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.
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you gotten burned hiring a bunch of long term unemployed candidates who worked hard, but their skills were just a year out of date?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!
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.