- Centre for Employment Relations, Innovation and Change
This report – “Employer engagement in active labour market policies in the UK and Denmark: a survey of employers” - has been created to present research findings to a range of policy makers including the Department for Work and Pensions (DWP); the Department for Business, Innovation & Skills (BIS); service delivery organisations, and business representative organisations.
It analyses and compares employer engagement in active labour market policies (ALMPs) in the UK and Denmark.
ALMPs seek to reintegrate the unemployed and other groups into the labour market. The unemployed may move into work of their own accord and employers may recruit candidates from such programmes without overt knowledge that they are programme participants.
However, for the most part employers are crucial to the success of ALMPs, as ALMPs rely on employers to become involved, from placing vacancies and providing work placements, to recruiting groups outside the labour market. Yet ALMPs have tended to be supply-sided and their demand-side remains underexplored in academic studies.
The survey on which this report is based is the first phase of a research project funded by the ESRC. The second phase will comprise qualitative case studies of employers and organisations delivering ALMPs in the UK and Denmark, focusing on inter-organisational relations.
A total of 1,003 telephone interviews were conducted in the UK and 500 in Denmark with the person responsible for recruitment in each company (at establishment level). Fieldwork was conducted between December 2014 and February 2015 using Computer Assisted Telephone Interviewing (CATI).
The UK and Denmark:
The UK’s expansion of ‘welfare to work’ through the New Deal programmes of the late 1990s occurred during a similar time period as the introduction of ‘activation’ in Denmark. Overall spending on ALMPs as a percentage of GDP is significantly higher in Denmark. This may mean that employers are more aware of programmes in Denmark, but a key question for this study is whether this leads to higher engagement. Additionally, in both countries ALMPs are now no longer novel but are ‘mainstreamed’, however in the past two decades a number of developments have transformed their design and delivery.
The report examines:
- The extent of employers’ participation in ALMPs in each country and the differences and similarities between them
- The types and degrees of employer engagement
- The factors that affect employer engagement in these two countries.
The findings were derived from both basic descriptive statistics and a more complex quantitative analysis.
- In contrast to the findings of existing studies, the survey found that the overall level of employers’ participation in ALMPs was similar across both countries, although slightly higher in Denmark.
- In terms of employer engagement in ALMPs, as distinct from participation, two clusters of employers emerged from the survey data: those who were ‘instrumentally’ engaged, based on one-off or ad hoc activities, and those who were ‘relationally’ engaged, involving deeper, repeated and sustained engagement. Danish employers were more relationally engaged than UK employers.
- In relation to the factors that affected employer engagement in ALMPs, employers’ membership of regional and local business associations was important in the UK, as were employers’ social responsibility policies. In Denmark, the most significant predictor of employer engagement was collective agreement coverage (the extent to which workplaces have collective agreements with trade unions in place).
The data suggest a number of dimensions that may help to improve the conditions for fostering better employer engagement in ALMPs. Here is a brief outline of recommendations:
- Contrary to previous studies, employers were not negatively predisposed to recruiting the unemployed but their main reason for not participating in ALMPs was their satisfaction with their current recruitment method. Providers therefore need to convince employers that the service they offer is different, or of higher quality than their existing recruitment channels.
- Wage-subsidies were crucial for the higher relational engagement in Denmark and in the UK quasi-wage subsidies were important – this suggests that such initiatives are attractive to employers.
- The development of trust between employers and providers is vital to encouraging employers to recruit the unemployed.
A large number of employees recruited from ALMPs in the UK were on zero-hours contracts (but not in Denmark). This reflects a wider labour market trend in the UK, but is likely to undermine the success of ALMPs in moving the unemployed into sustained employment.
- Comparing employers’ participation and engagement highlighted differences in the types of ALMPs available in the two countries but the broader institutional contexts also matter for employer engagement.
- In the UK the factors that affected relational engagement were largely individual and firm-level, eg social responsibility policies.
- Relational engagement in ALMPs was positively linked with the likelihood of hiring disadvantaged groups. Although in the UK employers’ recruitment from these groups was high, this primarily depended on companies’ own policies and activities, but in Denmark this role was fulfilled by ALMPs, which are more ‘embedded’ in the Danish context. This suggests the potential for ALMPs to increase the recruitment of disadvantaged groups.
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The views expressed in this article are those of the author and may not reflect the views of Leeds University Business School or the University of Leeds.