The Marketization of Employment Services

Abstract

This book examines the marketization of employment services and its consequences in Denmark, Great Britain, and Germany. What concretely does marketization mean in practice? What are its effects on the services and their governance? How does marketization and its effects map against the main ‘regime types’ found in comparative social science? These questions are answered using more than 100 qualitative interviews with policymakers, managers, and front-line workers. The qualitative material in the book shows how transactions are structured by the public authorities that fund the services and how managers respond both collectively as a sector and individually in organizing services. The book does so within a framework that allows both within- and between-country comparisons. Employment services are used as a window into the much larger phenomenon of intensified economic competition across Europe. These three countries have marketized their employment services in different ways, and the distinct trajectories are discussed. We define employment services as government-funded services to move jobless people into, or closer to, paid work, with a public employment service as the responsible ‘public authority’. Marketization in this book is conceptualized in terms of the features of transactions that produce competition between providers. Providers of employment services are deeply affected by marketization, because it shapes the uncertainty and resource scarcity that they face. Marketization can lead to the disorganization of employment relations and the intensification of managerial control, and the quality of services is part of these organization-level effects. Marketization creates four dilemmas that lead to change in governance—price versus quality, payment-by-results versus equal access to services, user choice versus user compulsion, and transparency/openness vs transaction costs. Failures of the work-first welfare state are due in large part to the failures of marketization.

Market Exposure and the Labour Process: The Contradictory Dynamics in Managing Subcontracted Services Work

“…Price-led competition between providers combined with clients’ intensified search for cost gains are held to result in a process of ‘marketization’ of the employment relationship. Contracting between parties seeks to predetermine many aspects of the employment relationship and repeated, cost-reducing transactions (Greer et al, 2017) add pressure to secure efficiency gains through reducing wages and employee benefits and increasing work intensity. To better understand these processes, relevant research on the sociology of markets has examined two key aspects, namely: (a) the mechanisms through which market actors make and reinforce market pressures through contract specifications; and (b) the mixed effects on markets in different regulatory environments of actors’ rule-taking and rule-breaking actions (Coe et al, 2009; Doellgast et al, 2015; Jaehrling and Méhaut, 2013).…”

Creaming and parking in marketized employment services: An Anglo-German comparison

“…Services were increasingly standardized in part because the funder developed a national catalogue of more than 40 off-the-shelf courses or schemes (‘ Standardprodukte’ ) (funder B). At the end of the research, the Bundesagentur reported concluding 13,000 contracts per year worth €2 billion (presentation, Düsseldorf, 24 April 2015), the largest market in our sample, albeit one in decline owing to austerity and less unemployment (Greer et al, 2017: Appendix C). Figure 4 summarizes this contracting market.…”

“…But a core NPM principle is the blurring of boundaries between for-profit and government (or nonprofit): non-commercial providers face pressure to become commercial. In new commercial organizations, work does not have to be deskilled or intensified, and worker representation and professional qualifications do not have to be marginalized, because tight management control systems exist from the outset (see Greer et al, 2017).…”

“…Greer et al (2013) find that the introduction of market mechanisms led to a wave of privatization of German hospitals, which led in some cases to conflict and the derecognition of collective agreements and in others to intensified labour-management cooperation. In German employment services, collective bargaining and works councils persisted in relatively protected market segments but were absent from highly disorganized institutions in more volatile segments (Greer et al, 2017). This within-country diversity is one reason why studies detect no ‘varieties of NPM’ corresponding to the typologies of welfare regimes or comparative capitalism (Bach and Bordogna, 2011).…”

“…The British Work Programme is for some observers the paradigmatic case of marketized employment services (Jantz et al, 2015), and this is reflected in the transaction. Prices were set through competitive bidding at the scheme’s outset, and the firm with the highest market share – Deloitte Ingeus – was the one that offered the deepest discounts (Greer et al, 2017: Appendix B). While the government predicted £500m in annual volume, funding was roughly half that owing to discounts and the number and kind of placement outcomes (NAO, 2014).…”