Employers are using the 90 day trial period to reduce the risk of taking on new staff and they are employing more people because of it.
This is one of the findings from research undertaken by the Department of Labour:
The Employers’ Perspectives – Part One: Trial Periods research is based on the findings of the National Survey of Employers of around 2,000 employers and qualitative interviews with 53 employers in Hawke’s Bay, Wellington, Auckland and Dunedin/Invercargill from the retail, hospitality, agriculture, forestry and fishing, and manufacturing industries.
• Sixty percent of hiring employers in the national survey reported using a trial period since its introduction (49 percent in 2010). There is not a significant difference between the level of use in SME’s and larger employers.
• Employers use trial periods to address risk when hiring, for example:
o To check an employee’s ability for the job before making a commitment to employ permanently (66 percent)
o To employ someone with the skills required, but where the business is unsure about their ‘fit’ with the workplace (35 percent)
o To avoid incurring costs if staff are unsuitable for the job (13 percent)
• Employers used trial periods to test the viability of a position (rather than person) within the business, saying they would not have filled their most recently vacant position without a trial period. This was more likely in SME’s (30 percent), compared with 17 percent for larger employers.
• Trial periods improved employment opportunities – 41 percent of employers in the national survey said they would not have hired the most recent employee without a trial period.
• SME’s were more likely to use trial periods to take a risk – 44 percent of SME’s would not have hired the last trial period employee without the use of a trial period, compared with 28 percent of larger employers.
• Youth and long-term unemployed are benefitting. Respondents to the qualitative interviews said trial periods were one of the key government initiatives that had improved their willingness to hire applicants from these groups – due to reduction of risk.
• Eighty percent of employers in the survey reported they had continued employing staff once the trial period had ended. . This is similar to the level found in the 2010 evaluation of trial periods in SME’s.
Labour Minister Kate Wilkinson, is justified in welcoming this news:
“Research by NZIER has previously told us that 90-day trials led to 13,000 new jobs in small and medium sized businesses,” Ms Wilkinson says.
“This latest research confirms trial periods allow employers to take on new staff, with the majority retaining their staff after the trial period is over. That’s great to see.
“The 90-day trials have been especially beneficial for young people and the long-term unemployed. it’s of clear benefit to both employers and employees.”
The opposition and unions fought against this legislation but these findings show it is working for employers and employees.
Businesses face less risk when taking on new staff and they are taking on more staff including those least likely to get work without the safety net of a trial period, the long-term unemployed and young people, because of that.
Rather than opening the door to exploitation as the left prophesied the legislation has reduced risk for businesses and increased employment opportunities which is exactly what is was designed to do.