Australia's Gambling Industries - Productivity Commission

The Commission has assumed that the pattern of job change for those changing jobs
as a result of gambling is the same as that for the general population — an average
period between jobs of 6 weeks. On the basis of average weekly earnings of $743,
this is a loss in income of some $4300 per job change which, for 5600 people results
in an estimated annual total cost of $24 million.
Cost of job search for the gambler
The Commission has not come across any up-to-date information on the cost of job
search for the employee. To calculate the cost, the Commission has used the
estimate of $2357 used by Dickerson et al (1998). This was reported as
“approximately half of the cost reported by major job search firms.”
With an estimated 5377 people changing jobs as a result of their gambling in a year,
job search by the employee represents a total cost of $13 million.
Cost of staff replacement for the employer
Information on the cost of staff replacement for the employer has been equally hard
to find, particularly as relates to Australia. Layard et al (1991) (p. 343) said:
... in the USA, the sum of hiring and firing costs for white collar workers totals between
two weeks’ and two months’ pay, whereas for blue-collar workers they are around onefifth
as great. In European countries, the legislative framework is rather stricter so the
equivalent costs would be considerably higher.
Holzer (1989) put the time cost associated with hiring and training new staff as
follows:
• Formal hours of training (8.991);
• Informal hours of training by management (45.118);
• Informal hours of training by co-workers (38.768); and
• hours spent hiring (12.225).
The NORC study (Gerstein et al 1999) study commented:
Employers incur search and training costs assumed equal to 10 per cent of the annual
salary for each employee replaced.
In this analysis, the Commission has similarly assumed that the employer search and
replacement cost equals 10 per cent of annual salary (estimated on the basis of
average weekly earnings), a cost per staff replacement of $3862. With 5600 people
being replaced in a year, this is a total cost to the employer of $22 million.
J.16 GAMBLING