The unemployment rate in South Africa is extremely high and it seems to only be getting worse. How does this affect the job market? This puts a lot of strain on every component involved. Here are some of the effects, risks and benefits. In previous decades’ adults of working age who were unemployed were unemployed because of a bad attitude, incompetence, misconduct, laziness etc., but is that still the case?
What happens when a person is unemployed for too long?
Unemployment, especially long term not only affects the economy and job market but also the candidates emotional state. With more time passing they become more discouraged and desperate, and it shows in interviews. Their anxiety, stress, hopelessness increases; while their socializing, networking, determination and finances decrease. The probability of finding a job declines the longer a person is unemployed. This is because some employers also tend to discriminate against those with longer unemployment records which makes it harder to get into the workforce as they are wary of the risks as well as loss of skills over their unemployment period.
Do unemployment benefits help or make things more difficult?
There are opposing debates on this subject, with results also changing geographically depending on social norms in the countries but the biggest arguments are:
- Pro benefits: It helps workers avoid large wage drops and they have more time to search for something suitable rather than taking the first job they are offered.
- No benefits: The person might hold out for something better, which is not guaranteed to come along. They might stop looking for a job completely and never get back into the workforce as they are getting some money and have learned to survive on it. The unemployment rate is also higher for longer.
What to determine?
- Has the candidate been out of work excessively long compared to others at their level?
- Are they repetitively jobless?
- Do they have a habit of resigning and leaving their employer in the dust with little to no explanation or notice?
- When they get downsized is it “for cause” or due to organizational changes? (bad economy, company merger, position eradication, etc.)
- Did they resign with immediate effect to avoid disciplinary action and are now unemployed?
- Are they unemployed due to disciplinary actions against acts of misconduct?
- Are they unemployed because they were dismissed? If so, take extra care to determine what really happened.
Other recommended questions to ask candidates
- How have they been keeping their skills up to date?
- Why were they unemployed for this long? (They might have a good reason like taking care of a loved one through diseases etc. or struggling to find work in a bad economy); and
- What did they do to stay busy while they were unemployed?
What are the risks of hiring an unemployed person?
There are always risks when employing a candidate who has been unemployed for a long period of time. Here are some of the risks:
- They have accumulated a lot of bad debt. In order to survive or because once the employer submits the monthly UI19 information to the Department of Labor. It takes 3-6 months for creditors to receive such information and for the legal system to issue an Administration Order for outstanding debt which can cause the employee to obtain bad debt;
- There might be a risk that makes the employee a risk to a position of trust. They might try to use unsavory methods to get rid of their debt which puts the company at high risk;
- They might have lost some or many of their skills which means they need to be trained again or take longer to do their job as they need to remember how to do it; (out of date) and
- The company might have a good employee who has been with the company for a long period time and is supporting a family of unemployed people which puts the employer at risk.
What are the benefits of hiring an unemployed person?
There are some benefits to hiring unemployed candidates over passive job seekers. Here are a few:
- The employee can be very grateful and loyal to the company and might want to rebuild their employment history;
- They may be more willing to take on extra duties and work additional hours for less pay; and
- The unemployment number lowers with every person hired, which in turn helps the economy and job market.
- Ask as many of the questions listed above;
- Keep an open mind, not every unemployed person has a lot of debt or are lazy and incompetent;
- Before hiring an employee, do a full background check to ensure they are who they claim to be and won’t put the company at risk; and
- Conduct frequent background checks on employees to be aware of their debt situation changes or if you suspect they are involved (or might be) in petty crime.