The Irish Government are investing €50m in subsidies for employers who give jobs to long-term unemployed people, in the hope of creating around 5000 jobs and reducing the numbers on the live register. The scheme will start in June of this year and will see the State contribute one euro for every four to wages in the hopes it will encourage employers to create positions or fill vacancies they would otherwise be unable to afford.
It is expected that the largest sectors to make use of the Jobs Plus scheme will be manufacturing, services, and tourism. The scheme is part of the Government’s plans for action in job creation 2013. The Jobs Plus scheme will allow employers to avail of up to €7500 for filling a vacancy with a person who has been unemployed for over a year. If an unemployed person of over two years is hired, then companies may receive up to €10000. The payments to employers will be made over a two-year period.
The Minister for Jobs Richard Bruton stated that the current scheme, whereby there is a PRSI free allowance for employers hiring the unemployed, would wind down and be replaced by this new pilot scheme. It is hoped that a dramatic increase in jobs, (possibly three or four times the 1200 jobs created last year in 2012) will reduce unemployment figures. This will leave the Government liable to pay up to €50m to organisations that come on board to employ unemployed people through Jobs Plus.
This scheme will run along side the current government target, which is the creation of 100,000 jobs by 2016, as laid down two years ago.
How the Plan Will Work
This direct cash grant for organisations simplifies the complexities of other job-assist schemes and will allow firms to claim the allowance one month after salaries have been paid.
The action plan will see another 5,000 jobs created with a €70m fund. This will specifically be aimed at reducing energy costs in the public sector and businesses.
As part of the overall job creation plans, reforms for work permits will attract foreign workers, and an extra 2,000 ICT graduates will be available to the computing industry. Colleges are also part of the scheme and a target to turn out an extra 2000 honours graduates by 2018 is set firm in the plan.
The level of job creation was unsatisfactory in 2012 and the State has promised to double efforts under a new 333-point action plan linking in 16 government departments.
What Industry Said
A mixed reaction was forthcoming to the jobs plan from industry. The small firms association, hoteliers, and Chambers Ireland were enthusiastic about the scheme. However, the construction industry identified only five actions out of the 333 promised related to construction. The employers group Ibec questioned why the increasing costs of doing business would not be addressed, along with Fianna Fáil. Sinn Féin said the Coalition over promised in the 2012 job plan, but under delivered.
With unemployment levels running at the third highest in Europe, all initiatives to get people back to work are welcome, but without proper training there is a danger of employers taking on unemployed people because it suits them to employ them cheaply without any proper career path and supplementary training. Without proper training especially for people who have been long term unemployed, employers may find that they do not have the increase in productivity they expect because of the transition time for someone who has been out of the work force for a long time. This scheme may well be a way of employers being able to “cherry pick” the best of employees, which of course is desirable but may well leave those less qualified or disadvantaged unemployed persons still no further forward.
This is why in addition to schemes of this type training at all levels must be an integral part of any job creation scheme. Unemployed people without skills and qualifications need to be given training in basic computer skills and health and safety to equip them for the market place.
While the Government are dealing in statistics, and making progress on some levels, unemployment remains unconscionably high, and needs to tackled. With the sheer number of training opportunities on offer, education for everyone is possible affordably. Employers need to realise that if they wish to avail of the Jobs Plus scheme then they must take the employment of long term unemployed people seriously and ensure they receive correct, proper training, and career development instead of being just a ‘cheap employee’.