Now part of the new “Super” Ministry of Business, Innovation and Employment, the old Department of Labour has released a report examining the use of 90-day trial employment periods in small businesses (fewer than 20 employees). The first of three reports has been published on their website - http://www.dol.govt.nz/publications/research/employers-perspectives-part1-trial-periods/index.asp
Here are the key findings:
- Overall, 60 percent of employers reported using a trial period since its introduction.
- 66% of employers said the trial period allowed them to check an employee’s ability for the job before making a commitment to employ them permanently.
- Employers use trial periods to address risk when hiring. A key attraction of trial periods was that they reduced the potential costs associated with dismissing an employee.
- In turn, this gave employers the confidence to take a chance on applicants who may not have fulfilled all the original criteria.
- 35% reported it allowed them to employ someone with the skills required but they were initially unsure about the potential employee’s “fit” with the workplace.
- Trial periods were considered by employers as one of the key government initiatives which improved their willingness to hire young applicants or those who had been unemployed for a long time.
- Employers also reported using trial periods to test the viability of a position (rather than person) within the business. 30% of small and medium sized businesses said they would not have filled the most recently-filled position without a trial period.
- 41% of employers would not have hired the most recent employee without a trial period. In those cases, the trial period actually created real jobs.
- Four in five employers reported they have retained employees who were on a trial period. Once again, hysterical predictions that employers would simply fire people during their 89th day on the job have been proved to be unfounded and based on a fundamentally flawed understanding of how business works in the real world.