The issue
Tower Hamlets has one of the lowest employment rates in London. There are twice as many jobs available as there are economically active people in Tower Hamlets and there has been a poor history of realising job opportunities for local people. Until recently most employment opportunities were in manufacturing and there is a low skills base in the area.
The population is young; it has the largest percentage of 20-34 year olds of any council in the country and a significant population of adults on Job Seeker’s Allowance (about 8,000) in the Borough with some 12,000 new registrations each year. Over a third of the population is Bangladeshi.
Action taken
The Borough started an initiative called Skillsmatch in 1997; this is a job brokerage service that aims to link up unemployed residents with local employers. The scheme is run as part of the Employment Task Group (a subgroup of the Local Strategic Partnership) and works with a number of organisations including Tower Hamlets College, Connexions, Barts and the London NHS Trust. It also has links with a number of local employers, such as Credit Suisse and Waitrose.
In addition to job matching, Skillsmatch provides training and work placement opportunities to help improve the local skills base. Typically, local job seekers are given two weeks intensive training in basic office standard flexible skills, communication, IT, general office management, personal development and interview techniques. This is then followed with a six to ten week (depending on the age of the participants) work placement within a company. The scheme is not limited to administrative training but also seeks to recruit to other sectors, such as the financial services sector.
Outcomes
Approximately 2,700 people come into contact with Skillsmatch each year; of these some 600 secure sustainable employment and 220 attend training through Tower Hamlets College. Some 4,950 local people have been placed in jobs since 1997. Almost all (97 per cent) of those who attend transitional programmes go on to employment and more than three-quarters (80 per cent) of those are still in those jobs after six months. This retention rate is significantly higher than for other similar programmes.
The scheme has also been successful in recruiting staff to the Council – it employed some 143 people into permanent positions in 2004. Whilst numbers recruited directly by the Council have reduced since then this is partly due to the fact that the Council has realised that its entry level for administrative type jobs is higher than it needs be. The Council is now reviewing this so that Skillsmatch applicants can apply for its jobs more easily.
The scheme helps employers recruit a more diverse workforce – some 80 per cent of its participants are from black and minority ethnic (BME) groups, which is a much higher percentage than its resident population (of which 48 per cent are from BME groups). One example is Waitrose, which has recruited 120 local people through Skillsmatch since it opened a new store in the area in 2001.
The service costs £1.2 million per year, a third of which is provided by Tower Hamlets Council; the Council has been successful in leveraging in the remaining two thirds of the costs from external funders.
The estimated cost of placing one person in employment is significantly lower than other schemes such as New Deal and Employment Zones. By extrapolating the savings made from not having to pay benefits to those who become employed through Skillsmatch, an estimate of overall savings runs to hundreds of thousands of pounds.
Learning
- The scheme is not just about meeting the Council’s target of reducing unemployment, but helps local businesses in their role as responsible employers seeking to recruit a diverse workforce and contribute to the local economy.
- The service has to be very business oriented in order to get local businesses to buy into the concept; both the Council and local businesses had preconceptions of the other which had to be overcome in order to achieve a good working relationship.