It is hard to discern the logic behind the Government’s new Work Placement Experience Programme (the WPEP).
The WPEP is intended to provide training, education and skill development for the unemployed. Those who have been unemployed for longer than 6 months can take up a ‘job placement’ with an employer (‘host organisation’). The placement will last six months and participants will be paid €306 per week for 30 hours work. Employers who participate in the scheme have to offer training but do not contribute to the pay (i.e. they get free labour). The scheme’s aim is to give people the ‘opportunity to re-train and get experience in a new role’.
Here’s the first problem: a business expands its payroll when they increase production of their goods or services to meet rising demand. The Government is projecting a significant increase in a consumer-led recovery, and is projecting net new employment increases to be:
- 2021: 79,000
- 2022: 225,000
- 2023: 75,000
Service sector companies reported the strongest month-on-month growth in business activity in July since 2000. Given that so many businesses are ramping up production and employment to meet increasing demand, why would some employers participate in this scheme? This is where a poorly-designed scheme can be open to abuse.
The WPEP tries to guard against abuse by laying down some conditions. The employer:
- Must not have job vacancies in the area of activity and at the skills level the placement is offered.
- Must not have made employees redundant from similar roles in the previous 6 months.
- Cannot reduce the hours of work of existing employees to accommodate the placement.
This attempts to stop displacement of current labour. However, it could be difficult to guard against the displacement of labour that would have been employed if the scheme had not existed. This is called the ‘deadweight’ effect. If an employer could not get the WPEP worker, would they have directly employed someone?
Deadweight is not the only problem. The scheme could incentivise poor company practices. First, a company may try to use the scheme to undermine competitors by accessingfree labour. After the abuse of the JobBridge scheme, companies are limited to the number of participants they can take on. However, there is still scope to suppress payroll. In competitive markets with tight margins, some companies may think this could give them an edge.
Secondly, it diverts managerial resources away from productive activity. Rather than incentivising management to up their game in terms of quality, structured training, customer relations, and marketing, poor schemes merely incentivise management to expend resources on seeking state subsidies. This will hardly create a competitive enterprise base.
The Government is hoping the scheme will increase in-work training and, so, benefit employees. This is certainly a worthy goal. But what is the quality of the training and jobs on offer? It is hard to imagine six months will produce much in the way of new, enhanced skills. Apprenticeships offer a far better route for skill development – but this takes time. Programmes combining both classroom-based and work-based training include:
Bio-pharma * Arboriculture * Construction & Electrical * Engineering * Hairdressers * Hospitality (chefs) * Retail & Sales * Motor * Property Services * Finance & Insurance * ICT * Health * Craft butchers
These apprenticeship modules take 2 – 4 years. This does not include other training programmes operated by SOLAS.
The in-work training provision under the WPEP, on the other hand, looks limited. For instance, a car washing placement offers this training:
‘ . . . the participant will be trained in how to use the car washer and the different settings, i.e. wash, shampoo, rinse, wax and which solutions to be used for each cycle . . . will receive training in how to use the wet/dry vac in order to vacuum and shampoo the upholstery and interior of the vehicles . . what products to use for polishing, cleaning and buffing of the vehicle interior and exterior . . .
No doubt this is necessary to carry out car washing services. But is this an example of what Minister Heather Humphreys called
‘ . . . innovative learning and development opportunities for participants’?
Such jobs on offer include clothes cleaning, sales assistant, kitchen cleaner (‘cleaning of dishes/utensils’), etc. Some come with grand titles (e.g. ‘International Business Executive’).
Particularly concerning is the use of this scheme by childcare crèches and early years services. This is a sector plagued by low pay, precarious work conditions and high staff turnover (up to 40 percent annually). It’s not that there is a shortage of trained staff. Since 2010, 62,000 people have been accredited for the childcare sector but there are only approximately 25,000 actually working in the sector. Many have left due to low-pay and precariousness. Providing free labour for childcare and early years’ services can only increase cynicism throughout the sector (this comes from Jennifer Whitmore, TD on foot of a PQ) .
You can review the job and training descriptions here.
There is an important role for state support for, and incentivising, in-work training. The Department of Enterprise shows that 79 percent of Irish-owned companies that are agency-supported (essentially, export facing) spend money on ‘formal, structured’ training. But the average spend per employee was €537 in 2019. We shouldn’t be surprised if these figures are much lower in non-agency supported businesses – the vast majority of businesses in the state.
Such supports, just like apprenticeship and related-programmes, should require a quality rather than quantity approach. The WPEP does not look like it fits this description.
This scheme is estimated to cost €150 million for 10,000 placements. This looks to be of poor value – especially considering the state could employ approximately the same number for a whole year. These ‘real’ jobs could integrate training and education into socially valuable and meaningful work, especially for the long-term unemployed with stable, long-term contracts.
The Minister should stand down the Work Placement Experience Programme before too much money is misspent and focus on real training and employment quality initiatives.
We don’t need a re-heated JobBridge.
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