HR calls for tax breaks for hiring long-term unemployed

HR professionals have backed calls for tax breaks to be given to businesses hiring the long-term unemployed.

As unemployment reached 2.47 million last week, a survey of 500 finance directors by law firm Grant Thornton revealed that 59% wanted to see a year’s holiday from paying national insurance contributions when hiring people who have been out of work for more than 12 months.

Sandy Begbie, executive HR director at Aegon UK, told Personnel Today: “It is clear there are risks associated with the recruitment of the long-term unemployed, and as such there should be some incentive for employers to recruit from that population.

“It would encourage employers to recruit the long-term unemployed while also providing employers with the opportunity of giving something back to the community as part of a well-developed corporate responsibility plan.”

Jonathan Cawthra, group resources director of housing association Affinity Sutton, added: “This initiative would create a financial incentive and some headroom that tilts the scales in favour of taking the risk, so I support it.”

While the Chartered Institute of Personnel and Development (CIPD) welcomed the proposal, it warned the tax holiday should be closely linked to Local Employment Partnerships and the development of employability skills.

John Philpott, chief economist at the CIPD, said: “The CIPD supports this kind of measure in principle but believes that it could not work as an automatic mechanism but would have to be linked to other measures designed to improve the employability of the long-term unemployed and/or institutions such as Local Employment Partnerships.

“A simple recruitment incentive such as the national insurance holiday is unlikely to have much impact.”

In August, Personnel Today reported the CBI called for the £1,000 subsidy currently offered to those recruiting the long-term unemployed to be stopped and given instead to those hiring the young unemployed.