Zero Long-Term Unemployed Territory (TZCLD)
The “zero long-term unemployed territory” (TZCLD) project has at its centre the “Job Factory” which is a Job-Oriented Company (JOCs). Its purpose is to solve long-term unemployment by involving a methodological innovation (a new recruitment method based on a reverse process), and an organizational innovation (the creation of a firm with an employment objective and a horizontal management).
The project TZCLD was initiated by the association ATD Quart Monde (ATD Fourth World) in 2011, after being tested mid-1990 in Seiches-Sur-Le-Loir but not carried out to completion because the financing package proposed required a change in the French law. After ATD Quart Monde won the support of a Parliamentarian, Laurent Grandguillaume, who defended the project at the National Assembly, the “Zero long-term unemployed Territory” (TZCLD) association was created in October 2016 to pursue the project at a national level. A law was voted on 29 February 2016 to enforce the TZCLC project, and 10 experimental territories, financed for 5 years, were chosen in November. The project is currently in the testing phase.
The idea of the project is to be able to offer to any unemployed person in a given territory, a job adapted to his/her know-how, paid at the guaranteed minimum wage, based on an indeterminate duration contract, for a chosen period of time. Unemployed persons are hired by the JOCs, which are created for the purpose of this project. These JOCs fall within the scope of the Social and Solidarity Economy. They propose indeterminate duration employment contracts with guaranteed minimum wages. The unemployed persons create their own jobs on the basis of their know-how, their desires, and the needs of the territory. The jobs created must not compete with the activities of “traditional” incumbent companies.
Stakeholders & Beneficiaries
The main beneficiaries are the ten authorized territories for the testing phase. These territories are the following ones: Pipriac and Saint-Ganton (Ille-et-Vilaine), Mauléon (Deux-Sèvres), Thiers (Puy-de-Dôme), Jouques (Bouches-du-Rhône), Villeurbanne, Saint-Jean Disctrict (Rhône ), the Community of Commons (between Nièvres and Forests) (Nièvre), Paris 13th, the Community of communes Pays de Colombey and South Toulon (Meurthe-et-Moselle), the European Metropolis of Lille (North) and Colombelles (Calvados).
This experiment targets the long-term unemployed, who have been deprived of jobs or employees who have been in a reduced activity for more than one year. The eligibility criteria are i) to be unemployed for more than one year and ii) to be domiciled in the selected territory for at least 6 months. Around 1,000 to 2,000 people for the whole set of territories are expected to benefit.
This national project, and the corresponding local experiments, is carried out by a network of public and associative actors (such as regional and local authorities, the National Employment Agency (Pôle emploi); associations fighting unemployment and exclusion, Social and Solidarity Economy companies. In each of the authorized territories, a local steering committee is created. The committee includes the local authority concerned, a representative of the State, the National Employment Agency, employers’ and employees’ unions, ordinary companies and the person who will set up the company that aims to create employment, associations whose purpose is to combat unemployment and reduce social exclusions, and all representatives of the persons concerned by the project.
Co-creation process
This project comes from the associative world, the innovation process is bottom-up. The first experiment (1995) could not be completed because of legal rigidities. Thus, the members of this Bottom-up project had to find other associative partners to give credibility to the project, as well as the support of a parliamentarian so that the project could be validated by the government on a national level, and be launched. Therefore, at this stage, the innovation network moved to a top-down approach. Therefore, it is a nice process of co-creation of public services by the government at different levels and by a network of associations.
The TZCLD project includes the creation of Job-Oriented Companies, which objective is to provide long-term unemployed with jobs that meet their personal projects as well as the unsatisfied needs of the territory. The management mode of these companies is based on horizontality and transversality functions and participatory work. The management of the activity is done collectively, employees establish their working conditions. Jobseekers are project leaders. Every day, people innovate about how to work together.
Digital Transformation Process
The main innovation is a conceptual and social innovation, rather than digital transformation. This project applies to long-term unemployment, on a given territory, a business model already used to enable disabled people to work. This methodological innovation leads to organizational innovations (the creation of a job-oriented company); an innovative financial mechanism (the reallocation of unemployment-related expenses and costs to enable employment); and informational innovations (development of communication tools, management tools…).
Results, Outcomes & Impacts
Many (human, societal and economic) benefits derived from the TZCLD experiment. These expected benefits can be split according to the type of beneficiary:
– For the long-term unemployed, the benefit is gaining a “right to work”, in order to get out from exclusion. The experiment is still ongoing but the first observations indicate that the beneficiaries of the Hauts-de-France experiment have been reintegrated into society, at least at the civic level and through social ties.
– For local economic actors, the benefit is to have access to a potentially available workforce, This workforce accepts to do useful works that is not completely solvent on the market place.
– For the territory, the main interest of a JOC is to recreate territorial social links. As the local labor is locally prepared, this makes it possible to locate or relocate productions or services on the territory.
– For the economy of the country: On the economic level, JOCs contribute to taxes and social contributions, they create value. Permanent job creations boost purchasing power. It also reduce social problem issues such as health problems, school dropouts, etc).
Challenges & Bottlenecks
At the national level, the project met barriers from the financial administration which was reluctant to have to advance public funds without being assured of the success of the experiment. It was also necessary to convince the government and members of Parliament of the non-destruction of employment. It has been decided to create local committees to ensure this non-competition. This fear of competition has slowed down the start of this project. At the local level, the barriers may be human, financial technical and territory-related.
As for the challenges, one of the main is that jobs created must not compete with existing jobs. Also, when this experiment will be over, if the process continues, all partners/organisations who are currently concerned by indirect costs (such as social security) will have to pay the corresponding amount of money. Currently, the cost is covered by the territorial Fund. In each local experiment, researchers are currently working on indicators that will have to establish the social prevention that has been carried out on the territory thanks to this experience.
Transferability & Replicability
Given the difficulties related to territories, this project could be extended to other interested communities but not generalised to all territories. Sometimes, local authorities are not enthusiastic to create activities from grassroots contributions, they may be afraid of losing their authority. Thus, the success of the project depends on the involvement of the territorial stakeholders. The project can only work on the logic of volunteering. Such a system cannot be established by the government without the approval of the unemployed. This means that generalisation across the country will not be possible.
Success Factors
As the project is in the inception phase, it is not yet possible to evaluate its success. However, a large number of jobs have already been created. The number of contractual workforces from January 2017 to June 2018 in the 10 territories included in the project has increased from 33 to 564 people.
Lessons learned
The lessons learned so far will focus on the weight of the state regulation in this social issue, on the importance of building the project on existing links on local territories, on the nature of the jobs created by the JOC, and finally on the importance of the choice of the territory.
The first lesson learned is that social innovation including national social issues are impossible to implement solely with a bottom-up process. This type of project as TZCLD can only be achieved with the intervention of the government in terms of regulation.
Another important lesson is related to the importance of existing territorial networks to implement the project. The network of partners at the local level may be different from the national network of partners. First, because national partners do not always have local branches on the authorized territories, while partners must belong to the territory to take advantage of existing social links, and to favour the creation of links with other partners at the local level.
When it comes to the nature of activities created by the JOCs, it is necessary to clearly identify the role of each stakeholder of a TZCLD territory to send the long-term unemployed to the most appropriate structure according to its degree of exclusion, in order to avoid the destruction of value.
Finally, the nature and size of the chosen territory is an essential element for the success of the project. The local level creates social bonds that cannot be achieved at a macroeconomic level. The identification of needs, and of competing activities can also only be established on a very limited territory.