Flexwork, Austria: Integration into the labour market of people at risk of exclusion
Flexwork is a temporary work agency founded as a result of a tripartite initiative aimed at the labour market integration of people at risk of exclusion. To reach this objective, the agency takes an innovative approach by offering those people the opportunity of a job through the use of socially acceptable temporary agency work. The agency operates as a non-profit organisation in a competitive market and is also active in the field of labour market policy. It works in conjunction with the City of Vienna, the social partners and the Public Employment Service.
Flexwork is a non-profit temporary work agency in Vienna and is a subsidiary of the Vienna Employee Promotion Fund (Wiener ArbeitnehmerInnen Förderungsfonds – waff). Waff is a fund of the City Council of Vienna including the social partners and the Public Employment Service (AMS) in the steering committee. The social partners include the Chamber of Labour (AK), the Federal Economic Chamber (WKO), the Austrian Trade Union Federation (ÖGB) and the Federation of Austrian Industry (IV).
Even as a non-profit organisation, Flexwork has to compete on the open labour market for temporary agency work on the basis of covering its costs. The organisation employs 300–450 temporary workers and around 30 permanent staff members in administrative and management roles. The largest area of its service activities is unskilled work, which is mirrored in the skill structure of the workforce. Over the period 1997–2005, the agency’s workforce comprised 47% of unskilled and semiskilled workers, 28% of skilled workers and 25% of secondary school graduates. On the one hand, this highlights the demand for temporary agency work among the agency’s client companies. On the other hand, these statistics also emphasise Flexwork’s objective to integrate people with social difficulties into the workforce – workers who fall into this category are overrepresented in the group of unskilled workers. About one third (32%) of the agency’s employees are women, which is a very high number compared with sectoral norms as temporary agency work is quite often highly male dominated. All employees work under permanent employment contracts and 98% of workers are employed on a full-time basis. The agency’s management and the works council have established a highly cooperative relationship. The trade union density stands at around 60% of workers.
Description of the initiative
Founded in 1996, Flexwork’s objective is to create new ways of integrating unemployed people into the labour market, particularly those with social difficulties, based on a consensus of all important societal actors. The agency offers, on the one hand, favourable employment contracts and conditions for temporary agency work, and pursues, on the other hand, the objective of a full permanent integration of temporary agency workers into its client companies. The activities of Flexwork focus on promoting the employment and reintegration of people with social difficulties into the regular labour market, such as long-term unemployed people, people with alcohol problems, previously convicted persons, people without vocational education, recipients of social assistance, and others.
Flexwork’s policy aims at working according to entrepreneurial principles in a competitive market, which means following contract-oriented and cost-covering initiatives as well as monitoring usual market prices. In this regard, it tries to employ as many people as possible from so-called ‘labour market problem groups’ and to place these people with client companies on permanent employment contracts. This policy is evaluated every year by the agency’s parent company WAFF. Under competitive market conditions, temporary agency work in this sense is a means to an end, as it favours the labour market integration of specific problem groups in society.
Flexwork offers three different kinds of temporary agency work:
- jobs with a ‘takeover’ option, which are placements with an extended probation period;
- positions covering short-term absences of regular workers, which may be seasonal or request driven;
- carrying out payroll jobs for companies that permanently outsource this task.
The service covers more than 100 occupations: among these are unskilled workers, skilled workers, administrative and technical personnel and care occupations. Unlike the usual principle in the sector, no payment is foreseen for client companies in the case of a ‘take over’ of a worker under a permanent employment contract. The latter is, in fact, the main aim of the overall model of temporary agency work at Flexwork.
To date, the company has been successful in reaching its main objectives. In ten years (1997-2006) around 4,400 persons have taken up a job with Flexwork, of whom 1,800 workers have switched from temporary agency work to permanent employment at client companies. In all, around 60% of the workforce is made up of workers with no vocational education. In terms of age, around 40% of employees are either younger or older than the main employment age of 25–45 years. The clearly defined ‘labour market integration’ policy at Flexwork is also expressed in the benchmarking of the temporary agency workers: as well as the high proportion of successful contracts according to entrepreneurial principles, it is important to achieve the contingent from the specific target groups. Flexwork has offered its services to over 500 companies, which confirms that the company is an integral part of the temporary work agency market in Vienna. An internal evaluation for 2002 showed the following employment figures relating to people at risk of exclusion: 36% of those employed were people who received allowances for going back to work such as long-term unemployed or elderly unemployed people, 4% of people were recipients of social assistance, 56% of people had no vocational education and 38% were migrants.
In between assignments with client companies, Flexwork offers two different forms of training workshops to workers in the so-called ‘Flexwerkstatt’, including further vocational and integration training and support in relation to application activities and competencies. The underlying aim is to improve the employability of the workers and to avoid renewed unemployment. WAFF fully subsidises this training offer. In 2005, 238 employees were trained in the training workshops, amounting to a total of 32,700 training hours. In terms of vocational training, the most frequent demand for courses relate to information technology (IT) and German as a foreign language among migrants. Furthermore, special courses are organised to address specific problems of people with social difficulties, such as health, literacy, handling of debts or personal financial planning in a precarious situation, and different aspects of uncertainty and security which are particularly important for temporary agency workers. The positive outcomes of these training workshops are reflected in the following figures for 2005: 7% of participants were employed on a permanent basis at a client company, 6% of participants found a job by themselves outside Flexwork, 53% could be placed in new temporary work assignments through Flexwork and 34% had no success in getting back into employment with the result that they had to leave the company.
Flexwork is a good example of how to combine active labour market policy with market principles to reach employment policy targets initiated by an effective cooperation between all the relevant social partners. Data reveal that Flexwork is very successful in both integrating people in permanent employment at client companies and offering long-term employment in temporary positions under socially acceptable conditions.
Some of the key success factors of the project relate to the fact that, through Flexwork policies, important prejudices and measures can be avoided that would otherwise hinder the employment of people who are at risk of exclusion. The activities of Flexwork in this respect create a bridge between the client companies and the participants by opening doors for both sides. As Flexwork has acquired the reputation of a confidential service provider, the company can avoid the ‘critical’ or discriminating factors associated with a direct job application. These are usually the main reasons given to candidates for not getting the job: for example, such factors include long-term unemployment, age, sex, ethnic origin or criminal conviction. By taking on temporary agency work, people at risk of exclusion from the labour market get the chance to prove their abilities, engagement and commitment. In this type of employment, the more practical aspects of their work come to the fore and lead in some cases to a permanent job. The risk for the client company is minimised in this case, and any existing prejudices against the workers can be overcome by increasing practical experience.
In the case of young people, Flexwork also offers opportunities for entering the labour market for the first time and for improving vocational experiences in temporary agency work to strengthen the workers’ principal position on the labour market.
At the same time, Flexwork confirms that temporary agency work with high social standards is possible in a competitive market and could have a positive effect on the whole sector.
Exemplary and contextual factors
Flexwork is a unique example of how a normally ‘precarious’ form of work organisation like temporary agency work can be used for successful integration of people at risk of exclusion from the labour market. The company’s policy is an innovative and imaginative approach to change market trends in temporary agency work. Flexwork operates almost like a private company, which proves that the integration of people at risk of social and labour market exclusion is possible under normal market conditions. Moreover, the company’s practices are a concerted action of communal authorities of the City of Vienna, the social partners and the labour market institutions.
Manfred Krenn, FORBA, Vienna