For economic and social reasons, skilled and motivated people must return to the workforce as quickly as possible, writes GERALD FLYNN

THE GATHERING pace of unemployment has accelerated since last December with 79,700 more joining the Live Register. This news has been accompanied by growing concerns there are few new initiatives to go beyond the initial social welfare processing steps.

The dramatic photograph of hundreds of people queuing for food parcels at a Dublin shelter earlier this month helped many of us appreciate the deepening job market problems.

The pattern of layoffs and redundancies has widened out from the dominant construction, hospitality and retail-related sectors to manufacturing and services sector jobs.

In three short months, unemployment has jumped from 8.6 per cent to 11 per cent of the workforce. The recent emergency Budget initiatives have been largely limited to the Minister for Finance’s observation: “We must support those who have lost their jobs through retraining and further education” allied with modest additional “activation measures”.

The focus needs to be on getting those who already have a good supply of training and education quickly back into purposeful roles.

A feature noticed in Britain and emerging here is that, unlike those who lost their jobs during the boom years, a smaller proportion are considering becoming self-employed or are trying to launch micro-enterprises.

This is hardly surprising given the more modest redundancy payment cushions now prevalent; the reluctance by financial institutions to lend to new ventures; slower demand for products and services; and more competition for any potential opportunities.

Yet we have a crop of some high-potential people coming on the jobs market who have training, skills and experience.

This is a lot better than the situation that existed in the 1980s according to the main managers’ body, the Chartered Institute of Personnel and Development (CIPD).

“The high numbers of graduates, managers and experienced employees losing their jobs will be a key ingredient for recovery,” said an optimistic CIPD Ireland director, Michael McDonnell. “Over 20 years ago, they had the option of emigrating to other English-speaking economies which were doing well but that option is largely closed at present.”

By the end of this year, State training and employment agency Fás estimates that there will be at least 70,000 people with graduate or postgraduate qualifications attending social welfare unemployment centres.

“For the past six months, the attention of policymakers has been on rescuing financial institutions and rebalancing the public finances with little evident intervention to address the unemployment problem,” Mr McDonnell added.

It has been unfortunate for Fás that it became the centre of concern over profligate expenses and inappropriate luxury spending for some of its senior executives and non-executive directors.

Instead of being at the forefront of addressing the 15-year record level of unemployment, it has been trying to restructure its senior management following the interim appointment of Eddie Sullivan to replace Roddy Molloy as chief executive four months ago.

Nonetheless, behind the scenes Fás has been conducting an interesting analysis of the current employment market. In its recent Irish labour market review, its economic team points out that decisions will have to be taken soon to address employment supports rather than unemployment welfare.

There is a lot of feedback according to the CIPD, backed by a RTÉ Prime Time programme last month, that those who lose their jobs are lucky to get jobseeker’s allowance payments approved within a few weeks, but they receive little or no support towards re-engagement.

The review makes a clear differentiation between the intensive and expensive supports needed to assist “the most disadvantaged” and the lower cost and better chances of success in supporting those who have a good work history and education.

“Bluntly put, can we afford to focus on unskilled, long-term unemployed in need of remedial supports against securing work placement or intensive business backing for those recently made redundant and who are clearly ‘job-ready’?” asked Mr McDonnell.

There is certainly a policy issue to be addressed on whether we allocate most training and development funding towards those who were often unable to secure employment during the tightest labour market in the State’s history from 1999 to 2006.

Even the issue of record unemployment appears tangential to the National Economic and Social Council (NESC) in its recent report on Ireland’s five-part crisis. It comes under the rubric of “the social challenge” amid a call for an immediate “jobs and skills summit”, though many may feel that the time for such a summit was last October when unemployment topped 250,000.

Nonetheless, the analysis ties in with that of the CIPD where the crisis study states that “it is imperative to give priority to identifying supports in the early months of unemployment that make its duration less likely. These should be designed paying close attention to the profile of the current inflow which is different in key respects from previous periods of high unemployment.”

In fact, non-Irish-born workers have been 50 per cent more likely to lose their jobs over the past year despite, on average, being better qualified that their Irish-born counterparts in similar positions. The skill-mix among the unemployed is wider than in the 1980s and younger men are taking the largest hit from redundancy notices.

Last autumn, the Department of Enterprise, Trade and Employment intervened to assist many apprentices who were unable to complete their courses, especially in construction-related skills. This has proved positive for many hundreds though, ironically, they will be among those best-placed to emigrate should other economies recover more quickly that Ireland’s.

The Fás review points out that “there has been a move in recent years in several countries, most notably Australia and, more recently, the UK, to place greater emphasis on getting people into work rather than training them for employment”. This is partly the basis for providing a PRSI-holiday for employers who take people off the Live Register and special top-up payments for those who participate in internship or social-support employment initiatives.

The Budget initiatives include a pledge for an additional 1,400 places on the Back to Work Enterprise allowance scheme which is beneficial for those with the necessary skills. However, forcing them to wait up to two years on social welfare before qualifying is a waste of potential talent and initiative.

The proposed intervention for those currently on a three-day “short week” to engage in “pilot training schemes” is a positive initiative, though the extent of these pilot schemes has yet to fleshed out. The overall Budget initiative involved a reallocation of €128 million from existing funding to provide up to 25,000 additional places in training or education

The proposal for 2,000 third-level graduates to participate in “work experience” needs to be further fleshed out, as does the commitment to expand “activation opportunities” for an additional 14,000 unemployed people.

Every extra person joining the Live Register costs the economy €21,000 each year in additional welfare payments and lost tax revenues – that amounted to additional costs of €14 million a day incurred during March alone.

The quicker unemployed people are reintegrated into the workforce the better, not only for them and their families, but also for our public finances. This is more likely to be achieved, over the next three years, by steps back to engagement for the “job-ready” rather than by labour market recruitment to full-time employment.

Gerald Flynn is an employment specialist with Align Management Solutions in Dublin; gflynn@alignmanagement.net