Skills: responsible outsourcing – an oxymoron?

March 01, 2004

Jobs shop

Deloitte is driving a new programme to equip young people for careers in the retail sector. The pilot scheme marks an extension of the skills4industry programme, which the professional services firm helped set up in 2001 to train students in IT skills. Forty five young people will take part in the new pilot scheme, which kicked off at the beginning of February. Funded with a £250,000 grant from the DfES Pathfinder programme, the initiative will provide participating students with a technical qualification in retail operations as well as the softer employability skills needed in the retail workplace. In addition, they will receive seven-month full-time paid placements with participating retailers.

Deloitte is working closely with Tower Hamlets LEA on the new project, with assistance also from the retail industry organisation Skillsmart. Boots, Dixons, John Lewis, Selfridges, Tesco and The Link have all committed to offering work placements for the students. Contact Sarah McFarlane, Deloitte, on 020 7303 5054 (http://www.deloitte.co.uk)

On your marks

Marks & Spencer has committed to offer 2,500 work placements to individuals from disadvantaged groups over the next financial year. The Marks & Start programme, launched on February 3, will provide two to- four week placements in over 100 Marks & Spencer stores. The UK retailer is working with public sector agencies and charities to find suitable applicants and to deliver follow-up services after the work experience period. In addition, it aims to engage 1,000 of its employees to act as mentors, or ‘buddies’, during the placement.

The scheme marks an extension of the company’s existing commitment with Business in the Community to offer 600 placements to homeless people. To date, 450 homeless people have completed this programme, a third of whom have gained employment either with Marks & Spencer or elsewhere. As well as the homeless, the new employability programme will look to engage people with disabilities, parents returning to work, the young unemployed and students who are the first in their family to go to university.

By way of tracking the business benefit from the scheme, Marks & Spencer will regularly survey customer awareness, employee attitudes and the impact of the programme on the company’s brand. Contact Clair Foster, Marks & Spencer, on 020 7268 8232 (http://www.marksandspencer.com/marksandspencer.com/marksandstart)

Gateway to the professions

The government has set up a working party to examine how the professions can sustain and improve graduate recruitment. The group will focus particularly on those students who will not qualify for the full £3,000 support package from 2006. Analysing current support and incentive schemes in careers such as medicine, law, engineering and architecture, the Gateways into the Professions group is due to report their findings in mid-2005. Contact DfES on 0870 000 2288 (http://www.dfes.gov.uk)

Enough is too much

Tackling the Low Skills Equilibrium, a new study from the University of Warwick, finds that improving the supply of skills may not generate greater productivity if employers fail to enhance the skills of their workforces. One of the recommendations made in the report is for the government to use its purchasing power to oblige private suppliers in the education and health sectors to raise workforce skills. Contact Rob Wilson, Institute for Employment Research, University of Warwick, on &02476 523 530 (http://www.warwick.ac.uk)

Outsourcing resources

The East London Communities Organisation presented its new guide on socially responsible contracting to FORGE, an alliance of some of the UK’s largest financial services companies who work together on corporate social responsibility issues. Socially responsible contracting in London’s financial districts, launched on December 9, proposes specific workforce labour standards covering the employment of office cleaners, security staff and other manual workers in London’s financial district.

The initiative includes commitments to:

  • pay the minimum ‘London living wage’, estimated at £6.70 per hour;
  • offer occupational sick pay;
  • allow contractors a reasonable opportunity to join a trade union.

TELCO is also pushing for FORGE companies to factor contractor conditions into their CSR reporting. Contact Neil Jameson, TELCO, on &020 7375 1658 (http://www.telcocitizens.org.uk)

Corporate Citizenship Briefing, issue no: 74 – March, 2004

COMMENT:

As companies directly employ fewer and fewer people in low skills, low wage jobs, can responsible business respond to the economic logic of cost saving while keeping its principles intact?

For a small local charity, Telco is making quite an impact. As we went to press, news broke that Barclays Bank was in discussions to ensure contracted-out cleaners for its new Canary Wharf headquarters, employed by Rentokil Initial, will be paid above competitive market rates, with pensions, holidays, training and bonuses included. Delighted trades unions say “social responsibility, about which most of these corporations make great play, is not just about the environment and making charitable donations. It is about ensuring minimum labour standards for anyone who is employed directly, or indirectly, by them”.

But will a newfound sense of responsibility for “indirect” workers halt the trend towards outsourcing of low wage, low skill, low value add jobs? Surely not. Cleaning a high profile international headquarters is an exception that proves the rule. The cost savings from outsourcing are simply too big, estimated by some to be as much as £138bn worldwide over next five years. Indeed, the banking trade union, Unifi, reached agreement with the self-same Barclays in early January, paving the way for more offshore outsourcing, through early consultation and a package of benefits for those affected in the UK.

Just what are the social responsibilities of big name companies when they no longer directly employ entry level, low skilled jobs in significant numbers? One answer is more of the voluntary schemes reported above, brokered through the community affairs function at Marks & Spencer and Deloitte. The serious prospect of a permanent job is often the clinching factor in getting disadvantaged people to stay on the training schemes that open the way out for them through higher skills. Another answer is for employers to join the public debate just starting (again) about qualifications in schools, sparked by the Tomlinson report. Changes in examinations must spur improved attainment, not become yet another renaming exercise.

Finally, on low wages, another answer is lobbying for an increased statutory minimum wage, not something that comes naturally to private enterprise. Indeed Telco should join in, perhaps calling for a regional supplement, because something that requires one company to put itself at a cost disadvantage to its competitors out of a sense of social responsibility is simply not sustainable or replicable.

COMMENTS