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Work first approach to Universal Credit costing employers

The Universal Credit (UC) system is unnecessarily costly to employers, according to a new report from Manchester Metropolitan University (MMU).

The way people access UC in the UK follows a work first approach, meaning claimants are encouraged to get into work (or progress to a new role) as quickly as they can to receive payments.

This is leading to claimants apply for jobs that don’t match their skillset and flood employers with poor job applications, the report said.

More than 100 employers and stakeholders found this approach ineffective for recruitment and costly to manage.

There were also concerns the government's new Way to Work drive, aiming to get 500,000 unemployed people back into work by the end of June this year, would exacerbate the issue.

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A social care employer quoted in the report said: “When we advertise for care assistants we get hundreds of applications… we stopped advertising on the Jobcentre… because you just had hundreds and hundreds of applications from people that are really not interested in care.

“They just have to apply to show their employment advisor that they’re applying for jobs.”

Instead of encouraging people into any job, employers called on government to focus on the quality of work with a greater focus on people’s skills, capabilities and circumstances.

Commenting on the findings Melanie Wilkes, head of research at the Work Foundation, Lancaster University, told HR magazine: “At a time when organisations are struggling to recruit, it is disappointing if unsurprising to hear that employers feel employment support in UC isn’t working for them.

“We know that the current approach, pushing people into any job in any sector, is unsustainable for jobseekers and organisations alike.”

Employers’ experience of working with Jobcentres varied, yet many were reluctant to engage with them as they found the UC system punitive.

They called for clear and consistent policy, with a focus on partnering with workplaces, to improve the country’s approach to skills and employment.

Katy Jones, lead author and research fellow in MMU’s Decent Work and Productivity Research Centre, said: “Our research demonstrates the importance of action when it comes to employers, showing why supporting people to move into and progress in work should be a shared agenda, in which employers should play a central role.”

Prior research from the Work Foundation showed that the conditions people have to meet to receive UC can also limit their training opportunities.

As such, Wilkes added: “Instead, government needs to work closely with training providers and employers to support people to enter and progress into good quality, secure and well-paid employment.”

The full report, Universal Credit and Employers: Exploring the Demand Side of UK Active Labour Market Policy, can be found here.