It appears the federal government may institute a job credit initiative. This initiative is rapidly finding favor with legislators. Overall, it is an excellent idea. With the economic downturn still evident, and with national unemployment figures listed at close to double digits, it is time to rethink the hiring programs. There are cities and states suffering from unemployment figures at close to 20%, and these are only the official estimates. The real figures are greater than that.
Despite all the stimulus packages, while they have affected Wall Street and some businesses, employment rates are disappointing. While the rule of thumb projects that employment lags some six to eight months behind an economic recovery, improvement right now is sparse at best. Neither the consumer nor the employer is particularly secure that the economy has rebounded from the worst recession since the Great Depression. Employers would receive a tax credit worth twice the annual payroll tax. Pretty good.
One proposal under discussion is where employers would receive a two year tax credit for expanding their workforce.
It has been argued that the tax credit would not be as effective as some assumed because employers would only be hiring people if they genuinely needed to increase their work staffs. Well in most instances that would be exactly the case. Most employers have laid off employees or have cut some full time workers to part time workers. This had created an overload on the surviving workforce. Between being stressed out from salary cutbacks and the fear of being laid off, the work overload has taken its toll on additional stress and employee performance. It has not done all that much to boost morale, for that matter.
So, bottom line, most employers do need to rehire in order to be productive and efficient. It is easy to see where the tax credit would have inherent appeal. However, I have to caution most employers that hiring without conducting adequate background checks for your preemployment screening program could be a grievous mistake. In the rush to take advantage of the employment tax initiative, an employer may decide to eschew background checks as a way of keeping down expenses. This can prove a foolish move.
Recruiting the wrong person, if they have a violent past, can endanger your entire workforce. There are considerations for office theft, especially the theft of sensitive databases and proprietary information. It is prudent in this economy to conduct either a credit report or bankruptcies, liens, judgments to help assure a job candidate is not in such desperate straits as to commit theft. Then there are issues of substance abuse. Employees afflicted with substance abuse can prove costly to employers. Factor in the cost of dismissal and the cost of recruiting and retraining, and the expense can be considerable, tax credit or not.
The Federal Job Tax Credit Initiative may serve employers by inspiring them to hire or rehire employees. But the employer is only well served by the tax credit when they hire productive workers who are reliable and competent. By hiring workers without conducting background checks as par tof your preemployment screening, as an employer you run the risk of bringing on board candidates prone to violence, theft, substance abuse, or creating for the employer any legal or liability issues. Not only will you incur the consequent expenses, but you will further reduce the morale in work staff.
So check them out before you hire.
