Is recruiting causing unemployment?
- Everyone thinks they can recruit and select, probably better than a HR practitioner.
- It has generated the development of such a large industry that companies like LinkedIn want a piece of the market.
- The rate of unemployment and underemployment do not seem to be in any way affected by the exponential growth in number of recruiters.
It is #3 above that I find really interesting. Businesses complain that they are unable to fill open roles; recruiters complain that they are having difficulty convincing businesses that they can fill these roles; and candidates complain they can’t find a job. At the same time, there is constant growth in the number of recruiters, growth in the number of people unemployed and growth in the level of difficulty businesses seem to experience finding people to hire. Something is amiss!
As a newly converted capitalist, I think markets correct themselves unless there is an inherent flaw in the manner in which an element of the market is operating or some element of the market is being unduly interfered with or manipulated. I think the same applies to this problem. I don’t think talent is hard to find, I think recruiting may be the problem. I think the way in which recruiting is done is what may really be driving unemployment.
Yes, that may sound strange, but if we were to take an honest look at what is involved in the recruiting and selection process we would see that some elements of it are really pointless and may even be creating an artificial scarcity of labor. Of course I am aware of the theory that the issue of labor scarcity is a matter of skills mismatch, meaning the skills that are in high demand are in low supply and the skills in high supply are in low demand. However, that may be only a part of the problem.
When recruiting talent, a significant amount of value is ascribed to experience and feedback from references. I think this tendency causes a large number of candidates to be filtered out of the process, even from as early as the resume review stage. So an artificial scarcity of supply is created.
The idea of placing a high value on experience may very well have its root in the ideas of Albert Einstein. Einstein said that the only source of knowledge is experience. That might have been true at that time, when most jobs were not very complex and information was much harder to come by. But I doubt that to be true today. A recent meta–analysis about the effects of work experience on job performance showed that the only correlation between performance and experience is when a specific task is carried out repeatedly and most importantly—carried out well. The research indicated that time spent in a particular position does not translate into either knowledge or skill. Doing something for a very long time does not mean you are good at it. Jeff Fluhr (Co–Founder of StubHub) was quoted as saying that personality traits, levels of optimism etc. are far more important than experience. He claimed that the reality is that if you get someone who is smart, hungry and has a can–do attitude they can figure out how to do A,B and C because there is really no trick to most things at work.
This obsession with experience doesn’t really make sense in a society where we have already outsourced much of our mental processing to Google anyway. This means that information and by extension knowledge rarely exists in the minds of just a few as it did in Einstein’s day. Most information can be acquired through a Google search. Not only is this obsession with experience unnecessary, it also opens the door to human rights violations. It allows employers and recruiters to exclude immigrants on the basis of lacking “Canadian work experience”. This is so common that most people don’t even realize it is actually an illegal hiring practice and violates our human rights code and discriminates against immigrants on the basis of origin.
What about calling up references? It has always been fascinating to me how willing people, are in a reference check scenario, to accept the opinion of someone they have never met and have no reason to believe is a good judge of character nor even a good employee themselves. In my view, these kinds of opinion based reference checks would only be useful if the company you are calling, to give an account of a candidate’s capabilities, does things exactly as your business does and has the exact same culture, vision and management style as you do. Opinions are just that…an opinion. Reference checks wrongly assume that the person giving the information actually knows the candidate well enough to speak definitively on their capabilities. We have all had a boss that did not know even his job well, let alone the job of the people being managed.
Of course it is not possible to consider the thousands of unemployed Canadians for each vacancy so there has to be some method to filter the candidates most likely to perform well in the role. The answer is not experience and reference checks it is in determining correlations. This means conducting real internal organizational research to identify what factors are positively correlated to success within your business. The next step is to identify a method of applying the correlations identified to as large a pool of candidates as possible in progressively more refined ways.
In this way selection is positively correlated to success, as defined by the specific business, and not by length of experience that may or may not be relevant two years down the road.
 By references I do not mean background checks. Background checks are more fact based than reference checks, which focus on someone’s account of a candidate’s past experiences.
 Quinones, M.A., Ford, J.K., & Teachout, M.S. (1995) The relationship between work experience and job performance: A conceptual and meta-analytic review. Personnel Psychology, 48, 887-910. AND Rowe, P. M. (2015).
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