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Jul 30, 2014

Rundle: how job application scheme will kill the Coalition’s base

The government wants job-seekers to apply for 40 jobs every month. All well and good, but what about those businesses that have to process them all? Crikey's writer-at-large crunches the numbers.

Guy Rundle — Correspondent-at-large

Guy Rundle

Correspondent-at-large

The Abbott government’s new scheme to compel the unemployed to apply for 40 jobs per month will add a minimum of six work hours per month in added costs to businesses, analysis by Crikey has shown. For businesses that are actually advertising vacancies, that cost will skyrocket, potentially to dozens of hours per month — crippling the ability of small businesses to conduct their principal activities.

The figure varies according to the potential amount of time each employer is likely to spend considering applications, and how many businesses not currently receiving advertised vacancies will receive and process applications. Were one to consider only those businesses actually advertising vacancies, the costs rise dramatically, especially for small and micro-businesses.

Crikey conducted the analysis based on the recent report that job-seekers may be fined or have their benefits cut off for sending out mass or spam applications, and will need to prove that they are seeking individual work. The situation is particularly dire in high-unemployment states, such as Tasmania, home state of the champion of the scheme, Senator Eric Abetz.

Australia currently has around 830,000 people currently receiving unemployment benefit, which would suggest a raw figure of 33.2 million job applications being made per month under the new scheme.

However, a yet-to-be specified number of people will be exempt from this requirement because they are undergoing training and there will be a certain amount of non-fulfilment — so let’s bang this down to a mere 25 million applications. Let’s now assume that people send these far and wide — full letter and CV applications as required by the new conditions — to all employers.

There are around 2 million registered businesses in Australia, but many of these are sole proprietors billing as companies or multiple shell companies around a single real business. Let’s assume 1 million employment entities. By this absurdly abstract raw count, every business would receive 25 extra applications per month.

If we assume that every application will be taken seriously — and that is surely part of the social contract the government is proposing — then every application will take, say, 20 minutes to process, or 8.3 hours a month, a full working day. Assuming these are being handled by an HR staffer on $50,000, that would be $200/month, or $50/week in extra business costs.

But of course, these things won’t fall equally. Many of these applications from minimally qualified applicants with little work experience will go to the entry-level service sector, dominated by small (under 19 employees) and micro (under four employees) businesses.

Let’s look at Tasmania, with the highest unemployment rate. The state has 18,500 unemployed looking for full-time work, who would generate 740,000 applications per month. It has around 25,000 businesses in the service sector — but assuming sole traders and shells, we can bust that down to 15,000 companies. Since small businesses employ 45% of the overall workforce, let’s say they’ll receive 300,000 of these applications (in reality, it will likely be more).

Thus by this reckoning, every operating small business in Tasmania — whether it has advertised or not — will receive an average of 20 job applications per month, generating, by the implied social contract, 400 minutes, or 6.67 hours of extra work per month. That is less than the nationwide business average, but we’re talking about companies with one or two employees. Even if they don’t spend a great deal of time on these applications — and many, being decent people, will give them a read — the actual task of processing them will chew up time in a business day.

But the position gets terrifying when you limit this process to companies that are actually advertising vacancies. Seek.com.au currently has 78 vacancies in various service and unskilled sectors for the whole of Tasmania. Let’s multiply that by three for other sources — local papers, word of mouth, milk bar windows — and assume that those 234 vacancies receive two-thirds, 67%, of the applications. That is half a million applications per month for 234 jobs, or 2136 applications per job.

Note that even if we radically reduce this in favour of the government’s scheme — halve the number of unemployed actually receiving the dole, halve the number applying for these jobs, keep the generous job number the same — then we get 500 applications per job per month. Each application considered properly would add 10,000 minutes, or 167 hours, per month to staffing duties.

Even what will actually happen — staff giving a cursory glance to see if applicants are eligible, furiously clearing inboxes, chucking letters, hustling people off the phone — can be costed at, say, three minutes an application, or 1500 minutes, or 25 hours, per month. To go to the very basement of simply fending off job-seekers, let’s average a minute per application, or 500 minutes — and we’re back to 8.3 hours a month again, simply to deal with an extra imposition that the government has placed on a small business.

Yes, there’s a lot of assumptions in here. But none of them are unreasonable assumptions, and in every case, we’ve adjusted in the government’s favour.

What it shows is several things: first, the scheme won’t work if it assumes that every application will be taken seriously — and thus, it’s a cynical betrayal of the unemployed, especially as multiple rejections or non-responses is a key factor in grinding people down into hopelessness. Second, the scheme works against a basic principle of HR, which is that you design a job ad to discourage those people who simply aren’t qualified for applying — a successful ad is one in which everyone who applies could potentially move to the interview stage. Third, it is far more costly — even crippling — to small business, as compared to big business, many of which have HR departments with spare capacity. Fourth, that effect is magnified for areas with high unemployment due to the structural effects of peripheralisation, such as Tasmania, rather than some imagined work-shyness of the local populace.

Genius, really. You couldn’t get a more-rusted on sector of Liberal voters than small business proprietors, but Senator Erica and the rest seem determined to pry them loose. Hitherto, they had nowhere to go. Now, somewhere up in Coolum, Clive Palmer is riding the T-Rex and laughing his nads off.

*With additional research by Karen Palenzuela

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42 comments

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42 thoughts on “Rundle: how job application scheme will kill the Coalition’s base

  1. seriously?

    This scheme is either the height of stupidity or a masterstroke,

    On the stupid side, the idea of making unemployed people apply for an average two jobs a day must have been conceived by someone completely removed from reality if they think the world can actually work this way. The only way to (try to) fulfil this obligation is to apply for many jobs you aren’t qualified for (I’m not even talking about jobs that you would prefer not to do). How can this help get people in work? And yes, employers will be flooded with a mass of “junk” applications no matter what spin Eric and Joe put on it. Plenty of crap comes through on the internet as it is.

    The genius behind the scheme is whilst the coalition may LOOK like they are trying to simply get people back to work, it will merely result in many, many, unemployed people who are genuinely seeking, being disqualified from receiving benefits as it is far too onerous to comply with – if you are trying to genuinely comply with the scheme that is (and frankly it is just plain dumb).

    I won’t go into the waste of resources in bureaucrats having to administer a scheme to see if people made 40 GENUINE JOB APPLICATIONS A MONTH WITH THE ASSOCIATED BADGERING OF EMPLOYERS TO CHECK FROM THEIR SIDE THE BONAFIDES. Good one Eric.

  2. David Hand

    I guess you are saying that the scheme is a stupid waste of time, Guy. Here’s a surprise. I agree with you.

    Your own analysis is great for a comedy skit or a bit of revelry down at the pub on the back of a beer mat. The short answer is that businesses will not give each applicant 20 minutes. For unskilled jobs, they will select one of the first 10 applicants and reject every subsequent application regardless of merit. Most applicants will simply get automated rejection emails.

    This may well prove the government’s policy to be unworkable and stupid, which it almost certainly is. But small and medium businesses are pretty good at devoting time to the important stuff like serving customers and collecting payments.

  3. Terrence John Snedden

    The Abbott government’s punitive demands on the unemployed further victimises the majority of citizens unfortunate enough to have been put in this unwanted predicament by circumstances beyond their control. The proposed measures are part of a deliberate strategy designed to be cruel, degrading and demoralising to the unemployed, the sick, the young, the aged. Equally however these measures are designed to induce compliance by way of anxiety and fear among those citizens presently outside these socio-economic parameters to forgo their rights to justice, fairness and any expectations that threaten the interests of multi-national corporations and wealthy elites. To those citizens that believe they are safe, protected from the mistreatment being metered out by the Abbott government, listen carefully for the crack of the whip around your ears. Wait for that late night knock at the door. It’s coming. The upside is that unless Murdoch/Abbott decide that Australian citizens are incapable of determining national priorities and refuse to hold democratic elections – the hurt and pain imposed by this regime can be ended in just over 2 years. An excruciating reality but not devoid of hope, yet.

  4. rossco

    The whole idea of having to apply for 40 jobs a month is completely dumb, and just imposes an unreasonable burden on the unemployed and employers. But in looking at the number of employers affected we should also include the public sector, including local government. They will also have to deal with unsolicited, unwanted and unsuitable applicants.
    I suggest the unemployed include in their 40 applications every LNP MP, every month. See how they like it.

    Although I did notice that Abbott is now saying this is just a proposal in a draft policy being put out for discussion. I think that is code for saying we will drop this as soon as we can.

  5. Pedantic, Balwyn

    Based on Crikey figures Australia Post will gain a windfall of nearly $20 million per month in stamp revenue. Add to this the costs of paper, envelopes, writing implements or printer ink at a conservative, no pun intended, at 25% of mailing costs add another $5 million, so total cost of $300 million p.a. just to send the letters. Without a single response from an angry prospective employer

    Yep, we have a bunch of mental giants running the country.

  6. Andrew Lindsay

    What about the other direct costs to the worker on benefit payments? For 40 letters a month, what is that in postage and printing costs? Lets say every letter is a 1 page letter and a 3 page CV, printing costs etc are going to be a significant cost for people. Also, how is the government going to track that people are sending the applications? Does everyone receiving an application also have to log that they have received an application? If they do, then I would be applying to become an office worker for the PM’s office.

  7. Sammy Banfield

    I have doesn’t a whole day driving around to drop of resumes & fill in application forms at aged care facilities. Petrol costs money that young unemployed people under 30 will to be able afford to chase up job opportunities. It already pushes me to my limit…

  8. Iain MacPhail

    Only a privileged person who never had to make a cold call job application could come up with this dumb, insensitive, and thoroughly negative scheme. Abetz wants to “rub their noses in it”; a punishment that benefits no-one.
    I worked for fifty years on short-term contracts, and I never fully coped with the responses elicited by an ill-directed job application. I know many literate, sensitive, and able unemployed folk who will be even further crushed by this senseless dictate.
    Perhaps the Senator could spend some time on the phones of Lifeline, or Beyond Blue.

  9. CML

    Good one, Guy – at least for a laugh! If you didn’t do that, you’d cry over the stupidity of it all.

    Just proves that the lunatics have finally taken over the asylum!!!

  10. Stuart Coyle

    This does not address the problem of under employment at all.
    There are many working in highly casualised industries who need assistance for a month or so between jobs. If they are forced to wait six months for the next pay, their only other option is to demand a higher pay rate from employers to cover the time between jobs.

    I spent 20 years working in the entertainment industry, this is going to make it very hard for that industry as well as for hospitality. I found it difficult keeping a good casual crew because of the seasonality of the work. if people cannot get any assistance in the quiet times they will be leaving the industry for some (probably non-existent) full time jobs.
    There is no point applying for 40 jobs a month when you are a stage hand, there are not even 4 decent employers in any large city for you. These sorts of industries are going to lose all their skilled people.

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