Hiring is Broken

hiring is broken

Our system for hiring employees is broken.  What’s more, I’m not sure that anyone knows how to fix it.

Take a look at a very scary chart from the St. Louis Federal Reserve.

fredgraph

So, of everyone who is currently unemployed, almost 40% of them have been out of work for more than six months.

This has never happened in any of our lifetimes.  It hasn’t even been more than 25% in our lifetimes, and that was a quick spike in the early 80’s.

This couples with a study from the Boston Federal Reserve that shows employers are much less likely to interview candidates who have been out of work more than six months.  The researcher sent out several thousand similar, fake resumes, that varied only in the amount of time pretend candidate had been unemployed.  He found that we, as a profession, are discriminating against the long term unemployed.

I know the conventional wisdom and explanations on this.

1. The longer you’re out of work, the more atrophied your skills are.  You’re not current on technologies, and would have too much of a learning curve.  Let’s just hire someone with current skills.

2. Herd mentality.  No other employer has picked this candidate up, so there must be something wrong with them!

3. Unemployed people are just giving up and being lazy about applying.

These are pretty much nonsense.  I’ve heard #1 expressed by hiring managers regularly — usually to cover up one of the other two.  I can’t remember seeing it happen, though.  Have you gotten burned hiring a bunch of long term unemployed candidates who worked hard, but their skills were just a year out of date?

As far as #2 and #3 go, the data is bigger than these.  Remember the chart from before: 40% of the people who are unemployed have been out of work more than six months.  This has never happened.  So sure, some of them are going to be lousy candidates, and some have given up.  But the vast majority of them had jobs in 2006 anyway!  Have we just gotten that much better at selecting talent in that time?  Or have unemployed people gotten lazier in six years?

Folks, KD has talked about the sales funnel for recruiting.  The underlying principle here is that you will increase your end result if you can maximize each number in the funnel.  If you’re ignoring the long-term unemployed, you’re cutting your starting number in half right from the beginning.  Your talent pool just got a lot smaller, and your quality will have to go down.  Not only that, how grateful will someone in this 40% be to finally get a job with you?!  It’s no fun being unemployed, and it sticks with you — employee retention with these candidates can only be strong.

So, look at your assumptions about hiring unemployed candidates.  If they’re not based on actual needs, stop cutting off your talent pipeline!

FOT Background Check

Steve Gifford
Steve Gifford, MBA, SPHR, is the Director of Human Resources for OEM America, a PEO of more than a hundred companies and more than two thousand employees. His company gives small businesses the buying power and HR expertise of a big company, but without the bureaucracy! In the past, he’s been the HR guy for marketing, manufacturing, retail, and government organizations. His first HR job was in the US Army during his second tour in Iraq, where every employee in his client group carried an automatic weapon. It helps him keep the problems of employees who show up to work late in perspective.

8 Comments

  1. valentinoBenito says:

    Agreed. The problem with hiring managers and recruiters, these days, is that they’re obsessed with “red flag” focus.

    For me — a big “red flag” is a recruiter, or hiring manager, who looks for red flags and misses the talent and high potential individual(s) in front of them.

    Reply
  2. Rory Trotter says:

    Really good points, Steve.

    Unfortunately, even if a recruiter or HR Manager wants to take a flier on a long term unemployed candidate that person still has to clear the hiring manager hurdle as well.

    I think a huge reason for the spike / bias here is the simple fact that more people now have input in the hiring process than at any other point in history. Ergo, an unemployed candidate doesn’t just have to overcome the bias of one person to get a fair look – but several.

    Thanks for sharing, and keep writing.

    Best,

    Rory

    Reply
  3. Blanche Cordero says:

    I am once of those long-term unemployed – HR people. You are probably very right, but I think it goes deeper. In all this time though, one would think that there would be one person who would take a leap of faith. Someone you used to work for or with who would give you an opportunity to at least interview, face to face. One would never expect any guarantees. I think it also has a lot to do with the applicant tracking software that is used to review resumes. Here is a great example of form over matter. I have heard this over and over; the best person doesn’t get the job. And then someone asks if it is or is not OK to lay or fib on your resume. What do you think? The best person doesn’t get the job. The longer you are not considered for a job, the more unemployable you become. All of these companies are simply making less people consumers. We continue to hear about the skills gap. DUH!!!!!! Who do you think have the skills? Probably those are the people that some hotshot VP laid off so his budget would look good. If it’s a manufacturing company, maybe this will shoot up the cost of sales, because now you have to go out and hire temps at a higher rate or have the people who are left work much more overtime.

    Someone mentioned that the unemployed are dropped out. Well you know what? I’m hearing about more and more people in the current workforce dropping out because they cannot tolerate 1. The way they are being treated, tithe breakdown of the work/family balance, 3. The stress and its physical manifestations on people have become too much to bare, 4. Survivor guilt 5. Lack of equitable rewards to the level of work, and 6. they are tired of being afraid of waiting for the next shoe to fall.

    When is enough greed enough? How much further apart do the executive salaries/bonuses to the average worker have to get before there really is class warfare? The rest of the world is so far ahead of educating their children while we continue to play with “No Child Left Behind” another BS program that really doesn’t teach our kids critical thinking skills, analytical skills, global competition skills, language skills, etc.

    My son’s guidance counselor now was as horrible as the one I had when I was in high school many years ago and in a different part of the state. I can’t even type any more words because this so upsets me. The sad part of all of this is that we did it to ourselves.

    Reply
  4. It is a buyer’s market for hiring managers. No matter if you have been out of work for six days or six months be prepared (i.e., learn all you can about the company you are interviewing with and be able to explain how your skills can help) and flexible (i.e, with salary, vacation time, hours).

    Two additional reasons for the trend in interviews being tougher are the increase in wrongful termination lawsuits and the increase in outsourcing.

    I wish you luck in your job search. Keep networking!

    Reply
  5. Richard Scudder says:

    No surprise on the results of this survey report. For those unemployed greater than 6 months – network and stay relevant. You can’t go in hiding and please don’t expect anyone to help you more than you must help yourself.

    Reply
  6. Then there are those who recognize that there is a stigma associated with having gaps in your employment history, so they take jobs that they know they will not being staying at. Unfortunately this then creates the “job hopper” which on its own is another “red flag” that prevents people from getting the job they otherwise qualify for. I am optimistic when I see articles like this t sooner or later those with hiring authority will recognize that red flags that was a big deal in the 80s really shouldn’t be end of all in 2013. I’m not saying completely ignore red flags, or take on all charity cases, but sometimes try something new or develop a new way of thinking.

    Reply
  7. Peter Meyer says:

    I agree that the process is broken. Employers and candidates cannot connect in traditional ways as effectively anymore. Our company is trying to increase the efficiency and effectiveness of a company’s hiring process through an online platform where we give the employer the power to choose a candidate wisely, without the manual process adopted by most corporations today.

    Reply

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