Government Social Research
This report was commissioned by the Cabinet Office Prime Minister's Strategy Unit to feed into the design phase of the Employment, Retention and Advancement (ERA) demonstration design project.
The Institute for Employment Studies (IES) were asked to examine UK employers' attitudes, strategies, practices towards, and perceptions of, people they employ in respect of their ability to retain work, and the potential for advancement within their organisation.
The work is to feed into the design of labour market interventions that aim to help those on the margins of the labour market retain employment and advance in work. These interventions are to be tested through the Employment Retention and Advancement (ERA) demonstration project
The authors of the report are John Atkinson and Matthew Williams.
The full report (186kb) is available as a downloadable pdf file. The executive summary has been reproduced below in HTML.
Employer Perspectives on the Recruitment, Retention and Advancement of Low-pay, Low-status Employees - July 2003
Document summary: This is a section from a multi-page document entitled Employer Perspectives on the Recruitment, Retention and Advancement of Low-pay, Low-status Employees - July 2003.
On this page:
Recruitment and selection issues
Barriers to stability and advancement
Employers and public intervention
Longer-term career advancement
Low-skill, low-status jobs in the UK can constitute a first step on a ladder to rising lifetime earnings, in which experience, tacit skills, contacts and know-how can be acquired and used to promote a pay-off later. However, in practice, they provide little or no basis for substantial advancement through the labour market. The evidence suggests that short-term mobility in the wage distribution is limited and that individuals who do progress do not generally progress very far.
The cheap and unprofessional recruitment and selection methods which often accompany entry to such low-skill, low-status jobs means that subsequent wastage is unnecessarily high, as round pins fall out of square holes. However, some employers do not regard such wastage as a bad thing if it shakes out unsuitable employees.
Such evidence as there is suggests that certain personal traits (especially reliability, motivation, health/fitness, honesty, integrity, 'good attitude' and keenness) are valued most highly among the selection criteria used by employers to recruit employees. In addition, in these low-level jobs, basic skills are far more widely and positively ranked than specific technical or vocational skills. Finally, evidence of suitability and competence, derived in this case from an employer reference and/or previous relevant job experience, is also quite highly sought after.
The concentration of people without qualifications in such jobs, and the lack of training derived from them, further constrains movement. Consequently, people who enter low-skill jobs without significant qualifications are unlikely to gain them during, or more particularly as a result of, their occupancy.
For this reason, opportunities for advancement are largely restricted to:
International comparisons of labour turnover place the UK mid-way between a fluid North American pattern of labour churning, and a lower Continental European one. Recent UK evidence indicates that a typical new job lasts just 15 months, although the average length of a job in progress is over five years, as most workers eventually find a long-term job match. Seventeen per cent of new jobs end within three months, and 42 per cent end within one year.
Although UK employers have an underlying interest in reducing high turnover in low-skilled jobs, this is rarely viewed as a high priority or a readily attainable goal, and there is scant evidence of them acting on their own initiative or in a consistent way to contain or reduce it, even in very tight labour markets.
The evidence suggests that the vast majority of former welfare recipients going into low-status jobs often face strong and multiple barriers to gaining, retaining and advancing in employment. UK employers report that recruits who have no (or no recent) experience of work often face a quite profound shock and that some have difficulty in recognising and then in complying with the norms of working life. Attendance, timekeeping and motivation are key problem areas.
US evidence broadly confirms this view, with participants in employment programmes recognisably facing multiple challenges to finding and keeping jobs. The most frequently reported challenges were two problems outside of work: childcare and transport. These were followed by lack of education; family and parenting problems; lack of life and job-readiness skills; behavioural problems; lack of motivation; and low self-esteem. Lack of job readiness seems to be the principal bête noire of UK employers recruiting those in disadvantaged groups who have had little or no recent experience of the workplace and its demands.
There is mixed evidence on the extent to which US employers are willing to provide low-skill, low-status recruits with practical help to overcome these problems. In the UK, it would seem that employers are ready to act more flexibly and constructively when they face tight labour markets. They seem more willing to engage in substantive innovation (for example, over transport or childcare) where the costs of such change do not fall significantly on them. They appear much less willing to modify the basic norms of behaviour (timekeeping, attendance, appearance, manner, etc.) as this is viewed as being incompatible with the effective delivery of their business or activity.
Although it is generally agreed that case management through a personal support worker and adviser can have a significant impact on the employment status of a range of programme clients, there is a lack of clear evidence of the impact of advisers on retention and advancement. Often such advisers have neither the remit nor the time to offer such an extended service. Case management appears to work best when:
The evidence suggests that using financial incentives with employers to promote the retention of low-skill, low-status employees, and former welfare recipients in particular, may be viable. Overall, it appears that employers are open to financial incentives and wage subsidy schemes. Unless the calibre/suitability of the individual is sufficiently assured, however, this can lead to problems for the employer and can discourage them from using such schemes. Some potential solutions include better job-matching and job-brokering by employment services, pre-employment training, and realistic job previews or work trials. Substitution and deadweight effects are important considerations in determining the efficiency of wage subsidy schemes.
In addition to financial incentives for employers, financial incentives to individuals may increase their motivation to remain in employment.
US evidence suggests that certain key factors are associated with longer-term wages growth and career progression:
This evidence confirms that the most common policy response to promoting career advancement has been to add case management and supportive services to existing pre-employment services such as job search. However, it is also argued that this is not enough to promote career advancement, which also requires: