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May 13, 2019Read More
The long and winding road of the long-term unemployed
The U.S. economy has weathered many recessionary storms. The Great Recession, which reached full steam around 2009, left one distinguishing feature its forebears had not: the persistence of long-term unemployment. Three million Americans remain without jobs and have been searching for work longer than six months. Historic trends have demonstrated a tragic correlation between the length of unemployment and the chances of talent finding new work: as the months of joblessness increase, the likelihood of gaining employment plummets. At some point, many of those former workers drop out of the labor force altogether.
The most frustrating aspect of the recent long-term unemployment situation is that it seems to defy the standard explanations. Research conducted by Harvard Business shows no discrimination between under-educated or unskilled talent and their more qualified or pedigreed counterparts. Relevant work experience and level of academic attainment seem to have no bearing on who makes up the long-term unemployed.
The problem’s gotten perilous enough that in January 2014, the White House unveiled a robust initiative to kindle new recruiting and hiring efforts. Long-term unemployment can be incredibly detrimental to the economy. There are, according to August 2014 labor reports, 4.8 million unfilled jobs in the country. It would seem logical that businesses tap into the vast pool of available talent to fill these gaps. However, that doesn’t seem to be occurring, perhaps because there is a traditional stigma associated with the long-term unemployed. In days past, there may have been valid reasons for this presumption. Times now are different. The circumstances and catalysts are not the same. And talent on the verge of abandoning the workforce represent a missed opportunity for businesses.
The folly of prejudices against the long-term unemployed
Workers who have been without jobs for six months or longer form an underutilized and overlooked pool of available talent. Consider this: the lack of in-demand skills and educational qualifications are not factors in the current situation, and because we’re steadily moving toward an economy dominated by skills, smart recruiters can seize the opportunity to find qualified candidates by seeking out the long-term unemployed.
Too often, we find that veterans and the disabled are passed over for employment considerations or not given a fair shot to demonstrate their abilities. Right now, the long-term unemployed have joined those same ranks. According to several academic studies conducted on this topic, job applicants who’ve been unemployed for six months or longer receive 45 percent fewer callbacks than people out of work for only a month.
The long-term unemployed face a number of hurdles. Their skills begin to diminish. Their industries may have experienced dramatic changes. And many have become so discouraged that they simply give up. It’s not just a loss to the workers, it’s a loss to the business community itself. In the past, long-term unemployed talent may have lacked the skills or qualifications to be competitive in the labor market. It used to be that companies kept their best and brightest during layoffs and downturns. That’s simply not the case anymore. With companies still fighting to drive their profits up during the slow recovery, many have let qualified talent leave, preferring instead to retain lesser-skilled employees who cost less on the payrolls.
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.”
There persists a strong bias against the long-term unemployed that simply makes no sense these days. Companies need skilled workers. Skilled workers have become part of the long-term unemployed. Companies won’t hire them because of bygone and outdated prejudices. Even worse, the automated prescreening configurations in a lot of applicant tracking and recruiting systems rule out workers who have been without jobs for more than a couple of months. And the longer this talent remain unemployed, the more their skills languish. It is truly a vicious cycle in which everyone is losing.
Economist Rand Ghayad even found that companies actually favored job applicants with no relevant experience over high-caliber talent from the same industry who had been unemployed for a long stretch.
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. Aggressive efforts should be made to seek out and consider the long-term unemployed, following the examples of 300 leading businesses championing the White House’s initiative. As Xerox pointed out, the best hiring practices involve matching the skills of applicants to those needed by employers -- not making presumptions about why jobs have been difficult to come by for them.
When Frontier Communications stopped using resume screens, the White House study showed, the telecommunications giant hired more than 250 people from the ranks of the long-term unemployed, representing about 20 percent of the company’s hires. Critical positions were filled, and talent got back to work.
Candidates hired by U.S. Bank, another business supporting the White House program, said the company chose to look at them as whole people with years of experience -- not people incapable of finding work in the aftermath of one of the worst economic disasters in history. And that’s a significant contributor to the problem today: the economy has grown by only an annual average of 2.25 percent since 2010 -- far below the historic 3.3 percent pace of U.S. growth since 1929.
Employers that are having trouble filling positions have only to ponder their own obstacles in the hiring process to discover why talent are struggling to find work.
Benefits of engaging the long-term unemployed
Companies that open their minds and realize the unique assets, perspectives and talents of these workers can benefit by building eclectic and diverse teams of professionals, while forging a stellar employment brand in the process.
Those enterprises that hire the long-term unemployed also experience higher retention rates and reap the rewards of a more loyal talent base, according to the White House report “Addressing the Negative Cycle of Long-Term Unemployment.”
However, the overhead and the 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.
Skills-based sourcing expertise
Staffing professionals are well-versed in the most current sourcing strategies, and 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 more. 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
Talent networks and partnerships
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.
Top of the maturity model
Unlike government vocational services, staffing professionals have already reached the top echelons of recruiting maturity models. 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, or can readily establish, formal 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.
• Savvy staffing leaders can guide organizations, and even public intermediaries, in designing ongoing 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 robust employment brand initiatives. They can conceptualize and execute niche campaigns that showcase an employer’s commitment to recruiting the long-term unemployed, promoting the cultural values that will positioning the organization as an employer-of-choice for other prospective talent in the community.
A scenario in which everybody wins
In response to the White House’s January 2014 call to action, which has been celebrated and embraced by over 300 companies from a variety of business communities, Deloitte Consulting joined forces with the Rockefeller Foundation to analyze the issues surrounding long-term unemployment and find solutions.
“The long-term unemployed can bring real value to your company -- they are a qualified and motivated talent pool that you may be inadvertently overlooking,” the study concluded. “Hiring the long-term unemployed can also achieve business objectives: investing in local communities, realizing corporate social responsibility goals, and increasing the diversity of your hires.”
Enterprises and agencies that engage experienced staffing professionals with proven resources, cutting-edge recruitment methodologies and established networks will help put hard-working Americans back into economy, fill millions of open jobs and increase the productivity of businesses across the nation.