WHAT'S NEW IN THE LABOUR FORCE


FORTHCOMING CHANGES TO LABOUR FORCE OUTPUTS

Changes to standard Labour Force products will be implemented from the July 2014 to May 2015 issues of this and related publications. These changes have arisen from the ABS review in 2010-11 of content included in the labour household survey program, as described in the Information Paper: Outcomes of the Labour Household Surveys Content Review, 2012 (cat. no. 6107.0).

Further information on changes to outputs will be provided in an update to the Information Paper: Forthcoming Changes to Labour Force Statistics (cat. no. 6292.0), to be released on 26 June 2014.


REVISION TO ACTIVE JOB SEARCH STEPS

From the July 2014 issue of this and related publications, the ABS will change some of the job search steps in the Labour Force Survey (LFS) to better reflect the nature of job search practices in Australia and to better align with international standards. This note outlines the current practice, what the changes are, the reasons for the changes, and the impact on the estimates of the unemployed population, which are not expected to be statistically significant.

In accordance with international standards the ABS includes an 'active' job search criteria to define the unemployed population in the LFS. 'Active' job search steps are those which put a person in contact with prospective employers for work, either directly or through intermediaries (such as employment services, agencies or recruiting firms), or represent steps towards 'self-employment'. See the Glossary for the list of current active job search steps. People who only looked in newspapers or read job advertisements on the internet are not considered actively looking for work, as it is impossible to obtain work without some additional active job search step (for example, contacting the employer).

To maintain consistency in the underlying concept of active job search over time, it is necessary to periodically review the steps which are considered active to reflect current and emerging practices in the labour market. For example, in July 2011 looking on the internet was added to looking in newspapers as a passive job search step and reference to Centrelink touch screens was removed.


WHAT CHANGES ARE OCCURRING?

Changes to the job search steps will be made to the LFS questionnaire from July 2014. These changes aim to more accurately reflect the role of Centrelink in relation to job seekers, to provide greater consistency of treatment of certain job search steps, and to include logical job search steps that are currently not included.

Two new active job search steps will be included in the survey:

• 'had an interview with an employer for work' and
• 'taken steps to purchase or start your own business'.

Having an interview with an employer is a logical step in the process of getting a job, and given that it may take some time for people to be offered a job after applying (during which time they may attend an interview), including this as an active job search step means that people who are in the process of being considered for a job will not necessarily change from being classified as unemployed to not in the labour force if there are time lags between applying for, being interviewed for and being offered a job.

The previous suite of job search steps did not consider steps taken to start or purchase a business as an active job search step. Activities such as applying for an Australian Business Number or licences, or seeking finance to establish or purchase a business, or obtaining premises or equipment, are considered job search activities for people who are looking to be 'self-employed', i.e. working in their own business. The recognition of these as active job search steps was agreed to at the 19th International Conference of Labour Statisticians, in October 2013, where the standards for work, employment and labour underutilisation were revised.

In addition, two steps which are currently 'active' steps will no longer be considered sufficient for the respondent to be classified as actively looking for work. These are 'checked notice boards' and 'been registered with Centrelink as a jobseeker'.

Currently, the step 'looking in newspapers or on the internet' is not an active job search step, as without taking further steps (such as responding to an advertisement or applying to an employer for a job) a prospective employer would not be made aware that the person was looking for work. Checking notice boards is not conceptually different from checking in newspapers or on the internet, so should be treated in the same way (as not an active job search step), and will be rolled into the current response 'looking in newspapers or on the internet'.

The role of Centrelink in relation to job seekers has changed over time. The core function of Centrelink in relation to job seekers is in the administration of income support, rather than directly supporting job search activities. While registering with Centrelink as a job seeker is a necessary step in order to receive government income support, it is not a step relating to actual job search. Job seekers would need to take active job search steps, in order to be considered actively looking for work.


LIKELY IMPACT ON ESTIMATES OF UNEMPLOYMENT

The changes will have no impact on the estimate of persons employed, but may result in some movement between the unemployed and not in the labour force populations.

As accurately measuring any impact is expensive and complex, the ABS will not introduce special collection arrangements to measure the changes to the LFS questionnaire as the net impact of the two sets of changes is not expected to be statistically significant.

It is anticipated that the inclusion of the two new 'active' job search steps (attending an interview and steps to buy or establish a business) would slightly increase the number of people counted as unemployed (who may be considered not in the labour force under the current questionnaire depending on the respondents' other job search activities).

It is anticipated that the changes from active to passive job search (for checking notice boards and registering with Centrelink as a job seeker) will slightly decrease the number of people classified as unemployed. While these categories are included in the current LFS questionnaire, it is not possible to use the LFS data to accurately estimate the impact of this change, as once an active job search step is identified no further job search steps are asked.