Written By ESR News Blog Editor Thomas Ahearn
Companies that rely on an automated hiring process “regularly eliminate all but those candidates who most closely match the job requirements specified” and “those workers are thus hidden from consideration by the design and implementation of the very processes that were meant to maximize a company’s access to qualified and available talent,” according to the Harvard Business School study “Hidden Workers: Untapped Talent.”
The study released in September 2021 with Accenture found companies continue to struggle to find people with the skills that they need. “At the same time, an enormous and growing group of people are unemployed or underemployed, eager to get a job or increase their working hours. However, they remain effectively ‘hidden’ from most businesses that would benefit from hiring them by the very processes those companies use to find talent.”
The study – which included a survey of more than 8,000 hidden workers and more than 2,250 executives – found “hidden workers” fell into three categories: “missing hours” (working one or more part-time jobs but willing and able to work full-time); “missing from work” (unemployed for a long time but seeking employment); or “missing from the workforce” (not working and not seeking employment but willing and able to work in the right situation).
The study estimated that there are more than 27 million hidden workers in the United States and “the sheer magnitude of this population reveals the potential impact that their substantial re-absorption into the workforce would have.” So what keeps these workers hidden? The study listed several barriers that contribute significantly to keeping companies from considering hidden workers as candidates to meet their skills needs. They include:
- A widening training gap. “The rapid pace of change in many occupations, driven in large part by advancing technologies, has made it extremely difficult for workers to obtain relevant skills. The evolution in job content has outstripped the capacity of traditional skills providers, such as education systems and other workforce intermediaries, to adapt. The perverse consequence is that developing the capabilities employers seek increasingly requires the candidate to be employed.”
- Inflexibly configured automated recruiting systems. “An Applicant Tracking System (ATS) is a workflow-oriented tool that helps organizations manage and track the pipeline of applicants in each step of the recruiting process. A Recruiting Management or Marketing System (RMS) complements the ATS and supports recruiters in all activities related to marketing open positions, sourcing key talent, creating talent pools, and automating aspects of the recruiting process such as automated candidate scoring and interview scheduling… These systems are vital; however, they are designed to maximize the efficiency of the process. That leads them to hone in on candidates, using very specific parameters, in order to minimize the number of applicants that are actively considered… Most also use a failure to meet certain criteria (such as a gap in full-time employment) as a basis for excluding a candidate from consideration irrespective of their other qualifications. As a result, they exclude from consideration viable candidates whose resumes do not match the criteria but who could perform at a high level with training.”
- Failure to recognize and elevate the business case. “Most companies that have engaged with hidden workers have done so through their corporate foundations or corporate social responsibility (CSR) efforts. Those are praiseworthy activities, but also inherently reinforce the myth that hiring hidden workers is an act of charity or corporate citizenship, rather than a source of competitive advantage.”
The study noted that research found 99 percent of Fortune 500 companies use an ATS and the employer survey contained in the study confirmed that midsize enterprises with between 50 and 999 employees use such filtering technology quite extensively. For larger enterprises with more than 1,000 workers, the percentage of employers using an RMS rose to 69 percent. In the United States, 75 percent of employers use these technologies.
The study recommended that companies “can take several steps to include hidden workers, and in doing so, create a new and valuable pipeline of talent. Chief among them: reforming their approach to talent acquisition overall and developing a customized approach to hiring hidden workers.” The complete study is available at www.hbs.edu/managing-the-future-of-work/Documents/research/hiddenworkers09032021.pdf.
Government agencies in the United States such as the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), and the Equal Employment Opportunity Commission (EEOC) will increase scrutiny on how Artificial Intelligence (AI) is used in background screening and automated hiring, according to Employment Screening Resources® (ESR), which compiled a list of the “ESR Top Ten Background Check Trends” for 2021.
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