He points out that they can even be detrimental to workers’ job prospects, as they discourage job-seeking and underestimate workers’ skills
There is no doubt: the ERTE has been very “effective” in facilitating the recovery of the 3.5 million workers who, in the middle of the pandemic, had their jobs suspended due to the economic slowdown caused by the sanitary crisis. This is confirmed by the Bank of Spain in a report published this Thursday. However, the regulator warns that its effectiveness “tends to decrease” as this mechanism, which was used massively in 2020, becomes longer over time, especially among some groups of workers, such as the youngest, those who have a temporary have a contract or employees in certain service activities.
In addition, the body chaired by Pablo Hernández de Cos points out that, once the most acute phase of the crisis has been overcome, persistence in an ERTE situation could even be detrimental to workers’ job prospects. Primarily because it creates a disincentive to look for another job, in some cases by waiting for a reintegration that may not take place or could be postponed over time if, for example, the company has structural viability problems. Second, because prolonged inactivity can imply a depreciation of work skills that is outweighed by the value of the employment relationship one is trying to protect.
Specifically, the Bank of Spain estimates that the effectiveness of ERTEs, measured as the percentage of those affected returning to active work in the following quarter, is 64.5% for those who have been in this situation for a quarter, that is say two-thirds return to their posts, but it drops to 41.1% for those chained in ERTE for two quarters and plummets to 26.2% if suspended for three consecutive quarters, meaning only one in four workers in ERTE is reactivated after more than nine months.
In any case, the organization emphasizes that the probability of returning to work is always “significantly higher” for people in ERTE than for the unemployed or inactive, which is an indicator of the effectiveness of these programs in the covid crisis in promoting the return to work of the affected workers, although the gap between them narrows as the length of the redeployment file increases.
Source: La Verdad