A $10,000 bonus for businesses that hire workers over 50 is bad news for people in their late 40s.
Simone Novello has no qualms about hiring people in their late 40s.
Small business owner Simone Novello would consider hiring a 50-year-old if it meant getting the government’s bonus for employing older workers – potentially at the expense of a slightly younger worker.
“If I’m looking at a 49-year-old and all things are equal then I would be inclined to go for the 50-year-old,” says Novello, owner of PartnerUp, which helps SMEs form marketing and loyalty partnerships with other businesses.
But the $10,000 bonus on offer for employing workers aged 50 and over will only have a limited effect, she says. “It wouldn’t influence me if I was looking at two people and one was better suited to the job and likely to give me better outcomes.”
Novello has had good experiences of employing older workers. She hired a couple of 60-plus workers – including her mother – to help run her marketing events. “They have a maturity and initiative and a real enthusiasm for wanting to make a valuable contribution,” she says. “They take a real sense of ownership and pride in what they’re doing and they were very well liked by the attendees.”
The government announced in the budget this month that it would pay a $10,000 bonus to any business that gave a job to a worker aged over 50 if they’d been out of work for six months or more and had been receiving some form of government support.
From July 1, businesses that employ someone over 50 will receive a $3000 payment followed by a second $3000 payment if they keep them employed for 12 months. An additional $2000 will be given to those who keep over 50s employed for 18 months and a final $2000 payment will be given to outfits that employ them for more than two years.
While a $10,000 bonus would be handy, Novello says more support with training would be a better incentive.
It’s a point taken up by Associate Professor Elisabetta Magnani, who teaches economics at the University of NSW’s Australian School of Business. She says people who have been unemployed for six months or more usually have lower educational levels than those who find jobs more quickly, and returning to a workforce can be challenging for them. She says while $10,000 might help them get back to work, training would be more effective in helping them reintegrate into the workplace. “There is a chance the $10,000 won’t make a lot of difference,” she says.
Magnani cites Australian Bureau of Statistics figures showing that people aged 55-59 had a participation rate – that is, they were either working or looking for work – of 71 per cent in 2010, up from 40 per cent in 1990.
The unemployment rate for older Australians is also quite low, but this is deceptive as many who can’t find a job drop out of the workforce altogether and so aren’t recorded in unemployment data. Still, about a third of those aged 55-64 who are unemployed have been unemployed for a year or more.
On the 50-year threshold, Magnani says: “when you place a threshold, all the action happens at the margins – other things being equal it could skew the hiring process towards the option that offers $10,000 more”.
Bambi Staveley says $10,000 would “definitely” prompt her to hire someone aged over 50 compared with a younger person, as long as the person was suitable.
“I have a 28-year-old working for me at the moment and if she were to leave I would specifically be seeking out somebody who was older,” says Staveley, whose Sydney business Boost n Blend sells a product that helps women cover up their thinning hair. “I would do it for the incentive alone, but the other reason is that for people over 50 it’s really difficult to find employment, so I think it’s a win-win.”
Not all SME owners are so positive about the incentive. Bryan West, who owns Toowoomba-based training organisation Fortress Learning, says it could deter him from hiring an older worker.
“We want to employ the best possible people for the job we need them to do. Having a financial incentive like that is probably more of a distraction in the selection process,” he says. “I think if we were to be influenced by that then we wouldn’t be looking at the person and what they can bring to the organisation themselves.”
And if an over-50 candidate tried to win a job by using the incentive that would rule them out, West says. “If someone came in and said ‘I can bring $10,000 as well,’ I’d probably look at them as if they were trying to gain an advantage through some external factor.”