Today’s Times carried an interesting article about the Governments Work Programme. The crux here is that 900,000 people have been on incapacity benefit for over a decade and the government want to change this.
Here are the figures around the scheme:
- 16 private firms and 2 voluntary groups have been awarded contracts on a ‘payment-by-results’ basis – including, Serco, Deloittes, Ingeus, G4S, A4E and Seetec.
- £4,000 to £14,000 will be paid for each jobless person who they secure work through the scheme
- The lower-end of this spectrum is paid for placing claimants of Jobseekers Allowance and the higher for the long-term sick who have now been signed off for work again.
- 10% of the fee paid on registration of the candidate
- 15% of the fee paid after the candidate has been in work for 6 months
- 75% of the fee paid after the candidate has been in work for 18 months
I’m positive the jaws of many a recruiter reading this hit their desks on reading that the majority of the fee isn’t paid till the 18 month mark – typical employment tenure for professionals in the UK is around 30 months and recruitment consultancies usually work to a 12 week rebate period with their clients...
But let’s have a look at the numbers based on placing someone on Jobseekers for a £4,000 fee,
On registration 10% £400
At 6 months 15% £600
At 18 months 75% £3,000
Total fee £4,000
The cynic in me would struggle to believe that someone who has been out of work for an extended period and become accustomed to living off the state would ‘stick’ a job for 18 months let alone 6 months.
At first glance it looks like a fool’s game, however just by registering candidates these companies are due to make large revenues, especially when the government are threatening to dock benefits for those who don’t enter the schemes! Registering 900,000 potential candidates at the lower end fee is worth £360 million alone...
The question here is will these private firms go for the quick revenue and become a candidate registration service or will they actually provide a professional recruitment service for those on benefits?
Nick Duncombe
ReThink Analytics
nduncombe@rethink-recruitment.com
http://uk.linkedin.com/in/nickduncombe
