New research shows ‘Job Lag’ is costing the economy six billion each year

SYDNEY - Nov. 3, 2014 - PRLog -- In response a ‘world first’ program was launched today by Federal Ministers to help new employees Hit The Ground Running and save Australian business millions of dollars in turnover costs.

Key findings:

- The Job Lag cost to the Australian economy is over six billion dollars per year
- The average cost of replacing an employee in Australia is over $38,000 and can be up to 51 per cent of their annual salary
- Federal Ministers launch a new employment program to save Australian businesses millions of dollars in Job Lag and allow recruits to ‘Hit The Ground Running’, increasing productivity and reducing costs
- The long term unemployed and disadvantaged groups will benefit most from the world first program
- Different states have different issues: NT has the highest and NSW the lowest Job Lag profile.

Research released today, supports the launch of the world’s first funded employment program to help people from disadvantaged groups find jobs through employers who have committed guaranteed roles.  The ‘Hit The Ground Running’ program (HTGR) by Job Futures was designed specifically to reduce Job Lag and provide an economic model that will give disadvantaged Australians and the long term unemployed long term jobs. The first candidates will graduate today with immediate employment opportunities in long term positions that offer career paths.

The report author, Dr Tim Baker, says that the landmark new research shows that we have previously underestimated the costs associated with staff turnover and that without changing the way we recruit people we could have one of the least productive workforces in the world. Baker, who is an employment academic, published the paper today in conjunction with Job Futures, Australia’s largest Not-For-Profit (NFP) Government employment services provider. “We need to change the way we look at candidates, train, induct and support new employees or businesses will fail to meet not only the employment needs of their companies and industries but also struggle to survive in a worldwide marketplace.”

The new research looks at employment practices and provides leadership for Australian business. No previous research has been done within the Australian context across all sectors.  The research also has led to the creation of a new cost model to calculate the total costs of staff turnover, which until now had underestimated the scale of the issue because previous models were incomplete. The new model is called ‘Job Lag’.

Matt Little, CEO Job Futures, says that the program was created because the current Australian employment environment was under researched and as a result there were limited models and programs designed for local conditions that could significantly address the nation’s long term unemployment issues. “The job market is rapidly changing and traditional industries are closing down which means that only the highly trained and well educated can avoid long term unemployment, leaving the most disadvantaged in our communities little hope of finding long term sustainable careers.”

Matt says that more than 720,000 Australians are currently unemployed with 89% actively looking for work but failing to find jobs because they often lack the right skills, or any meaningful training and experience. Equally the retail, service, hospitality and healthcare sectors are experiencing high turnover and a shortage of labour.  “We asked ourselves the question – Why are people not finding jobs in these industries and why are these same industries losing staff at record rates?  We then looked at the current turnover models and employment practices and identified the shortcomings, so solutions to these issues could be found.”

The research not only looked at the direct and indirect costs of staff turnover but considered the timescales to maximum productivity – hence the name Job Lag, the time it takes for a new worker to reach full working capacity. It looked at what the critical factors are in reaching maximum productivity and reducing turnover and how these factors can be influenced to resolve one of business’s largest costs.  The resulting model and program is the first in Australia (and the world), which will be rolled out nation wide to help find jobs for people who find gaining employment difficult and find new roles with some of Australia’s largest employers.

The research found that those from a disadvantaged background, young people and graduates were the most costly to employ because of Job Lag and that more had to be done to reduce the costs to business if youth unemployment and benefit receipiency numbers were to come down.  It also highlighted the need for different approaches to employment services for different groups within the community because of cultural differences.

The first HTGR graduates will be employed at Australian Hearing, a Not-For-Profit national provider of Government hearing services who wanted to increase its staff from indigenous backgrounds and save money by reducing staff turnover. Paul Brant, Manager of Recruitment Services, said that it’s allowed them to find a new way in how they find new people and bring people into the organisation. “It’s allowed us to do some planning around our recruitment, training and exposure to our organisation.  The work experience part of the program is probably one of the key successes. It saves us time, money and gives us quality staff that really need and want to work.  Now when someone starts with us, they have the confidence and skills to really hit the ground running.”

The first candidates will graduate today with immediate employment in long term positions that offer career paths through training, experience, induction and the overall reduction in their Job Lag factors. HTGR is the world’s first funded employment program designed to help people from disadvantaged groups find jobs through employers who have committed guaranteed roles and reduce Job Lag.

The first group of Australian Hearing employees will graduate from their program today in a ceremony attended by Federal Ministers, MPs and business leaders who are all ready to support the program in its nationwide launch.

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