Job Placement Activities of Manpower Programs in Newark, New Jersey

Published by the Government Accountability Office on 1971-12-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                 WASHINGTON, D.C.    20548

CIVIL DIVISION                                                   DEC 1 6 1971

       Dear Mr. Zarb:

            We have reviewed job placement activities carried out by the various
       federally assisted manpower programs operating in Newark, New Jersey.

           During the past several years substantial financial and manpower
      resources have been directed toward improving the employability of and
      providing employment opportunities for disadvantaged Newark residents.
      However, there has been very little information provided to program
      planners and administrators to assess how well these resources have served
      to aid disadvantaged residents in obtaining and retaining suitable employ-
      ment or to suggest ways in which these resources could be better applied
      to more effectively achieve program objectives.

           The records of the 18 manpower programs directed toward improving the
      employability and providing employment opportunities for Newark residents
      showed that about 8,200 placements were made during calendar year 1969; 16
      of these programs, accounting for about 6,400 placements, received Federal
      funds. Because of variations in funding periods, precise data on the
      amount of Federal funds provided during calendar year 1969 was not avail-
      able; a Department of Labor consultant estimated however, that about $15
      million annually had been provided for manpower programs in Newark.

            We reviewed activities of the 9 manpower programs (see enclosure for
       details concerning these programs) with the largest number of reported
       placements--about 6,100 of the approximately 8,200 total--during calendar
       year 1969. The nine programs can be generally categorized as follows:

             --Three institutional training programs which provided remedial
               education and vocational training to unemployed and underemployed
               persons before placing them in jobs.

             --Three employer subsidy programs which offered the possibility of
               immediate, regular employment, with on-the-job training and certain
               supportive services supplied by the employer.

             --Two direct placement programs, one of which provided brief work
               orientation sessions to some disadvantaged persons before placing
               them directly in permanent jobs, and the other which placed
               disadvantaged persons directly into jobs.

             --A program which provided work experience and supportive services to
               disadvantaged youths, usually school dropouts.

                              -50TH ANNIVERSARY     1921-1971t
     As part of our review we interviewed officials and reviewed program
documents, reports, and placement records at the offices of local program
sponsors, Federal and State agencies administering programs, and partici-
pating businesses in Newark. To obtain an independent verification of the
placements reported and information on job retention, we sent question-
naires to the employers of 1,050 placements chosen at random and received
post-placement information for 987 of the placements sampled.

     Our review showed that (1) there was no central source that maintained
placement data for all programs, (2) many persons reported as placed never
reported for work, (3) the majority of persons placed did not remain on
their jobs longer than three months and (4) accurate information on the
number of disadvantaged persons placed in jobs was not being provided. We
concluded that the impact of manpower programs' placements on the unemploy-
ment situation in Newark was not as substantial as the placement data would


     The local Cooperative Area Manpower Planning System (CAMPS) which was
established in Newark and in many other locations throughout the Nation
was intended as a mechanism for coordinating the resources of the Federal
agencies most directly involved in manpower activities with those of State
and local agencies and for planning the development of these resources to
meet manpower needs. Under this system an attempt was made in Newark to
consolidate manpower information by encouraging local manpower program
sponsors to furnish information on their operations, funding, and placements.
This information was intended to provide a framework within which the area
and State committees might develop combinations of manpower services
tailored to local needs. However, the program sponsors in Newark did not
provide accurate information in sufficient detail to permit meaningful
evaluations of job placement activities by the Newark area CAMPS committee.

     Since there was no centralized source that maintained adequate
placement data for all programs in Newark, it was necessary for us to
obtain the data from the organizations sponsoring the individual programs.
Several of the sponsoring organizations utilized the services of the New
Jersey State Employment Service for making placements, while other sponsors
placed their own program participants without extensive coordination with
other organizations. The extent of documentation supporting reported
placements varied among the organizations; we were able to obtain documenta-
tion for about 5,700 of the 6,100 placements reported by the 9 programs we

     It is our view that the use of consolidated placement information from
the many programs established to aid the disadvantaged in Newark would
enhance the abilities of both program administrators and the CAMPS committee

                                                                      2 -
to provide needed comprehensive manpower services by allowing assessment of
the total impact of such programs on the employment problems of the


     We recommend that the Assistant Secretary for Manpower require that
placement information be obtained by one designated entity, for all
Department of Labor programs serving disadvantaged Newark residents and
that this information be made part of the Manpower Administration's manage-
ment information system. We recommend also that, as the official
responsible for most manpower activities in Newark, the Assistant Secretary
encourage all other Federal and non-Federal entities sponsoring manpower
training programs in Newark to furnish the designated entity with informa-
tion on individuals placed by their programs. These recommendations should
be considered for implementation at other locations throughout the country.


     In 110 of the 987 employer responses to our questionnaires, the
employers stated that they had never hired the persons who according to
the manpower programs' records had been placed in jobs with these firms.

     On the basis of the results of our sample, we estimate that about 12
percent or 690 of the 5,700 placements which we identified at the 9 man-
power programs never reported for work. We projected, based on the results
of our sample that about 350 of the 690 were reported placements of the
Human Resources Development program--a direct placement program; except for
the 2 on-the-job training programs all programs had recorded placements of
individuals, who according to the employers, never reported for work.

     Our review showed that the recording as placements, individuals who
never reported for work occurred because: (1) no attempt was made to verify
some placements, (2) some employers notified the program sponsors when
applicants were hired but before they started working (erroneous recordings
of placements resulted in instances when applicants failed to report for
work), and (3) some persons who were referred to employment advised
sponsor personnel that they had worked or were working but verification
was not made as to whether they were employed in the job recorded in the
sponsors' records.

                                                1of individuals who never
     For the most part the recording as placemeps
reported for work occurred in the programs whose placement activities were
the responsibility of the New Jersey State Employment Service.

     The Employment Service recorded a placement after it received
notification from the employer that the individual referred by the
Employment Service had been hired. Employment Service officials believed

                                                                     - 3-
that in many instances where the individual failed to report for work the
employer had notified the Employment Service after he had hired the indi-
vidual but before he actually reported for work, a practice contrary to
Employment Service instructions to employers.


     We recommend that the Assistant Secretary for Manpower require manpower
program sponsors to implement procedures for verifying reported placements.
We recommend also that the Assistant Secretary for Manpower require the New
Jersey State Employment Service in Newark to emphasize to employers that a
placement should not be reported until the individual referred has started


     The responses to our questionnaires showed that about 60 percent of
the calendar year 1969 placements which we tested retained their jobs for
3 months or less. On the basis of projections which we made from the
results of our sample, the length of retention for the 5,000 placements
(this total excludes the 690 invalid placements) approximates the following:

                                                          Number of
     Retention period                    Percent          placements

     1 week or less                        17.3               865
     Over 1 week to 1 month                21.9             1,095
     Over 1 month to 3 months              21.1             1,055
     Over 3 months to 6 months             12.4               620
     Over 6 months                         27.3             1,365
          Total                           100.0             5,000

     Persons placed by the two direct placement programs experienced the
shortest job retention. These programs accounted for about 3,200 of the
5,000 placements. We estimated that 51 percent of these or about 1,635
left their jobs within 1 month and that 72 percent or about 2,300 left
their jobs within 3 months. The persons placed by these two programs did
not receive training, and many of their jobs were characterized by low
starting salaries, two factors which may have significantly influenced
job retention.

     Further analysis of the results of our sample show that 60 percent of
the placements made by the training and work experience programs remained
on their jobs longer than 3 months. About 46 percent of those placed by
the training and work experience programs were still employed after 6 months
as compared to only 17 percent of direct placements who were still at their
jobs for the same period.

     Employers provided starting salary data for 808 of the placements
included in our sample. The data showed that 335 placements, about 40 per-
cent of the total, were in jobs paying less than $2.00 an hour; 174 of
these placements were made by the direct placement programs. Not only did
the direct placement programs make most of the placements at under $2.00
an hour, our sample indicated also that about 45 percent of all their
placements were under the $2.00 rate.

     Officials of the New Jersey State Employment Service's Newark office,
which is primarily responsible for placements in both direct placement pro-
grams expressed the belief that the low retention rates occurred because
(1) the programs dealt primarily with the most disadvantaged persons in
Newark, (2) the available jobs were often the lowest paying and the most
menial, and (3) the applicants were often placed directly without the
benefit of training and extensive pre-employment services.

     The value of training in achieving improved economic status has long
been recognized, as has been the holding power of a job which has a salary
level sufficiently high to satisfy the individual's needs and desires.
Thus, when untrained persons are placed in low-paying jobs, it is not
surprising that large numbers of these persons soon terminate employment.

     To the extent it is considered necessary to place untrained
disadvantaged persons in low-paying jobs, persons so placed should be pro-
vided needed supportive services while working at these jobs, and should
be further considered for training opportunities which would eventually
lead to increasing their earning power.


     The 5,684 placements that we identified at the 9 manpower programs
represented placements for only 4,544 individuals because:

     --In 961 instances the manpower program sponsors recorded the same
       individuals as placed more than once during 1969. For example, 10
       individuals in the Human Resources Development program were placed
       a total of 69 times.

     --In 179 instances more than one manpower program sponsor recorded
       the same placement.

     We understand that the Department of Labor's current reporting system--
the Employment Security Automated Reporting System (ESARS)--provides for
reporting based on individuals served rather than on counts of transactions
(such as "placements").  Implementation of ESARS should substantially
correct the reporting of multiple placements. The consolidated reporting
and improved verification procedures recommended herein should help to
correct the duplicate reporting problem.

     We wish to acknowledge the cooperation given to our representatives
during our review, and we would appreciate receiving your comments on
actions taken or planned.on the matters discussed herein.

                                      Sincerely yours,

                                      Henry Eschwege
                                      Associate Director


The Honorable Frank G. Zarb
Assistant Secretary for Administration
Department of Labor

cc:   Secretary of Labor
      Assistant Secretary of Labor
        for Manpower
      Manpower Administrator
      Deputy Manpower Administrator
      Mr. David Williams, MA
      Mr. Edward McVeigh, OASA
      Mr. Edgar Dye, OASA
      Mr. Wayland Coe, OASA

                                                                   -   6-

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