Philips, the Netherlands: Integration into the labour market of people at risk of exclusion – early school-leavers
Royal Philips Electronics is one of the world’s leading electronics companies. In 1982, the company introduced the ‘Philips Employment Scheme’ which originally was targeted at young and unemployed school-leavers, offering training and work experience for people with limited opportunities in the labour market. At a later stage, the initiative came to include other groups of people such as women returning to work and persons with disabilities. By 2004, over 11,000 people had benefited from the employment scheme.
Royal Philips Electronics is not only the largest electronics company in Europe, but it is also one of the world’s biggest electronics companies, with 161,500 employees in over 60 countries and sales which amounted to €30,395 billion in 2005. In the Netherlands, Philips employs 25,000 people. Some 80% of the company’s workforce are men. About 25% of the workforce are younger than 35 years of age and more than 35% of workers are 45 years or older. Trade union density is unknown. The company focuses on electronic products in the areas of healthcare, lifestyle and technology. Philips is currently the leader in the world market, ranked number one for electric shavers and DVD recorders.
Description of the initiative
The initiative described here dates from the early 1980s. At that time, the Netherlands was confronted with increasing unemployment figures, while simultaneously facing an increasing number of young people looking to enter the labour market. One particular year saw more than a third of all school-leavers unable to find a first job. In order to restore the socioeconomic balance and to improve the labour market situation, employer organisations and trade unions agreed to restrain wage growth, and to support the integration of unemployed people into the labour market through regulations. One of the most important policy measures at that time was the reduction of working hours. Philips signed the agreement, but the company did not truly support the idea of reducing working time. Partly as a concession to the trade unions, the company introduced a detailed plan offering school-leavers one year of work experience and education: the Philips Employment Scheme.
The company’s objective in terms of the scheme is as follows, ‘through the Employment Scheme, Philips wishes to make a noteworthy contribution by helping to reduce long-term unemployment and prevent social exclusion’. Over the years, the content of the scheme has evolved while its aim has remained basically the same: to offer training and work experience to groups of people with limited opportunities in the labour market. Originally, the scheme targeted unemployed school-leavers; at a later stage, however, further groups of people encountering difficulties to enter or re-enter the labour market were included in the initiative, such as women returning to work and disabled persons. Today, participants have to be unemployed for at least six months. Other selection criteria for the Philips Employment Scheme are dependent on the type of work experience being sought.
Recruitment and selection of new participants is an ongoing process, carried out in close cooperation with the Dutch employment services. The Dutch employment services have been split up into the following: a basic public employment service provider; the Centre for Work and Income which remains public; and a privatised reintegration services company. This reintegration services company is dedicated to the reintegration of disabled or unemployed people into the labour market. Among their clients are the state body implementing employee insurance schemes and paying out unemployment benefit (Uitvoeringsinstituut werknemersverzekeringen, UWV), occupational health services, and private companies. The reintegration services organise information meetings for unemployed or disabled people, inform UWV offices of their activities and sometimes advertise to recruit potential candidates for the Philips Employment Scheme. The reintegration services also select potential candidates through telephone screening, which is followed by an interview which focuses on the motivation and suitability of the candidate. Following the recruitment and selection process, the reintegration services recommend candidates to Philips, and about 90% of the recommended persons are included by Philips in the employment scheme.
Philips proposes two different types of contracts within its employment initiative. New participants, who have already successfully completed their vocational training (i.e. have a job certificate), but who need work experience to find a paid job, receive training lasting one year. This is on-the-job training and solely intended to provide the participants with work experience. If, during their training course, a participant needs additional formal education to improve their performance and employability, Philips will also facilitate this need to the best of their ability. Such additional educational requirements can, for example, relate to personal development courses (personal assertive training), language courses (mainly English) or computer skills (Word, Excel).
New participants who are unskilled and lack vocational education follow a ‘learning/working route’ for two years. They start with a theoretical learning period, either in the process industry, metal industry or logistics. Following this formal training period of one year, they go on to practice their skills in the company during the second year of their employment scheme. For the duration of the entire training programme, participants receive formal education in order to obtain the necessary qualifications to work in the area involved. If they successfully finish the training course, they receive a nationally recognised certificate.
About half of the scheme’s participants follow the one-year work experience route, and the other half follow the two-year ‘learning/working route’. The following figures refer to all participants of the scheme. In 2005, 235 apprentices entered the project. The participants’ average age was 34 years and 67% of the participants were men. This high percentage of male participants relates to the type of work experience offered, which is mostly in male-dominated occupations. Most young participants are immigrants, unskilled and with limited opportunities in the labour market. Generally speaking, they dislike learning and going to school. Over time, specialised learning methods have been developed to work with unskilled workers. In addition, language lessons became part of the project. In terms of the time participants have been unemployed, this varies with 70% of the participants having been unemployed for less than one year, 15% were unemployed for one to two years, 8% for two to four years and 7% for over four years. All of the participants receive an allowance based on the minimum wage.
Those participants who follow the learning/working route receive counselling or coaching from the reintegration service during the training programme. As part of the scheme, a personal development plan is established for every participant, setting out their objectives in terms of learning, work experience and communication skills, as well as the skills required for job interviews and other issues that might need attention. On a regular basis (about four times a year), participants meet a professional from the reintegration service to assess their progress in relation to the development plan. Some participants need more intensive coaching; in these cases, coaching interviews are held with the participants.
Once the participants have finished the training scheme, the reintegration services continue to monitor their development for a certain period of time. During the first six months following the completion of the training programme, participants continue to receive counselling and coaching to help with their job search. After one year, all participants receive a questionnaire to ascertain if they have found jobs. All of these activities are carried out by the reintegration services.
A formal agreement on the Philips Employment Scheme exists between the company and the trade unions. Philips reports to the unions, informing them of figures on participants, target groups and placement results.
By 2004, over 11,000 people had benefited from the employment scheme. In general, about 90% of participants complete the training programme; however, the success of the scheme varies over time as it depends on the prevailing economic situation in the country. For instance, in the 1980s, having successfully completed the training programme, only 60% of the participants found a job. In the 1990s, this percentage increased to almost 80%. Apart from an improved economic climate in the 1990s, this increase was also due to a better orientation of the scheme towards the demands of the labour market, especially with regard to the demands of local projects. In 2005, the proportion of participants who found a paid job following the scheme was 74%, and 17% of these obtained regular employment at Philips.
Part of the employment scheme’s success is attributable to the support Philips receives from the reintegration services. Participants who follow the learning/working route receive counselling from these services. Some participants, who have particular difficulties such as personal problems or who have developed attitudes that are inappropriate for working life, are given special attention in the form of coaching interviews.
The specialised learning methods used in the learning/working route appear to be successful. Participants who had learning difficulties at school are able to study in the scheme. The success is in part due to the strong focus of subjects related to future occupation as well as the absence of subjects that would have little or no bearing in this regard.
An additional benefit of the scheme for Philips is the possibility it offers in terms of training and certification of Philips’ own workers. Following the theoretical part of the training programme, the participant is introduced to the production process to acquire the necessary work experience. During this time, an experienced worker of the company, without certification, supervises the participant, and after six months the experienced worker follows a course to obtain the necessary certification. During this period, the participant of the project replaces the experienced worker at the workplace.
Exemplary and contextual factors
The Philips Employment Scheme is based on agreements between the company and trade unions. It helps to combat unemployment and offers hope for people with limited opportunities in the labour market. Overall, the cooperation with the reintegration services has led to a successful project, with measurable results.
Swenneke van den Heuvel, TNO, Hoofdorp