Automated resume-scanning software that is inflexibly configured and overlooks potentially suitable workers is a major factor contributing to a “broken” hiring system in the United States, according to a new report from Harvard Business School (HBS).
Business owners have been complaining about not being able to find enough workers and having to raise pay to attract new hires. At the same time, swaths of willing and available workers remain “not visible” to recruiters, who have become increasingly reliant on automated software that is inflexibly configured and filters out large numbers of viable candidates, according to the report.
“Companies are increasingly desperate for workers. As they continue to struggle to find people with the skills they need, their competitiveness and growth prospects are put at risk,” the report’s authors wrote.
“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.”
“Hidden workers,” according to HBS, include people without traditional qualifications, caregivers, veterans, relocating partners and spouses, and those with physical disabilities.
The HBS study identified a number of factors contributing to the labor market disconnect, including a widening training gap and failure to recognize and elevate the business case for hiring “hidden workers.” But automated resume-scanning software is a major one, with 88 percent of employers surveyed for the study saying that qualified high-skills candidates were vetted out of the recruitment process because they didn’t match the exact criteria in the job description, with that number rising to 94 percent for middle-skills workers.
Automated systems are a foundation for hiring processes, with more than 90 percent of employers surveyed for the HBS report indicating they use platforms such as the Applicant Tracking System (ATS) and the Recruiting Management or Marketing System (RMS) to assist recruiters. One problem, according to the study, is that these systems are configured to rely mostly on “negative” filters, such as an employment gap or lack of a college degree, to exclude applicants.
“While employers may infer that applicants who have those attributes are undeserving of consideration, applying an ‘affirmative’ logic would seem a more logical approach for seeking talent,” the authors argued. “Configuring systems to identify applicants with the specific skills and experiences associated with fulfilling the core requirements of the role would promise to be more efficient.”
This problem is compounded by outdated job descriptions, which, rather than being reassessed and drafted from scratch, are often “larded with legacy requirements and ‘nice to have’ attributes rather than a focus on a limited list of ’must-have' skills and experiences that correlate to performance in the role.”
Other tweaks to recruitment processes that could help businesses hire and unemployed workers find jobs include targeting specific segments of “hidden workers”—such as veterans, caregivers, and the disabled—while establishing new metrics for evaluating talent acquisition, such as attrition rates and the time it takes for a new employee to achieve expected levels of productivity.
Already, companies that have shifted their recruitment processes to focus on “hidden workers” are reporting bottom-line benefits, according to HBS. Such firms reported being 36 percent less likely to face talent or skills shortages relative to companies that didn’t target “hidden workers” while indicating that such workers outperform their peers across such criteria as attitude and work ethic, productivity, engagement, attendance, and quality of work.
