Towards inclusive and sustainable growth: Promoting in-work progression Sheffield City Partnership Board Dr Fiona Aldridge Fiona.Aldridge@learningandwork.org.uk @FionaAldridge

Why in-work progression? In-work poverty is an increasing share of all poverty. This has economic as well as social costs Economic benefits to improving pay through a reduced social security bill and increased economic activity In-work progression is key to tackling in-work poverty 5m adults in low paid work – 1m more than OECD average Low pay is key driver of household poverty Low pay is not just a temporary phenomenon; three in four people in low pay in 2001 were still low paid a decade later Policy changes have put the spotlight on in-work progression In-work conditionality under UC will require low earners to take steps to improve their earnings (hours or pay)

Challenges to progression Progression outcomes shaped by range of factors Personal and household circumstances; Access to learning and skills development; Employer practices; Local labour markets; Welfare policies Progression opportunities are sector-specific Low-paying occupations seeing generally stronger employment growth Hospitality and catering, personal services, retail and residential care sectors are closely associated with low pay and persistent low pay Compressed wage distribution means limited opportunities for increased earnings Limited support for progression Employment support focuses on out of work Skills system focuses on young people with fewer qualifications Not inevitable – there are good examples of low paying employers that do progress their staff

What works? The evidence base is limited One RCT in the UK – the Employment Retention and Advancement (ERA) Demonstration, delivered by JCP 2003-7 Improvements in earnings for long-term unemployed group, as a result of increased work entry and work retention (not progression in work) Improved uptake of skills provision for lone parents but not ‘converted’ into earnings progression Weak employer (and sectoral) focus may have limited the programme’s impact

What works? Review of mainly US studies by Anne Green et al (for JRF). Not conclusive, but suggests that: Personalised adviser support, incl careers guidance and wrap around holistic support, alongside access to IAG is important in supporting decision-making on learning and skills take up Some evidence of wage impact from skills provision – if targeted on low-paid workers, focused on transferable skills, clearly linked to progression routes Potential for sector-based workforce development (‘career ladders’) Trade unions can play a key role in enabling access to progression routes in workplace Employer engagement easiest where clearly linked to business need (e.g. skills shortages, recruitment/retention difficulties)

An integrated approach Evidence supports need for integrated approach: With individuals –active labour market and skills policies – to support the development of individual skills and capabilities With employers – helping them to get better at developing their staff and growing their businesses, perhaps via LEP Growth Hubs? – to strengthen progression pathways in low paid sectors Via places – coordinating support and convening key stakeholders, sectors, interests – based on labour market analysis, establish delivery partnerships, development of engagement models

Current In-work progression trials

West London Alliance: Skills Escalator Pilot Part of West London’s Whole Place Community Budget pilot Delivered by West London Alliance (LB Hounslow and Harrow) funded through Transformation Challenge Award To redesign frontline services for people working on low incomes by providing access to better paid and more stable employment through personalised advice and skills acquisition Entry point Civic centre CAB Library Employer Children’s centre Credit union Online service Money, debt, housing, etc NCS Childcare Skills Adviser service Triage service Advice/assess Action plan Advocacy Follow-up Skills escalator Guidance Job brokerage

Trust for London and Walcot Foundation: Step Up Grants for pilots to support in-work progression Target beneficiaries – individuals paid below London Living Wage working an average of 14 hours a week for the last 12 months £200,000 available per year in total Individual grants of up to £40,000 per year Oct 2015-Sept 2017 – Year 1 “test & learn”, Year 2 “steady state”

Step-Up Projects Creative Society - supporting low paid young people in creative/cultural sectors High Trees Community Development Trust - supporting low paid workers in Tulse Hill (with focus on lone parents and over 50s) Indoamerican Refugee and Migrant Organisation (IRMO) - supporting low paid Latin American workers Springboard UK – supporting low paid young people in the restaurant and hospitality sector; employer-focused Thames Reach/Clean Slate – using digital engagement, alongside more conventional approaches, to support low paid workers Women Like Us – supporting low paid parents (mostly women, including many lone parents)

Ambition London Ambition London seeks to test and trial a range of interventions to engage, train and support people to change their lives with the support of Advanced Learner Loans We aim to develop models and approaches that can be rolled out more widely to: support employers and people to meet their skills needs and demonstrate the impact provide people with career advancement support, aligned to their needs increase individual (and employer) investment in their skills and learning support people to progress from low pay

Examples of tests and trials Supporting individuals become informed customers with sector specific IAG and case studies Job Coach support model Modular training offer Flexible training approaches; online and blended Supporting individuals become informed customers via development of an app Employability IAG and support Engagement via employers Co-investment model Modular training offer Supporting individuals become informed customers with a sector toolkit Additional employability support Modular training offer

Glasgow In-Work Progression in the care sector pilot Part of the Glasgow City Region City Deal - enabling greater self-reliance among people on low wages by testing ways to boost incomes To devise, deliver and refine a sustainable model of employee progression to improve the skills and earnings potential of care sector employees Budget of £600,000 over two years, half from DWP local budget and matched from Glasgow City Council Delivered by business advisers in City Council DRS Co-production of action plan Co-ordinate interventions Ongoing support Post-intervention assessment Target: 40 employers in social care sector Business interventions, eg: Business diagnostic Operations management Pitching and procurement Business sustainability Leadership & management development Target 400 social care staff Employee interventions, eg: Career progression plans Formal qualifications Job rotation Mentoring support Financial & debt advice

An integrated service should… Improve capability to increase earnings – support to get the tools, skills and experience needed to progress Address barriers that may make it harder for some – like caring responsibilities, health and disability, language barriers, motivations, and incentives to earn more Support to find and then take opportunities –matching and brokering people into better and better paid work, or to progress within their current workplace Help to address barriers for employers – including how jobs are designed, company structures and processes, employer behaviour, sectoral approaches

How might this look at local level? Wrap around services – health, housing, debt, childcare Targeted initiatives to improve business practices in low-pay sectors Outreach and Engagement JCP Housing Trade unions VCS In-work progression service – personalised, flexible, sequenced support Engagement with employers in higher paying sectors with good career paths Skills provision Individual-focused Business-focused (through Growth Hub)

In summary, in-work support should… Be focused on outcomes – increasing earnings, not just exits from benefit Lead to sustainable employment – hourly pay not just hours worked Address in-work poverty – prioritising low income households Be personalised – there are very different barriers and motivators for different groups, which points to a need for different combinations of support Be evidence led – build on UK ERA and international reviews, add to the evidence on what works for whom Be joined up – with city regions, employer support, the skills system, local provision, European Social Fund provision, etc. Be ambitious – more than ‘conditionality plus a pound’

THANK YOU QUESTIONS