Reasons to Hire the Unemployed

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Although there may be issues involving discrimination, some companies still will not even consider hiring people who are unemployed. There is a bias against the unemployed because of the general assumption that during layoffs, it is usually those who are the least productive who go first.

But as Jim Stroud, a corporate recruiting expert notes, during this downturn, those assumptions may not hold as they did in the past. During the recession, companies went through several rounds of layoffs. Is it reasonable to assume, Stroud says, that even those people let go in the second or third round of layoffs were also underperformers? There are many good people out there, people who performed well for their companies, who nonetheless fell victim to the recession.

There are several good reasons for hiring someone who is unemployed, Stroud says.

The first is that it is unlikely they will leave anytime soon after being hired. After being without work, they won’t be particularly eager to risk losing employment. They may also help to increase retention among other workers because the previously unemployed person will be telling other employees about the problems he or she had while unemployed.

Hiring the unemployed will help your brand. Once it becomes known that you are willing to hire the unemployed, that you don’t discriminate and that you act fairly, it may help your company attract talent and maintain loyalty.

An unemployed person may bring new skills to the company. Many unemployed are using their time to go back to school to update their skills and knowledge, and they will bring this with them.

Bringing an unemployed person on board may help you build up your business networks. Looking for work, an unemployed person builds up his or her own network of contacts, and he or she will bring these contacts to your firm, people who may be potential new hires themselves or new customers.

And, finally, hiring an unemployed person may enable your company to take advantage of tax breaks for doing so. Under the Hiring Incentives to Restore Employment Act, for example, for each qualified employee retained for at least 52 consecutive weeks, businesses will be eligible for a general business tax credit, often referred to as the “new hire retention credit,” of 6.2 percent of wages paid to the qualified employee over the 52-week period, up to a maximum credit of $1,000, according to the Internal Revenue Service.

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