Protect people from the worst effects of the recession and minimise unemployment

People are better off when they have a job. It's better for them individually, for their children and their families. Having a job builds financial security and independence. It boosts self-confidence and connects people to their communities. A productive, employed workforce is good for individuals, business, industry and the country as a whole.

We have worked with businesses and employers to help keep people in jobs. Where this wasn't possible, we changed how we worked to help people to return to the work place as soon as possible.

Impact of the recession

In early 2009, it was clear New Zealand was heading into a recession the country had not experienced in over 60 years. The job market contracted significantly, becoming increasingly competitive and making it harder than usual for young jobseekers and the long-term unemployed to find work.

At the end of June 2010, 62,000 working age people were receiving an Unemployment Benefit, compared with 18,000 in June 2008 and 51,000 in June 2009. The percentage of households with dependent children with no adult in the workforce increased from 12.2 per cent in December 2008 to 14.1 per cent in December 2009¹.

The number of working age people receiving an Unemployment Benefit increased by 11,000 (22 per cent) in the 12 months to June 2010. Over the last 24 months this number has increased by 244 per cent. This increase is a direct result of economic conditions. However, unemployment did not reach the predicted levels of 11 per cent, in part due to the Government’s work-first approach and the Ministry’s focus on helping New Zealanders into work wherever possible.

In our 2009–2012 Statement of Intent we included indicators for getting people into work. Our progress on these indicators reflects the success we have had in helping people to get and stay in jobs. In 2009/2010, a greater proportion of people (37.5 per cent) than in March 2009 (34.4 per cent) who attended a Work for You Seminar did not need a benefit within the following 28 days. In addition, 33,011 people who exited a main benefit stayed in work for six months or longer, compared with 30,553 in 2007/2008.

Of the clients receiving an Unemployment Benefit at the end of June 2010, 71 per cent were male, 37 per cent were mature jobseekers (aged 40–64 years).

Response to the recession

At the end of June 2010, over 6,000 Job Ops places had been taken up, with 4,646 employers participating in the programme. First year results show 80 per cent of participants had moved into work or training after completing their Job Ops participation.

Job Ops
Young people have been hard hit by the recession. Employers were reluctant to take on new staff, let alone staff with little experience or few skills. To address this, we implemented the Government’s Youth Opportunities package for young people aged 16–24 years. This package of interventions helps young people at risk of long-term unemployment by creating job and training opportunities.

The subsidised Job Ops programme, a part of the Youth Opportunities package, encourages employers to consider taking on young people to fill entry-level positions. This will provide young people with valuable work experience for later work opportunities.

Job Ops has been successful. Eighty per cent of participants moved into work or training. Thousands of young people have had the opportunity to prove themselves to employers. Job Ops will be expanded into 2010/2011, effectively doubling the number of placements in the programme from 6,000 to 12,000. Initially, Job Ops employers were excluded from using the 90-day employment trial. From 1 July 2010, employers will be able to use this trial period. Hopefully, this will encourage more employers to offer Job Ops positions.

Community Max
We also offered Community Max to help get young people working in their communities by providing a wage subsidy and training for them when they worked on community-based projects. These projects give young people valuable experience in a real work environment while helping out with useful community projects. Community Max will be extended by another 1,500 places in areas where Mäori youth unemployment has been the highest – Northland, Bay of Plenty, Waikato and the East Coast.

Youth Transition Services
The Youth Transition Services continued to operate alongside Job Ops and Community Max. During 2009/2010, 6,468 young people exited Youth Transition Services into employment, training or further education. This was an indicator in the Ministry’s 2009–2012 Statement of Intent. It has been overtaken by the Government’s increased focus on getting young people into work. The Ministry revised its measure for youth employment in its 2010–2013 Statement of Intent.

At the end of June 2010, 3,571 Community Max places had been taken up. Forty-one per cent of the young people who completed their participation in Community Max have gone into work or training.

Changing how we work

To respond to the increase in demand for our services, Work and Income made changes to its operations to help keep people in work or to get more people back into work as quickly as possible. These improvements have increased productivity and efficiency while reducing costs.

Lean Six Sigma
Work and Income applied the Lean Six Sigma methodology to streamline its service delivery. Lean Six Sigma is helping us to reduce errors and duplication, increase our efficiency and remove variation in the services we provide.

Since introducing Lean Six Sigma, Work and Income has lifted case manager productivity by up to 30 per cent allowing staff more time to proactively help clients into work. This means staff are able to process close to a third more applications each day. Clients now wait on average half a day less to get an appointment, and have all of their needs dealt with in the one appointment, instead of over multiple appointments. Clients get their needs met faster and are still able to request appointments with specific case managers if they choose to. We also still offer a dedicated one-on-one service for clients with very complex needs.

Recruitment
Smarter thinking was applied to how we identify work opportunities for jobseekers. Over the last year, Work and Income has formed important strategic relationships with the Recruitment and Consulting Services Association and TradeMe Jobs. By becoming partners, we are expanding opportunities for jobseekers and employers alike.

Job Connect
Job Connect is our national recruitment service that works with clients and employers. Job Connect allows closer interaction between work brokers and employers to identify vacancies and match them to clients. Through the virtual contact centre, work-ready clients can call us instead of going into a service centre to view current vacancies. As well, Job Connect provides a centralised, co-ordinated support service for employers facing staff shortages.

Job Search Service
We made changes to our Job Search Service to provide jobseekers with:

• a standardised employment service – intensive job search support, tailored to the individual jobseeker, from the initial point of contact
• an upfront job search assessment that identifies the services jobseekers need to return them to employment
• employment information and job placement services that enable jobseekers to manage their own job searching
• access to services (including interventions and activities) tailored to meet a jobseeker’s level of need.

We know these approaches work because, in 2009/2010, 37.5 per cent of Unemployment Benefit jobseekers did not require a benefit within 28 days of attending a Work for You seminar.

Online transactions
Work and Income has moved more transactions online. Online services play a crucial role in the Ministry’s service vision, which includes offering services to our clients using the web.
Work and Income’s new online services include:

• Employers On-Line – this service improved the interface between Work and Income and employers through online services, including job search and placement facilities.
• Client online services – these deliver a range of services to clients (both working age and seniors) allowing them to check their eligibility for assistance using an eligibility calculator, apply for a benefit or pension online and book an appointment online.

Approximately 6,200 outbound and inbound calls are made through Job Connect every week.

Future Focus

In the coming year we will be delivering the Government’s Future Focus package. Future Focus is a package of welfare reforms designed to get people who rely on benefits back into work as quickly as possible. Future Focus includes financial incentives to reward those who work, support to get people back into paid work, and stronger expectations and sanctions for those who do not meet their jobseeking obligations.

Over the past year the Ministry has done a lot of work to get this package up and running. The package will cost approximately $88 million over the next four years and is largely funded through savings.

The main changes affect sole parents receiving a Domestic Purposes Benefit (DPB) (this part of the package comes into effect in September 2010) and people on Sickness Benefit (SB) (effective from May 2011). Sole parents on a DPB whose youngest child is six years or over and people on a SB who have been assessed as capable of doing some work will now have work obligations. This means that they will need to look for part-time work which we will help them to do and they may face sanctions if they are not active in their job search.

Abatement thresholds have been raised. This means people on a DPB, an Invalid’s Benefit, and a Widow’s Benefit, and those on New Zealand Superannuation and a Veteran’s Pension with non-qualifying spouses who claim the married rate, can now earn more before their benefits are affected.

The changes to abatement levels could make an estimated 28,000 people better off.

¹ This is an indicator in the Ministry’s 2009–2012 Statement of Intent. There is also an indicator of households with dependent children with net-of-housing-cost incomes below 60 per cent of median. Updated comparable data is not available for this indicator.