Today sees the launch of a new Social Impact Bond (SIB) called ‘Working in Germany’ (‘Werken in Duitsland’). ABN AMRO has joined forces with the border city of Enschede, Start Foundation and the social enterprise BOAS Werkt to launch the Bond in a bid to link up jobseekers in Enschede with employers in Germany. Enschede city council hopes the Bond, the world’s first cross-border SIB, will fund the intensive guidance of 138 jobseekers into suitable jobs on the other side of the border.
Ample job opportunities over the border
Enschede has an unemployment rate of 8.5% (source: Statistics Netherlands (CBS), May 2016). By contrast, the German region of North Rhine-Westphalia, just over the border, boasts near full employment, with an unemployment rate of just 3%. The number of unfilled vacancies is expected to rise in the coming years as large sections of the working population reach retirement age.
Few unemployed jobseekers from Enschede seem to find their way to the German jobs market unaided, and the SIB is an attempt by the municipality of Enschede, Start Foundation, ABN AMRO and BOAS Werkt to address this social problem. The SIB is targeting the 7,000 households in Enschede which are currently in receipt of unemployment or social assistance benefit.
Social Impact Bond: a social investment
SIBs are a new form of partnership between public authorities, private investors and agencies aimed at addressing social issues. Start Foundation and the ABN AMRO Social Impact Fund are providing the pre-financing for BOAS Werkt, to the tune of 1.1 million euros. BOAS Werkt is also underlining its commitment by providing 5% of the finance itself. The money will enable BOAS Werkt to help at least 138 jobseekers from Enschede to find work in Germany over the next 2.5 years. If the project is successful, jobseekers will be given permanent jobs with a German employer. The money saved on benefits by the municipality of Enschede will be used to repay investors. It is these investors who bear the financial risk of the programme, not the municipality. The results will be measured by the research bureau Kennispunt Twente.
The BOAS Werkt approach
Jobseekers who take part in the programme will first spend four weeks undergoing training at Kreishandwerkerschaft Steinfurt-Warendorf, a German partner of BOAS Werkt which provides training in a range of trades, including construction, metalworking, plumbing and welding. The training focuses on general technical skills, safety, German language and culture, differences between the German and Dutch working cultures and a visit to a German employer. This is followed by a practical placement and, if both parties agree, an employment contract for at least six months with that German employer. BOAS Werkt will oversee the entire process.