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Crowdstaffing featured as Rising Star and Premium Usability HR platform in 2019

Crowdstaffing has earned the prestigious 2019 Rising Star & Premium Usability Awards from FinancesOnline, a popular B2B software review platform. This recognition is given out annually to products[...]

May 13, 2019

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Bias Against Long-Term Unemployed Costs Everyone

There’s a Great Tax Incentive for Hiring the Long-Term Unemployed -- If You Can Recruit Them

The Bureau of Labor Statistics (BLS) just issued a revised projection of the labor force participation rate, and it’s lower than previously estimated. According to the new data, participation in the U.S. workforce between 2000 and 2010 dropped three percentage points. That means about 35.3 percent of unemployed Americans weren’t merely unemployed during that decade -- while capable, they had stopped looking for jobs.

So what’s the difference between the unemployment rate, which we hear about regularly, and the less publicized labor force participation rate (LFPR)? Unemployment statistics track the number of jobless people who’ve filed claims, are actively seeking work and haven’t been offered a position. The LFPR depicts the count of individuals who’ve simply dropped out of the workforce altogether. As it stands, according to government data, barely six in 10 unemployed Americans eligible to work are currently looking. A large part of the problem is a reluctance to consider the long-termed unemployed. And the presumptions made about them aren’t always fair.

There persists a strong bias against the long-term unemployed that simply makes no sense these days. Companies need skilled workers, who now happen to dwell within the ranks of the long-term unemployed. Companies won’t hire them because of outdated prejudices. Even worse, the automated prescreening configurations in many applicant tracking and recruiting systems rule out workers who have been without jobs for more than a couple of months. The longer this talent remain unemployed, the more their skills languish. It’s truly an ugly cycle in which everyone loses. Fortunately, the federal government continues to make strides in creating incentives to get this talent back to work. The ongoing obstacle, however, is how to connect with prospective candidates who’ve essentially dropped off the employment grid. That’s where today’s staffing curators and their evolutionary recruiting methods come in.

Ignoring the Long-Term Unemployed Creates Longer Term Problems

Jeff Zients, head of President Obama’s National Economic Council, called the situation a “vicious cycle, as the long-term unemployed are less likely to be offered a job even when they have the exact same resume and qualifications as other applicants.” If the economy is to recover and survive, consumers need purchasing power. That means talent need jobs and companies need talent. It’s time to discard archaic notions of what long-term unemployment implies and realistically look at the catalyst in context of this economy.

Last year, in response to the issue, the White House launched an initiative to recognize organizations that made bolder strides in welcoming the long-term unemployed back into the market. In a report called “Addressing the Negative Cycle of Long-Term Unemployment,” the White House found that enterprises hiring the long-term unemployed experienced higher retention rates and reaped the rewards of a more loyal talent base. The unique assets, perspectives and talents of these workers help employers build more eclectic and diverse teams of professionals, while forging a stellar employment brand in the process. Now, the government is preparing to do more.

In December, the president signed an omnibus spending and tax package that reauthorized the Workforce Opportunity Tax Credit (WOTC), a program created to encourage employers to hire and retain people from groups with employment barriers. For the first time since WOTC’s inception in the 1990s, the extension will span more than one year. The current credit will now reach into 2019. That’s not all. The president didn’t simply reauthorize the WOTC, he reinvigorated it by including provisions for hiring the long-term unemployed.

As the Society for Human Resource Management (SHRM) noted, the tax cuts contained in the WOTC could play an instrumental role in helping to “counteract the phenomenon of unemployment bias, where qualified people are overlooked by employers merely because they currently don’t have a job.” The critical term here is “qualified people.” With so many companies still struggling with skills shortages, the long-term unemployed may represent a real solution. However, the overhead and complexity associated with specialized recruiting processes can present challenges to employers. Businesses can reduce their sourcing costs and streamline their efforts by working with staffing curators who know how to seek out capable and pre-screened candidates among the long-term unemployed.

Staffing Curators are Skills-Based Sourcing Experts

Modern staffing professionals are well-versed in the latest, most innovative sourcing strategies. They specialize in skills-based hiring using a wide array of tools: leading HR technology platforms, job boards, social networks, online staffing marketplaces, professional directories, niche associations, state agencies, community centers and a variety of creative, non-traditional sources. We have seen recruiters who are actually connecting with exemplary professionals through sites such as WhatsApp, Snapchat, Pinterest, Instagram and more. Today’s recruitment technologies also offer data-driven approaches to matching candidates with the best fit recruiters and businesses. Unlike aging applicant tracking systems, they facilitate immediate interactions, rely on social recruiting strategies, offer a responsive design native to mobile devices, and include new algorithms that simply the application process yet provide a more complex and effective way to match skills with requisitions. They no longer emphasize job duties and tasks, they focus on skills, aptitude and cultural compatibility.

Skills-based hiring techniques not only produce better candidate matches, they cut recruiting costs. According to Deloitte’s research, the following savings and performance enhancements result from these practices:

  • 25 percent to 75 percent reduction in turnover
  • 50 percent to 70 percent reduction in time-to-hire
  • 70 percent reduction in cost-to-hire
  • 50 percent reduction in training time

Staffing Professionals Tap into Talent Networks Internal Recruiters Don’t Have

Staffing professionals have cultivated deep and diverse networks from which to source talent in a timely and cost-efficient manner. Outside of traditional channels, high-performing staffing firms have the opportunity to ally with state unemployment bureaus, American Job Centers and local intermediaries (publicly-funded and non-profit) that have collected data, resumes, job skills and work experience from the unemployed talent in their communities. There are currently over 2,800 American Job Centers alone -- federally coordinated career centers for job seekers. The establishment of a close working relationship between these agencies and staffing providers can facilitate a mutually beneficial solution to long-term unemployment. Intermediaries have a wealth of candidate data; staffing professionals have the resources and know-how required to put that information to its fullest possible use.

Staffing Curators Sit at the Top of the Maturity Model

Unlike government vocational services, staffing professionals have already reached the highest rungs of recruiting maturity models. That means they possess concrete sourcing practices, offer actionable ways to improve an organization’s recruitment strategies, create compelling employer brands, and are proven and seasoned leaders in accessing and acquiring diverse workers at all levels of employment. By adding state and municipal intermediaries (like American Job Centers) to their sourcing networks, staffing curators also gain access to mission-critical data culled from unemployment claim filings -- information that can substantially expedite and refine the search for long-term unemployed talent.

  • Elite staffing professionals help organizations define their diverse talent needs in a consultative and collaborative manner, ensuring a strong alignment on long-term unemployed hiring goals.
  • They help create and implement metrics and performance standards tailored to the process of sourcing the long-term unemployed.
  • They can use their resources and experience to build organized and dedicated talent pipelines that target the long-term unemployed.
  • Staffing professionals know how to evaluate successful job performance and create customized, job profiles focused on key traits.
  • They have established relationships with intermediaries to source the long-term unemployed.
  • They know how to create communication channels for providing regular feedback to intermediaries about the quality and success rates of long-term unemployed candidates.
  • Staffing curators are experts at developing employee referral programs to capture the interest of former talent and build alumni networks. Creating career resources that encourage the long-term unemployed to join these networks allows staffing professionals to rapidly develop a virtual bench of screened and available talent.
  • Staffing leaders have the expertise and insight to guide organizations (even public intermediaries) in developing educational tools, career development programs and learning systems to help hiring managers understand the value of hiring the long-term unemployed.
  • Staffing professionals excel at spearheading rich employment brand initiatives. They can conceptualize and execute niche campaigns that showcase an employer’s commitment to recruiting the long-term unemployed while promoting the cultural values that position the organization as an employer-of-choice for other prospective talent in the community.

A Win-Win Scenario for Long-Term Success

Enterprises and agencies that engage today’s pioneering staffing professionals will help millions of skilled, capable Americans integrate back into economy, fill millions of open jobs and increase the productivity of businesses across the nation. Talent are more widely dispersed than the active candidates of day’s past. They are now part of a greater crowd, and employers need the support of staffing curators who can find and engage these professionals through cutting-edge recruitment methodologies and tools.

Over the coming weeks, I’ll continue to explore the topics that are transforming the workforce of 2016 and beyond. I’d love to share ideas with you in person. If you’re attending the VMSA Live event in Florida on February 10, please join me for an engaging discussion about these topics and more. My first speech, “Crowdstaffing: The evolution of talent acquisition,” takes place at 11:30 a.m., followed at 1:15 p.m. by my interactive session on “Trends, Disruptors and Technology.” I hope to see you there!

 

Sunil Bagai
Sunil Bagai
Sunil is a Silicon Valley entrepreneur, thought leader and influencer who is transforming the way companies think about and acquire talent. Blending vision, technology and business skills honed in the most innovative corporate environments, he has launched a new model for recruitment called Crowdstaffing which is being tapped successfully top global brands. Sunil is passionate about building a company that provides value to the complete staffing ecosystem including clients, candidates and recruiters.
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