During this downturned economy, a lot of companies across the nation are inundated with applications from unemployed workers. If you have current job openings, there seems to be a dilemma facing the hiring managers. Do we hire people who have been out of the workforce for a considerable amount of time? Over 40% of the current workers who are without work have been unemployed for over 6 months. Dormant workers may be viewed by many companies as having poor work ethics, lack of initiative, outdated skills or other negative connotations. During an economy that is thriving, these considerations may have more merit. However, in the current economy, workers are facing some major challenges that have not been as prevalent in the past.
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In the past few years, many companies have migrated off shore to other places around the world. Some industries hit hard with downsizing, such as the mortgage industry, textiles, construction and more, have suffered huge losses in employment. Transferring job skills has become challenging. Simply put, a mortgage professional cannot fill in as an electrical engineer. Individuals may be required to relocate to places where their skills are needed or to enter training to qualify for a different job.
When considering whether to hire the long term unemployed, one of the factors that should be considered is the Federal Hire program that is currently in place. If your company hires someone that has not worked at least 40 hours for the last 60 days, you receive a 6.2% social security tax exemption for hiring that employee. In addition, if the employee remains employed with your company for at least one year, you also qualify for a $1000 tax credit. 4.5 million people have qualified for this program so far. While it is not a huge incentive, it can give you a reason to look over that resume of a long term unemployed candidate one more time. In addition, many states and other federal programs can provide tax breaks and incentives for hiring workers in disadvantaged zones. California’s Enterprise Zone program includes 42 reasonably large regions and hiring credit criteria currently includes over 13 distinct methods for qualifying employees for the credit. Similar to other programs, employees living in certain economically challenged areas, currently unemployed or those threatened with lay-off, military veterans, employees participating in various federal or state programs such as welfare, food stamps, etc. can generate credits up to $13,000 per year for an employer operating in a zone. Forty-two other states have state-level programs which entitle employers to credits ranging from $500 to $15,000 for each qualified employee hired. States with the most attractive programs include New York, Florida, Georgia, Arkansas, Kentucky, and Arizona.
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So what do you do as a company seeking to grow and hire new workers? Some employers have gone to the extreme and have even advertised that they will not accept applications from anyone currently unemployed. One should take into account the reasons this person may have been out of the workforce for so long. Even though they may have been unemployed for a substantial amount of time, their work ethic over their lifetime should be considered. It may make economic sense for your company to provide them with an opportunity considering that their work history and experience are a potential fit. This dilemma of hiring the long term unemployed is not something that is going to go away anytime soon. With the millions of people in this current state, this problem will be facing all hiring managers for the foreseeable future. How your company deals with this challenge may provide you with a separate stream of income and will also help to shape your work force for the days to come.
For more information on state and federal incentive programs, see the links below. In addition, there may be other state and local programs you can take advantage of in your own area.
http://www.doleta.gov/business/Incentives/opptax/
http://www.rurdev.usda.gov/rbs/ezec/
Workers.com specializes in recruiting highly skilled personnel for industrial positions such as CNC machinists, engineers, quality inspectors, programmers and more, both on a direct hire and temp to hire basis. Workers.Com. Rod Miller is a Division Manager of Workers.com Email rod@workers.com
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