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Wage Incentives
Emma_Waughman
Posts: 12,978 Forum Member
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When I went to sign on today my advisor gave me a little card about how a employer can get a cash bonus if they employ a young person who has been been on benefits for 6 months. She advised me to put it onto my CV or a application form etc.
This made me think and I realised the employer could employ you just for the extra bit of cash and not your skills. Is this misleading for employers? Is this fair?
Please let me know.
This made me think and I realised the employer could employ you just for the extra bit of cash and not your skills. Is this misleading for employers? Is this fair?
Please let me know.
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you should be the one getting the cash bonus for getting work
how do you know they won't employ you just to get the cash bonus and then drop you afterwards?
Surely that is what wages are?
But this is open to being abused, There must be clauses that prevent it being though
The cash should be used instead on helping people get into work in the first place, paying for college courses (real courses, not A4E tosh), or some such. Bribing employers to take on reams of unemployed young people for 6 months on minimum wage, only to lay them off after the minimum time period and recruit the next lot is just wrong imo.
It could alternatively be regarded as a compensation for the employer taking on someone who has been out of the work environment/ethic for some time so their performance might not initially be as high as someone who has been continuously employed. Sort of cancels out.
Agree with this actually, If used properly (Someone will abuse it sadly) It should help both parties for reasons you gave
if you are telling employers, how it is misleading? if you told them they could get money, but they couldn't, that would be misleading
as for the extra cash, as far as i know, the employer is paying out more money in wages and taxes etc, than they would get back as a bonus, so an employer wouldn't be getting someone for free, never mind getting someone free and getting money for it
why should it be the other way around? the bonus may persuade the employer to take a chance with someone long term unemployed and possibly with less skills and experience. they money may just go some way in regards to covering payment and costs of providing an employee or employees to spend time training the new employee. it can take weeks of one on one training for someone to learn skills of a job, that comes at a cost
you don't know if they will employ you for the bonus and drop you afterwards, but as they would be paying more in wages than the bonus it's unlikely. also if you do a good job the employer may want to keep you. also from the employee perspective they get wages, plus work experience and possibly training, and getting back into a work routine after a long period of unemployment, making them seem more attractive to other potential employers, and giving them the ability to gain a recent job reference
how much is the cash bonus and how much college courses would it cover? and what is the change of getting a job afterwards?
instead this is directly giving people jobs to which they will be paid for, gain experience and possibly training
it's a support structure to help you get a job, if you don't use it and you don't get a job as a result, it's you that's losing out. it's something there to help you
I think it's about £2000, and no I don't know the full accounts and how much college courses etc would cost, but I don't think it's a good use of taxpayer money to directly subsidize private employers.
It's not something to help an unemployed young person to get a job, it's something to bribe an employer to take on an unemployed young person. There's a huge difference. If I don't use it and don't get a job there's a million reasons why that could be. If I do use it and get a job, did I get the job because I was good enough or because I was cheaper? Even just mentioning felt like (another) slice of dignity was being taken away from me, it gives the application materials a tone of "I'm so desperate for a job/the jobcentre desperately want me off their books that the government will pay you to take me on", which if I was an employer I wouldn't look too favourably on.
To claim the full payment, an employer would have to employ someone for 30 hours or more per week, for at least 26 weeks. At minimum wage, the £2275 payment covers just under 12 weeks wages at 30 hours per week. What do you think most employers will do? In my experience, the main beneficiaries of such schemes are large corporations who will take on the young unemployed in droves, have them working for 6 months to receive the incentive, and then sack them all and take on another round. Essentially they're getting half-price labour thanks to Mr & Mrs taxpayer.
Don't get me wrong, I've got no issue with money being spent to help people into work, in fact I think more should be spent with more thought and consideration. But bribing employers isn't going to help in the long-term, and the help should be focused on helping the jobseeker to gain skills & experience to make them more attractive to employers both in the short term, and for a better long-term outlook. A series of 6-month stints in warehouses where the employer has had half the wages paid for them isn't helping anyone long-term.
do you have anything to back this up? having a look online I can see similar sums mentioned, but there are of course conditions attached, in that the employer must employ someone for at least six months and it's an apprenticeship (ie. proper accredited training has to be given). and on that basis if it's say a 35 hour contract at NMW the employer would still be paying about £5742 in gross pay, plus employers NI and potentially other benefits such as pension (remember pension auto enrolment). so even with £2,000 incentive, the employer is still paying more out in wages than they get in, plus they have to spend money in training the employee
once you get a better understanding of things, you might change your mind
this sounds like an uninformed opinion as opposed to fact
maybe one of the reasons you don't get a job is because these things concern you more than getting a job
but you aren't an employer, are you? right now are you even an employee?
have you ever been an employer? have you ever employed anyone?
it sounds like you are thinking about all the wrong things instead of the right things
do you have a link for this? you started off sounding unsure by saying "I think it's about £2000", but below you seem to be more certain. the amount listed below of £2275 was found when I googled for more info so perhaps it's the same scheme
not quite. you aren't taking into consideration national insurance, nor other payments such as pension (remember the new pension rules) - and of course a key condition of the grant is the employee must be employed for at least six months, so the grant is only covering part of the employees wage - less than half the employees wages over the six month period, and that's before you take into consideration the training costs to the employer
lot's of different things depending on the needs of each particular employer
to put things into perspective, how many of these 6 month placements have you actually been on? there are a huge number of employers who will all act differently
as for your costings, the employer isn't getting anywhere near half price labour once you factor in all costs of employment and training. and that's just for a start
once you factor in the costs that the individual could have got if they had remained unemployed on benefits for the six month period, they could have received more in benefits than the total amount of the grant. plus as an employee, even on NMW they go from claiming unemployment benefit, to paying tax and national insurance, with the employer contributing further national insurance contributions. so whilst the employer gets the grant money, some of it is paid back to HMRC via PAYE, on top of the savings from not having to pay JSA
in addition to all of this, the employee has gained worked experience and possibly skills, and even a permanent or fixed term post at the end of the six month scheme period. if the employee remains employed and off benefits then that grant money is worth it
you also have to consider who the greatest tax payers are - it's employers who contribute the majority of taxes directly and indirectly such as through VAT, property taxes, PAYE, duty, corporation tax, and of course as a result of the wages employers pay to staff, the individuals are then able to pay more in tax as a result of VAT, council tax, etc
so the bottom line is some of the tax that comes from employers is being used to help stop money being spent in benefits, and help individuals become taxpayers, and the schemes can make financial sense for the economy
well that was your opinion, but now it's been explained, what is it now?
as explained above the employer isn't getting half the wages paid to them. once you factor in the grant money and the taxes paid from the employees wages, it's considerably less, and that's before the costs of training are taken into consideration, or the long term gains of the employee
All the information I got re: wage incentive was from the gov.uk website here: https://www.gov.uk/jobcentre-plus-help-for-recruiters/other-employment-schemes
No mention is made with regard to training, although I concede I didn't factor in NI/pension costs.
My point was that I feel as if the wage incentive scheme is bribing employers. There are some who will use the scheme sensibly, but there are some who will exploit it for all it's worth. Personally I've not been on such schemes, but I have worked very closely with job centres/A4e and the like and I've seen such schemes in place and exploited. And despite your explanations, I still feel it's tantamount to bribery. At best it's subsidizing wages for private employers, maybe not to the tune of 12 weeks but it's still a sizable chunk of the wage bill being paid.
And not that my employment status has any relevance, but I am fully employed and have employed people in the past. The wage incentive scheme was recommended to me a few months ago when I was looking for work, but I declined to mention in any my applications and it seemingly had no bearing on me finding work as I was gainfully employed within 2 months of losing my previous job.
I'm going to bow out now and leave this thread for those who want to give the OP advice/input into their decision whether or not to use the wage incentive scheme in their search for work as is the reason for the thread, rather than a dissection of my personal opinions about the scheme.
so basically you've had no hands on experience in being on any of these schemes, so as such you aren't perhaps the best person to speak of them
as for your choice of words, bribery is usually used when referring to an illegal transaction, and there is nothing illegal about this scheme, and it's certainly not those offering the "incentive" that you consider a "bribe" that are acting illegally, so how you could consider it a bribe I don't know. with many schemes and setups there may be some who try and take advantage, but that's not the intention of the scheme. and as the figures point out, it makes good economic sense for such schemes to exist for the country as a whole, and over all it's better than simply paying the same sums or more in benefits with nothing gained in return
it's great that you didn't need to use the scheme, however the one you linked to, and the others I was aware of after checking were only available to those who had been out of work for 6 months or more, so if you gained employment within 2 months of losing your last job you would not have been eligible to the scheme
however some people may be longer term unemployed and require all the help they can get to get back into the workplace, and a scheme like this may give some people that small step back into work again. if you have two similarly low skilled workers with similar career history, but one was unemployed just a few weeks, whilst the other was unemployed for over a year, there is often a tendency for employers to avoid the person who has been unemployed the longer period as they have been out of the cycle of work for longer, and there is often a view that if that person was a great worker they would have got a job before now. so having a financial incentive for the longer term unemployed helps balance the disadvantage they may have had before it, and as far as the greater economy is concerned it's often better to get the long term unemployed back into work instead of sending them towards a long period of benefits
that's fine. hopefully the points you've raised and the answers I've given will help the OP make a more informed decision