As layoffs increase, so do the financial impacts of unemployment insurance (UI) claims. According to the U.S. Department of Labor, the average cost per UI claim has surged by 23.7% over the last six quarters. The length of claims has also grown, with the average claim lasting 15.22 weeks as of Q2 2024, up from 13.7 weeks in early 2023. Additionally, a growing number of individuals are exhausting their benefits—rising from 32.7% to 37.9% over the same period.
As of September 30, 2024, the unemployment rate showed a slight decline to 4.1%. However, other key indicators remain concerning. The average duration of unemployment claims increased to 15.3 weeks, and the exhaustion rate surpassed 38%, signaling that many individuals are remaining out of work for extended periods.
This upward trend in costs makes proactive unemployment management essential. Leveraging effective reemployment programs can shorten the average claim duration by 30% or more, potentially saving $2,064 per claim.
In states with higher-than-average claim values, like Massachusetts, New Jersey, and Washington, the stakes are even higher. Claims in these regions often exceed $10,000, making a reduction of just a few weeks a significant cost-saver. In such cases, a well-executed reemployment strategy can result in savings of $3,000 or more per claim.
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