A Harvard Business School report has revealed that automated resume-scanning software contributes to the US's broken hiring system. Employers use such software to screen job applicants. However, it is incorrectly rejecting millions upon millions of potential candidates, according to the authors of the study. Hidden workers are people who are willing and able to work but are prevented from getting jobs due to structural issues in the labor market.
Although there are many factors that can prevent people from finding employment, the study's authors say automated hiring software is the most important. These programs are used in the USA by 75% of employers, and 99 percent of Fortune 500 businesses. They were developed in response to an increase in digital job applications in the 1990s. It is now easier than ever for people to apply for jobs and for companies to reject them.
Automated software is based on too simple criteria
Although the exact mechanism of why automated software rejects candidates is complex, it generally results from using too simplistic criteria to separate good applicants from bad.
Some systems will automatically reject candidates who have had gaps in employment for more than six months without asking why. This could be because the candidate was pregnant, caring for a sick family member or because it is difficult to find a job during a recession. Joseph Miller, one of the study's authors, cited more specific examples in an interview with The Wall Street Journal. He said that hospitals would only accept candidates who had experience in computer programming on their resumes, when they really needed workers to enter patient data into computers. A company might reject applicants for a position as a retail clerk if they did not list floor-buffing on their resumes, even though all other criteria were met.
The hiring industry seems to be dependent on too much software. While digital technology was supposed make it easier for companies find qualified candidates, instead it has created a flood of applicants. The study found that the average job posting for a corporate job attracted 120 applicants in the early 2010s. However, this number had increased to 250 applicants by the end the decade. This deluge has prompted companies to implement rigid filters in their automated screening software. This has led to rejection of viable candidates and a large pool of job-seekers.
This software is now a major business. The report states that automation has dominated almost every stage of the recruitment process over the years: candidate relationship management, applicant tracking systems and scheduling. Background checks are also included. Global recruitment technology market grew to $1.75 Billion in 2017. It is projected to almost double to $3.1 Billion by 2025.
These problems are not unknown to companies, however. Nearly 9 out of 10 executives who were surveyed said that automated software was incorrectly filtering out qualified candidates. Some also stated that they were looking for other ways to hire candidates. The study's authors point out that fixing these problems will require a complete overhaul of the entire hiring process, including how software is deployed and where candidates are sought.
