Bifurcation

Bifurcation is one of those excellent words reserved for crosswords and serious conferences. It was being used yesterday to describe a rather depressing phenomenon that will affect millions of people. I was at the Employment Related Services Association annual conference and labour market trends were being discussed. Bifurcation was being used to describe the way the employment market is splitting into well paid and highly skilled jobs and low paid unskilled ones, with the middle being squeezed. Technology and globalisation mean that many of these ‘middle’ roles are disappearing and those that cannot obtain the highly skilled jobs face unemployment or jobs they do not want.

This is a concern for the affected individuals as well as a problem for our country and unfortunately there are no easy answers. Going from unskilled to skilled is not a swift and simple journey and meanwhile our knowledge employers are struggling to find the people they need. The wider the gap between the haves and have nots the more unpleasant society becomes. There are thousands of families for whom the choice is unemployment or low paid work and the forthcoming changes to the benefits system will increasingly make life without work more challenging. I firmly believe that it is better to have a job with the structure and self-respect that this brings however for many the types of job available to them will not make for fulfilling employment.

I don’t believe there are solutions to the bifurcation. The Luddites demonstrated the futility of taking on technology and markets. However go to any UK town and there will be a college offering free training. Meanwhile the quantity and range of online training is vast.

It is easy to stigmatise the unemployed and there are certainly many who abuse the system or make no effort to help themselves. However I believe the majority simply meandered through education and early adult decisions and then found themselves in a position where options were few and employment choices bleak. I don’t want to trivialise the challenges of up-skilling or being different in a community where unemployment is the norm, however the more I think about it the more the solution is with the individual and not society. Government can enable however each person has to make his or her own choice as to what discomfort will be endured in order to bring about personal change or change for one’s children.

I am very busy

The trouble with being an entrepreneur is that there is always something that needs doing. An area that can be improved, a new initiative to be got off the ground or simply a fire to be put out. And then there are the demands of family, from pleasurable activities with spouse and children to the inevitable chores. All in all, finding spare time is challenging.

It was in this context that I attended Silicon Valley Comes to the UK this week (http://www.svc2uk.com). This is an annual week long programme of events around the UK aimed at audiences ranging from university students to established company CEOs. What makes it special is that almost 40 extremely successful US technology entrepreneurs and investors (http://www.svc2uk.com/speakers) gave up their time to spend a week in the UK, freely giving of their experience and advice. Over the week they influenced thousands of people, inspiring them to achieve more and providing invaluable real-world guidance. I am certain that every one of the visitors had many other pressing demands on their time. Despite this they made the trip and enthusiastically participated. All too often one hears of self-interested entrepreneurs and financiers. I wish these critics could see what good this group of businesspeople did in the UK this week. Whilst writing this blog I want to especially thank Sherry Coutu (http://www.svc2uk.com/speakers/61) and Reid Hoffman (http://www.svc2uk.com/speakers/28), the main drivers behind SVC2UK. I really liked Reid’s comment that “Entrepreneurship is important because it is how you invent the future” and I think the future will be better because Reid, Sherry and their network made the time to selflessly share. Certainly my MyWorkSearch to-do list just got longer!

Transferring responsibility

There is a much quoted proverb: “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”  I have been increasingly reminded of this as I have spent more time in the welfare to work sector.  There are numerous organisations that provide help to the unemployed.  They typically employ advisors who sit with jobseekers and whose responsibility it is to get as many of the people they are working with into a job.  As I have learnt more about this sector it has become worryingly clear that there is a problem.  Advisors assume that they need to do all the work for the jobseeker and the jobseeker simply falls into line with this way of operating.  This means that advisors decide what jobs their customers can do, write their CV, find relevant vacancies and then make applications on behalf of the jobseeker.  To a large extent, if the advisor does not do it, it does not get done.

On a very practical level, reduced government spending on assistance programmes means that this operating model cannot continue.  In previous years there was sufficient funding however nowadays the amount of money available is less than the cost of giving the help.  If providers cannot find a less resource hungry delivery model they will go out of business.

However I think the problem is more serious than that.  We all need to engage with the challenges and opportunities we have in our lives.  Jobseekers who don’t take responsibility for their job search are unlikely to commit to any job they do find themselves in.  Without this commitment the chances of long term successful employment are inevitably reduced.  The vicious circle of unemployment and unemployability kicks in and their brief period in work becomes simply an expensive interlude.

I don’t want to trivialise the challenges for individuals who are long term unemployed.  Finding work is hard and those jobs that are offered aren’t exactly the most appealing.  However having a job is far more likely to be a stepping stone to something better and the sense of purpose and value that employment brings are in themselves life-transforming.

My colleagues and I at MyWorkSearch have been evangelising about using technology to enable jobseekers to more actively participate in their search for work.  In many respects our message to providers has been about saving costs and efficiency.  These arguments certainly work as having unemployed jobseekers put some hours into their own job-search is a pragmatic solution to insufficient advisor availability.  But the more I think about it the more it is clear to me that having jobseekers search for their new role is also good for the individual.  Long term unemployment in a welfare society such as the UK breeds a culture of dependency.  The search for work is an important step on the journey of self-sufficiency and personal responsibility.

Dragons’ Den in Welfare to Work

6

For many years the government has, with the best of intentions, funded programmes that for one reason or another failed to deliver the anticipated results. So long as the provider has undertaken the specified services it is paid its money and the government is left with the frustration of having spent considerable sums without achieving the desired outcome. When existing solutions fail to solve social challenges there is a need to try new things. Meanwhile it must be exasperating for government ministers to recognise that all the risk of failure rests with them. Payment by results is very attractive to government however very few providers have the resources to fund service provision up front and accept outcome risk.

One can argue that it is the role of government to take these financial risks but given the public’s reaction to failed projects it is easy to understand why ministers and civil servants become risk averse. In addition, the nature of procurement means that the provided service has to be clearly specified as an open cheque would be an invitation to actual and suggested fraud. However a clearly specified service cannot react flexibly to changing circumstances. Far too often major projects proceed with all participants knowing that failure is inevitable but without an obvious mechanism to solve the problem or end the programme.

A possible solution is Social Impact Bonds. The government pays for results and investors make available the project funding. The provider can focus on effective delivery without needing deep pockets and meanwhile there is a funder that can be pragmatic whilst also taking a very close interest in project outcomes and not losing its money. The objective is that spending decisions are made as though it is one’s own money because for the investor it is. In the same way that venture capitalists can take informed risks and achieve more successes than failures, Social Impact Bond investors will ensure that projects they fund are effectively managed and failures are swiftly halted.

Providing a financial return to investors means that successful projects will cost more. But if there are fewer failures along the way the overall costs should be lower and meanwhile society benefits from better delivery. I think this method of funding could be positive for all, however there are a few pitfalls that I hope are avoided.

The more risk the investor is required to take the greater the return that will be demanded. Think Dragons’ Den and the challenges of asking for money to support an idea! Welfare programmes, especially the more innovative ones, will simply become unaffordable.

However if used smartly I think this finance method can work extremely well. In my view the following are key:

  • The government should only use this funding model where providers can specify a measurable outcome that will be the payment trigger.
  • The investors’ risk should be their profit margin and at most only a small part of their capital. This will encourage them to work for the upside without charging a huge premium for downside risk.
  • The government should be wary of philanthropic investors. The key to success is an investor breathing down the neck of the provider, focused on achieving the outcome targets and thus the investment return. A philanthropic investor may not attach the same importance as a traditional investor to attainment of the outcome targets and consequent payment of the success fee.

My company, MyWorkSearch, has submitted a bid as part of a consortium where the funding will be via Social Impact Bonds. At this stage I don’t know whether we have been successful however the bidding process has been an interesting process for all the consortium members. My experience so far is that both the government department procuring the service and the providers are feeling their way, not totally sure what model is best and where exactly to pitch risk and return. This is a topic I will return to as I learn more over the coming months.

Cabinet Office Innovation Launch Pad

It has been almost two months since I last wrote a blog entry. The summer has flown by and what is normally a quiet time has been anything but. I am not complaining as the alternative is far worse. However a little time to catch my breath would be most appreciated!

A lot is happening this week however the most exciting item is on Tuesday 19th July. Some months ago it was suggested that we apply for the Cabinet Office Innovation Launch Pad. My understanding is that the Government has recognised that SMEs will be the engine of growth for our economy and should be encouraged. However it was pointed out that it is very difficult for most SMEs to do business with the public sector and therefore if the Coalition is to give meaning to its intent it needs to make some changes. The Innovation Launch Pad, run from the Cabinet Office, is a high profile way of doing precisely this.

Any UK SME could submit their ideas on how they could deliver improved value for money for Government. There then followed an in-depth evaluation process including public commenting, expert review, civil service voting and presentations by the short-listed companies. From this nine companies emerged as the ones selected as being most promising and MyWorkSearch is one of them. We put forward two ideas and the one that has been chosen is that every unemployed person in the country should be offered MyWorkSearch free of charge. If we can help just a small proportion find a job slightly faster than they otherwise would, we can save the Government over £250m per year in unemployment benefits and lost tax.

On Tuesday there is an event at the Department for Business Innovation and Skills where the nine selected companies will put forward their ideas. Present will be Government ministers, senior civil servants, business leaders and the media. In the evening there will be a reception in Downing Street.

The nine companies are:

It is a tremendous honour for MyWorkSearch that we have been selected to get this far and I am delighted. What is most exciting are the many conversations and introductions that have already occurred as a result of getting to this stage. I am getting a real sense that there is a commitment from the civil servants I have met to be open to the ideas we offer. The public sector has been risk averse for as long as I can remember and more of the same will not produce the outcomes our country requires. Making it acceptable to take a few risks and potentially have some initiatives fail is exactly what we need. The ideas that work can be scaled and those that don’t can be learnt from.  Meanwhile a generation of entrepreneurs will see that the public sector is open for business and will create solutions, some of which will deliver huge benefits.

I hope that the Innovation Launch Pad is a success. It will be great for MyWorkSearch however it could be superb for the country.

Sour grapes and transparency

Many psychological studies have emphasised the importance of fairness. We can all put up with considerable hardship however what makes it feel far worse is when our situation has arisen as a consequence of unfairness. In business all too often we are unaware of why a decision has not gone our way and therefore do not know whether it was our fault through not being as good as necessary or someone else who simply did a better job. We very rarely have insight into a patently unfair process.

One of the positive things happening with government procurement is the greater transparency into the decision making process. Far more data is published and therefore one has a better, albeit not perfect, insight.

Two things have happened this week that I have found very frustrating and I cannot get away from the feeling that I am suffering from a severe case of sour grapes! That having been stated, what has happened is still wrong and is very disappointing.

The Cabinet Office are sponsoring what is a great initiative. In an effort to benefit from the innovation that tends to come from smaller enterprises and to encourage government to do business with this type of company they have created the Innovation Launch Pad.  Here companies can submit ideas and the best ones get a higher profile and access to help in advancing their proposition to government. MyWorkSearch submitted two ideas (idea 1 and idea 2) and in the first, expert review stage, they both were scored 5 out of a maximum of 5, something achieved by only a handful of submissions. Whilst I am clearly biased, given these scores I think it reasonable to claim some merits for both proposals. The current stage of the competition is for those with civil servant email addresses to register and rate each idea, clicking on a thumbs-up for those they like and a thumbs-down for those they don’t. Our second idea has the distinction of – by some margin – receiving the most negative ratings of all the several hundred submitted proposals! Given that the idea clearly is not daft my only explanation for this level of antipathy is that civil servants are associating our idea with public sector redundancies and that a vote against us is a vote against redundancies. Absurd and unfair though this is, there is nothing I can do about it and it is therefore highly unlikely that what on the face of it is a good idea, will have a chance to progress to the next round.

The second occurrence this week was the announcement that The London Boroughs Recruitment Partnership, a consortium of twenty-five boroughs and three associated bodies, have appointed a firm as their sole supplier of recruitment advertising and strategic HR services.  The announcement includes the fact that the contract has been expanded to include additional services such as outplacement to help LBRP members during the current period of change. MyWorkSearch looked at bidding for this major contract however the published requirement was that whoever bid for outplacement also had to offer recruitment advertising. The two services have nothing in common and I can see no logic in requiring both from the same company, especially as there is only one large provider in the UK that within its range of business lines has both services. We knew we could not win and therefore decided not to bid. Several months later it is this one organisation that has both offerings that has secured the contract. They are are a reputable and professional company and will in all likelihood do a good job for their client. However they won a major piece of public sector work in what was superficially an open but in reality a shoddy process. This is not fair to the companies that would have liked to secure the work and it is not fair to the tax-payers and employees of the twenty eight organisations that procure through The London Boroughs Recruitment Partnership.

And this brings me full circle. Two instances of poor practice that have negatively impacted upon my company, an enterprise I care very much about. Ironically the transparency of the process has made the unfairness that much more obvious. But what to do? I could obsess over it and have it churn away. I could try and fight the process and bring about change. I think instead I’ll just write this cathartic blog and then move on! Sometimes life isn’t fair and in business this rough goes with the smooth.

Year 3

2

We are just signing off our second full year of accounts and this brings home to me that MyWorkSearch is not quite the startup I consider it to be.  Indeed to be totally accurate the company is now 27 months old.  The business has gone from an idly discussed idea to fully formed business with a wholly functional technology product, numerous awards, management structure and processes, employees, customers and multi-million sales.  I still have my original business plan and whilst our core proposition remains the same it is amusing how wrong I was about so many aspects of who we would sell to, how and at what price.  On the one hand I can take pride in our ability to adapt to the market and opportunities, however I also have to recognise that a considerable sum of money was speculated on a venture that turned out very differently from the forecasts that underpinned the investment decision.  I don’t think that this is inherently bad, however it is important to recall this lest hubris sets in.

We now face our next set of challenges.  When we started we were pioneers in suggesting that the labour intensive process of (re-)employment transition assistance could instead be delivered using technology.  The prevailing wisdom was that our type of service could at most be a support resource to the assistance provided by a consultant.  We were not calling into question the value that a consultant could bring.  We just observed that in many cases there simply was not the funding to provide help in this way and that an effective alternative was necessary.  We thought it could be done through smart technology and decided to invest our time and money in making this happen.  Now that we have proven it is possible and become successful we have competition.  In many ways this is a good thing.  With very few exceptions, the absence of competition indicates the absence of a market.  Also, having competitors keeps us on our toes and ensures we do not assume our current market leadership is an entitlement.

So where to next?  We have made good progress with our employer proposition. Each week new organisations subscribe to our services and we are winning repeat business, demonstrating customer satisfaction.  We are partnering with an expanding number of organisations and it is clear that so long as we don’t do anything daft we will continue to develop our market presence.  Our government work is also progressing well.  This summer, in the UK, the Department for Work & Pensions starts the Work Programme.  Many hundreds of thousands of people per year will be assisted first into employment and then helped remain in work.  Delivery is sub-contracted via regional ‘Prime Contractors’ and with funding tight and the numbers requiring assistance high, technology solutions are one of the few methods of making the Work Programme viable.  This presents us with a huge opportunity and this week we launched our Work Programme mini-site at www.myworksearch.co.uk/wp.

Working with those whose employment challenges are more severe has allowed us the opportunity to once again embark upon intensive product development and stretch ourselves as we consider how to meet the needs of this client group.  We started work last year on our Nudge Engine® – functionality throughout our site to examine a person’s progress with MyWorkSearch and make personalised, useful suggestions – and have significantly expanded this for the Work Programme.  Our head of research, an occupational psychologist, has created a number of transferable skills questionnaires that can elicit what a person has the potential to do and then MyWorkSearch takes this data and helps both author a CV that presents the client’s capability in the best way and also finds relevant vacancies.  Other innovations include sophisticated activity management with jobseeker performance reporting provided to the Work Programme advisor helping the client, integrated chat to provide jobseekers with help when they need it and user journeys that can be customised and locked-down.  We created a table of MyWorkSearch features and were pleasantly surprised when we reviewed just how much we had developed.  At the very least we expect to positively impact upon the lives of many thousands of people who are struggling with the difficulties of extended unemployment.  However if our approach proves successful with those whose employment problems are more severe it is quite possible that we will have a transformative effect upon the welfare to work sector.

So we may no longer be a baby startup – but it certainly doesn’t feel like we are coasting or can rest on our laurels!

Common sense and practical help

MyWorkSearch is a commercial organisation and without revenue we cannot continue to operate.  We know that our service helps people back into work however we unfortunately need to charge for usage.  For the past eighteen months thousands of job seekers have been provided with MyWorkSearch by Jobcentre Plus with the Department for Work and Pensions (DWP) paying us.  Our research reveals that over 60% of those enrolled secure new jobs within three months and the average time is 62 days.  Thus the government has in return for its payment helped a person to come off benefits and return to being a tax-payer.

This publicly funded provision has now come to an end and it is ironic that it has done so at a time when the DWP publishes a research report “Job Search Study: Literature review and analysis of the Labour Force Survey” which looks at the characteristics of job search and what works.  This 118 page document provides a wealth of statistics and observations, however it was four of them that really stood out for me.  None of them are a huge surprise however it is easy to lose sight of their importance.

The first is the authors’ observation that: “The majority of theoretical and empirical studies of job search date from a time either before the rise of the Internet or when its use for job search was less developed and widespread”.  The second is that between April and June 2009 over 80% of job seekers used the Internet to look for work.  In other words, the majority of ‘industry experts’, advisers, civil servants and ministers learnt their skills, developed methodologies and formed their opinions at a time when offline job search predominated.  Yet nowadays, across all demographics, online is the most likely activity with the bulk of adoption in the past several years.  Indeed given the growth of online that was being observed quarter by quarter leading up to this research, 2 year old 2009 data materially underestimates current usage.

The third area that was commented on was a person’s social network.  Across a broad spectrum of roles an extremely good source of employment is an individual’s contacts.  When an organisation is hiring it is often those connected with the vacancy who are best placed to know of the opportunity and suggest a potential recruit.  So individuals with a wide network of people who are positively disposed to them and who communicate their availability are far more likely to receive a timely and warm introduction to prospective employers.  Equally, those without networks or those whose network comprises fellow unemployed, are less likely to hear of and be recommended for opportunities.  Social networks can be local and personal, such as former colleagues, fellow school parents or neighbours.  They can also be online via the many network sites that exist.

The final area is self-efficacy.  People with self-belief in their own qualities and their likelihood to secure a job are far more likely to obtain employment.  This self-fulfilling positive approach is clearly harder to maintain the longer a job search takes or when a person comes from a community where unemployment is the norm.

All of the above pre-supposes the desire to find a job and this in itself cannot be taken for granted.  It also assumes possession of minimum skills to make the person employable.

There are not enough jobs out there for every person who needs one.  But there are jobs for many people who don’t have one and are looking for one.  Reading through this report confirms my knowledge that we are doing the right thing with MyworkSearch; it also frustrates the hell out of me that an obvious, inexpensive and effective service is being cut at a time when it is very much needed.

MyWorkSearch will continue to prosper with our other contracts and I am optimistic about the future.  However I do wish we could find a way to offer the service to every newly unemployed job seeker.  Hopefully some senior policy makers will read this DWP research report!

Yes – this does matter!

4

I am the CEO of a company and I am also a salesperson, responsible for ensuring we win as much business as possible.  So I do appreciate both sides of the coin: receiving numerous approaches from enthusiastic vendors, all keen for my time and budget and meanwhile being that self-same person trying to get a prospective customer to focus on our offering.  I am quite certain that in my haste I have rejected offers that it would have made more sense to accept.  But this is just one of those things in a busy business life.

I was pondering this as I discussed some of the challenges our business development team face.  We are convinced that:

  • MyWorkSearch through taking an innovative approach solves a fundamental problem that affects the entire outplacement industry.  The level of assistance that can be provided by a conventional outplacement provider is directly related to the budget, as the main cost is a consultant’s time.  The lower the budget the more the service is rationed and at some point the offer becomes of very limited value.  Delivering through technology breaks this link as we do not have a delivery cost.  Our service is 24/7 ‘all you can eat’ with the user taking as much assistance as s/he wants.  On the basis that we have got our solution right – and the evidence suggests we have – we have created something truly special that transforms what is possible in our sector.
  • Whilst every employer I have met has stated that they would like to provide career transition help to former staff, many have said that they simply don’t have the money to do this.  MyWorkSearch, using technology, has dramatically reduced the cost of outplacement assistance and I quite simply do not believe that any solvent employer can now use lack of funds as a reason to refuse provision.

Executives who do not spend their employers’ money wisely are doing a disservice to the organisations that pay their wages.  But unless the sums are very large the consequences are normally trivial.  However those responsible for outplacement decisions fall into a different category.  Not to put too fine a point on it, their employer is firing people who will need to secure new employment in what is clearly a tough jobs environment.  Since very few people are sufficiently wealthy to be able to fund their lifestyle for long without a salary the consequences of redundancy can be severe indeed.  I therefore find it very hard to accept the cavalier attitude to outplacement that my colleagues and I observe all too frequently.

I don’t believe that HR executives who fail to put time and effort into their choice are callous.  Nor do they fall into the category of the careless pathologist whose inattention results in a cancer being missed or the inefficient MOD administrator whose error results in a soldier being without essential equipment.  However their casual approach to this responsibility has consequences far further reaching than I believe they realise.

I remember seeing a cartoon of a man with a machine-gun standing outside a tent next to a medieval army whilst inside the king points out to his servant that he has a battle to fight and no time to see some salesman.  So how should we handle the employer who refuses to look at what we offer, citing either an existing supplier relationship or lack of time or the inability to countenance outplacement due to absence of budget?  If anyone who reads this has some ideas please do get in touch.  And I promise to make time to listen!

Several buses – all at once!

I was going to start my blog with some comment about how one waits for ages and then several buses come at once.  However I then noticed that it has been a month since my last post so it is me that has been slow to write rather than the pace of news that has been fast! But nevertheless a lot has happened.

In September I wrote about MyWorkSearch being shortlisted in the 2010 e-learning awards.  For a new company to make such a prestigious list is hugely rewarding.  A few weeks ago a colleague and I went to the black tie awards dinner, more to network and learn than in the expectation of success.   We vaguely plotted our route to the stage as they prepared to announce the winners in the ‘most innovative’ category however we were not too disappointed or surprised as the bronze and silver winners were revealed and our name was not called out.  I think I was having a “never mind, perhaps next year” conversation as gold was announced.

It took the person next to me to point out that my colleague and I really should head to the front to collect the top award!  So MyWorkSearch built upon the successes of winning the LinkedIn European Business Award and the Microsoft Bizspark contest to now also receive the accolade of Gold Winner in the most prestigious UK e-learning awards.  As if this wasn’t enough, in the past month we were a finalist in the National Online Recruitment Awards and have been shortlisted in the Learning Technology Solution of the Year category for the 2011 IT Training Awards.  I guess I had better take my black tie to the dry cleaners!

All of this external recognition is extremely satisfying.  We work very hard to do a good job and it is great when others acknowledge this.  However the best bit of good news came last week when we completed the analysis of our user research study.  We wanted to find out how successful MyWorkSearch is in getting people back into work.  Well the answer is:

  • 61% of MyWorkSearch users had within 3 months found a new job.
  • The average time to find a job was 62 days.
  • 92% of successful jobseekers stated that MyWorkSearch contributed to this outcome.
  • Jobseekers who accessed the advice and eLearning on MyWorkSearch are 50% more successful at finding a new job than those who do not.

Now this is a superb Christmas present. As I sign off on what will be my last post for 2010, I wish everyone all the very best for the holiday season.