here’s *known* exits to work from Jobseeker’s Allowance (which Universal Credit replaced), over rolling six month periods 1998-2015. Barely ever below 500k, and always a lot higher after recessions.
  • Importantly though, above graph under-estimates flows into work, as loads of people weren’t followed up and so were ‘failed to sign’ or ‘not known’ (left below). Including these would give implausibly large figures (right below), so the truth will be somewhere in between. Luckily…

  • DWP did research in 2011 to understand these discrepancies gov.uk/government/pub and estimated that 68% of off-flows went into work. And if you apply that percentage to total off-flows, you get this – i.e. never below 500k, and often substantially above.
  • The above charts all stop at 2015 because: 1. UC had started to roll out and 2. JSA volumes were falling fast And the numbers overall really matter, as 500k is a volume target. 500k when there’s lots on UC/ JSA is far less ambitious than 500k when there aren’t. To illustrate…

  • This shows the *proportion* of JSA claimants known to have moved into work every month. Typically 8-10% and often higher (and this will be an under-estimate). ‘Way to Work’, by comparison, assumed just 5% of ‘Searching for Work’ group would find work each month (i.e. 83k of 1.6m)
  • So lots of graphs but what are the lessons? 1. Flows are probably higher than people realise, and especially high now 2. 500k wasn’t really explained at the time, and very unambitious as a ‘flows’ target 3. We need better data on flows, incl the data behind the press release 4. And we need to be honest that the *additional* impact of employment support is far smaller than big headlines like this. So we need to communicate better, evaluate programmes properly, celebrate those small differences and try to improve them. Final point is that…
  • t’s well possible that DWP’s 500k estimate is wrong! H/T @Stephen_EvansUK, who shows that off-flows from ‘Searching for Work were well over 2 MILLION – so either 500k to work is implausibly low, or off-flows to other destinations are implausibly high.