Specialist welfare-to-work firms could soon be providing employers with HR services for long-term unemployed people they place in jobs, according to a key government adviser.
David Freud, whose report kick-started the radical welfare reforms set out by the government last week, said providers could now be more innovative, possibly providing HR services to small and medium-sized businesses.
“If you need 10 workers to load lorries, a provider may offer you 10 trained people and offer to handle the HR for you,” Freud told Personnel Today. “So you do not have to worry about waking them up if they oversleep or dealing with someone having a mental breakdown. Someone will think up a clever scheme like that.”
Work and pensions secretary James Purnell confirmed that private and voluntary sector specialists will be freed from current rules on how they find work for the long-term unemployed. They will earn payments when people have been in jobs for set periods, providing a huge incentive to help firms retain staff.
Rob Murdoch, executive director at private welfare-to-work firm A4e, said: “We’ve been working for quite some time to get into a position where experts are given this freedom. This system will allow us to invest and innovate and there will be a massive effect for employers.”
The Chartered Institute of Personnel and Development (CIPD) said employers would welcome HR help with getting people back in the labour market after a lengthy lay-off.
CIPD skills adviser John McGurk said: “Small and medium-sized enterprises without dedicated HR functions would be glad to have support as they would not want the responsibility for dealing with the multitude of problems long-term unemployed people can have.”
How will the new welfare system work?
- Specialist private and voluntary sector organisations can bid for about £1bn-worth of state contracts to find jobs for people who have been out of work for 12 months or more.
- They will receive five- or seven-year contracts, allowing time to invest in their own ways of working.
- The government will set a bare minimum of rules to be followed.
- Firms will be paid initially for finding people work and again when that person has completed six months in a job. Eventually this may be after up to 18 months.