According to the National Audit Office, sustainable employment refers to an individual who either remains in work, or is in a job that allows them to advance and earn more. Creating the conditions for this sort of employment offers significant challenges for both governments and employers. One of these challenges is accepting such a program as necessary rather than merely optional. It is a common view that in a contracting economy with high unemployment, ‘any job is better than no job’. However, studies of welfare to work schemes consistently point to the limitations of what has become known as the “Work First” (WF) approach. WF approaches are low paidin general, and trap people in poverty.Without sustainable job creation and development, there is a danger that large numbers of the unemployed displace low wage workers, which can lead to a decline in wages and ultimately affect those in work, particularly in low paying jobs.
Governments are in a good position to stimulate job creation. For example, they can match available jobs to jobseekers, and collect information about skills shortages and regional variations in unemployment rates. They can stimulate the demand side by offering incentives to SMEs (small and intermediate sized enterprises), as well as the supply side (by offering training programs for the unemployed).According to The Commission Communication entitled “Towards a Job Rich Recovery”, hiring subsidies can help to cushion the unemployment effects of economic crises, as this report states, “Creating the right kinds of incentives and hiring subsidies should motivate employers to engage in net new recruitment, thus creating jobs that would otherwise not be created”.Governments can also help coordinate action between various agents, such as public employment services, employers, training providers, andother relevant organisations.To illustrate this, we can look at the UK government, who recently launched the £1 billion Youth Contract, which incentivises employers to take on young apprentices, enables people to gain work experience, and gain interviews with the National Careers Service.
Companies and non-governmental organizations can help towards sustainable employment by offering training programs to jobseekers, in conjunction with governments at a national and supranational level. One of the ways of doing this is through the successful apprenticeship program. Take, for example, the European Alliance for Apprenticeships (EAfA). This organization brings together governments and other non-state actors such as business, social partners, VET (vocational, education and training) providers, and think tanks. For companies, the benefit of such a program at the EU level is a net return on their investment, either during the apprenticeship training program or afterwards when the fully trained worker is employed. Those who take part in VET schemes can at the same time gain valuable work experience in a professional environment, which increases their future employability chances. A case study in the success of apprenticeship programs is Germany, in which 60% of young people train as apprentices. The programme encapsulates what is known as ‘dual training’, in which they learn while also developing skills at the workplace. For employers, apprentices are an important talent pool, particularly for high-tech sectors of the economy in which analytic and problem-solving skills are in demand.
As we have seen, creating sustainable employment opportunities for the unemployed is vital to a healthy economy. Not only does it benefit the jobseeker who can gain more permanent work, but also the employer who can choose from a talent pool ofpeople trained for the required role. Programmes aimed at developing sustainable employment require the cooperation of many state and non-state actors. Legislation is also essential, both at the European level and at the national level. For example, under the EAfA, the Netherlands has made a commitment to organising enough work placements. Dutch policy is aimed at companies and the Vocational, Education, Training and the Labour Market (SSB) to provide more placement opportunities. Similar commitments have been made by other EU member states. With the prospects of a win-win for both employers and jobseekers, and the resulting benefit to the economy, such efforts are vital and should be applied to many areas of the market.
Adam Watson
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