The state of unemployment benefits is ready for disruption; it just requires some changes from the government

In 2023, almost 18 Million workers were laid off or discharged from their jobs, and roughly 10.5 Million unemployment benefit claims were filed. A single claimant can file multiple claims per week, so the claims filed do not have a 1-to-1 relationship with the number of laid-off workers. However, this statistic shows just how important unemployment benefits are for millions of people’s livelihoods.

If you have been laid off or fired and attempted to file a claim, you know just how painful the process is. Online systems that are supposed to help claimants file cases are archaic, confusing, and broken.

First, you have to fill out an unintuitive form and provide all of your details, and after inputting all the details, the online system tells you to call the customer service center. The wait times for the call centers are insanely long, and once you have a customer service agent on the call, you repeat all the details that you have already filled out in a form. These details are inputted into the systems manually, and the claim is finally filed. Next, you wait for your claim to get reviewed, which takes a few weeks. There are no notifications in your email regarding whether the claim was approved. You manually have to log in to the website to see the status of your claim. For the majority of states, you will only know about the decision via physical mail. Another part of the process is that you generally have to register for a “workforce” site and include your professional details. Think of it as a crappy LinkedIn job board. You have to search for five jobs every week and manually enter those job searches into the workforce job board. Your claim can be voided if you do not comply with this requirement. Finally, you have to ask for your unemployment benefit every two weeks.

This is the current experience if you are applying for your unemployment benefits. You can imagine these processes would be way harder if you are not a tech-forward person. You are going through this ordeal on top of getting fired and not knowing the state of your future income and employment.

Each state maintains its own online systems for unemployment benefits, which is part of the problem. The lack of centralization has made this process unbearable. Private companies have largely forgotten about the fact that this problem exists as the recipients of these bad experiences are either underserved, non-tech-forward workers, or they do not care about applying for unemployment benefits, given the amount of wealth they have accumulated

The mental toll of the process

Let’s take a look at how many hours it usually takes someone to file for and receive benefits. In my example, I was in Texas, so I would focus on that experience. Two hours to get the account created and submit all the information. I would then have to create an account in the Texas Workforce, which takes another 30 minutes. Every two weeks, I would have to go check my mailbox, input my job searches manually, and request my claim. Let’s assume that a regular user applies for unemployment benefits for six months until they run out of their benefits. Considering the effort to manually poll the data from the website and the physical efforts needed to get this done, each user essentially spends more than 60 hours within six months to navigate this maze. For the above factors, just look at the quantitative hours. We need to consider the non-quantifiable impact of this process — anxiety and stress associated with dialing call center agents, uncertainty, and lack of visibility into the process.

How does one apply for unemployment benefits?

Each state has its own Department of Labor system, which typically requires the claimant to submit lots of documents. These systems lack various features, for example: 1) users are not able to see all documents they have submitted, 2) no clear instructions on eligibility requirements, 3) often require users to call in, which typically has delays, 4) lack of proactive notifications on the updates of the claims, 5) requires users to manually search for available jobs and apply to those jobs which are typically not relevant to the candidate’s experience.

How can technology help with this?

It requires a product that can do the following tasks. However, most of these features will only be useful if the government allows claimants to designate an authorized agent to apply for the benefits..much like how Medicaid does.

1. Eligibility criteria: Input your details, including location, age, employment information, address, etc., and instantly know whether you are eligible for unemployment benefits, how much you will get weekly, and for how long. It should take around 90 seconds to go through this entire process.
   

2. Help with the filling process: All the necessary required documents are tracked in a centralized dashboard. Proactive alerts if any requirements are not being met.
   

3. Managing deadlines and tracking: Calendarized entries to make sure claimants are submitting the documents on time and requesting their benefits on time. Proactive email and SMS alerts on important dates to help manage the claim process.
   

4. Job search and educational training: Claimants are required to apply to several jobs per week to show that they are serious about finding employment. Generally, the jobs recommended by the State Department are not relevant to the candidate’s experience. The job search platform within Nestor displays jobs that are most relevant to what the candidate is looking for. Additionally, the platform provides upskilling and educational videos to help prepare for the interviews. This is typically done via third-party integration with Udemy or Coursera.
   

5. Access to employment consultants: Need to talk to someone who has experienced navigating these issues? You can talk to Nestor’s consultants and get instant guidance or create a long-term strategy to maximize your benefits.