But what if there aren’t any jobs for people to take?

Managing Director of Serco Welfare to Work, Richard Johnson, warns against the common misconception that there are currently no jobs out there and advises welfare to work service providers on how to be interventional and effective, despite the current economic conditions.

How can you have a swing towards outcome-based funding of welfare-to-work services when there is simply no work for people to do? Surely there is a fixed level of opportunity in the labour market and if this is squeezed by a contracting economy, at the same time that the dole queue is lengthened by public sector cuts, then there just won’t be any outcomes to get? How can the Work Programme possibly succeed when there are no jobs out there?

This view is based on a dangerous set of misconceptions. 

The challenges that are faced by individuals who find themselves trapped in unemployment are never to be underestimated. The personal price of worklessness is significant, with dreadful impacts for families and their children, for communities and wider society. The obvious fiscal costs are easy to count, in increased benefit payments and reduced taxes. Cast your perspective slightly wider and you might also count the costs of poor health, of educational under attainment, of excluded communities requiring more policing, and so on.

We also, of course, operate within a varying macroeconmic context. However, whilst recognising these personal and social costs of long-term unemployment, it is important that we reject the very limited view of the labour market which suggests there are no jobs and therefore no hope. This view fails to grasp that the relationship between the supply of labour (the jobseekers) and the demand for it (the vacancies) is a dynamic relationship.

To suggest that the jobs available are capped in some way is to fall into the trap of the ‘lump of labour fallacy’. This economic misunderstanding is behind some of our newspapers’ more alarmist headlines about immigration, when they suggest that someone from over there is coming over here and stealing our jobs. In fact, periods of immigration are often followed by periods of increased economic prosperity, because the immigration has brought activity and a supply of motivated labour, which has in turn stimulated demand.

This is what effective interventional welfare-to-work services do. They target supply-side investments to ensure the jobseekers have the right skills; they rebuild confidence, self-esteem and motivation; and they can remove practical blockers such as paying for the tools that are needed. When they are being really clever, they might also continue to develop someone’s skills once in work so that the new employee progresses (leaving an opportunity behind for another jobseeker); they work with employers to anticipate their skills/resource needs; they bridge the gap with skills provision to address vocational need; they integrate psychological and physiological expertise with pre-employment support; and they set up and even deliver associated services such as childcare or community transport. In effect, they create and enable ‘entrepreneurial jobseekers’.

The most successful mainstream welfare-to-work contracts of the last decade, targeting long-term unemployment, were the Employment Zones. These were established in areas with a history of intransigent worklessness and they roughly doubled the number of people over the age of twenty five securing and sustaining work in these locations. Significantly, they did this without displacing other outcomes – i.e. other employment programmes in the same areas (notably New Deal for Young People) continued to perform at the same level. They also did it by largely using ‘hidden vacancies’ – up to 80% of the jobs they secured never having been advertised. The Employment Zones created new opportunities through empowerment of the people looking for work.

Jobseekers are not simply passive players waiting for the right job to land in their lap. The challenge of welfare-to-work provision is actually about breaking passive self-perceptions and enabling active jobseekers to emerge from within unemployment. This is not a safety net, catching and holding people in a static condition. This is a welfare-to-work trampoline, to bounce people back into employment and wellbeing. And millions of people will be relying in the coming years on the timely, professional, effective deployment of such labour market interventions.