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High Unemployment Rate Does Not Mean an Easier Job for Hiring Managers

America added 243,000 jobs in January, which brought down the unemployment rate to 8.3% (Dougherty, 2012). The result was better than anticipated, but it is still expected to take a long time before the number drops to 5% or below. A high unemployment rate means that many people are unemployed. Chances are they are all looking for a job. Then, does a high unemployment rate make recruiting and hiring easier?

HR managers will probably tell you how difficult recruiting and selection have become as they need to find the right candidates in “the sea of applicants.” According to Weber (2012), Starbucks attracted 7.6 million job applicants for about 65,000 corporate and retail job openings last year (about 120:1). Procter & Gamble received almost one million applications for 2,000 new positions (about 500:1).

Many companies have to rely on technology to help screen candidates (as seen in the embedded picture and video). Often, job seekers are asked to submit their online application, which builds a data base for the company. Then, a computer program will help the company screen the résumé or applications with “matched” keywords and relevant experience.

Selected candidates may then proceed to the next steps, such as phone or in-person interview(s), assessment testing, background check, etc. A screening system costs between $5,000 and millions of dollars. With the aids of technology, however, companies can cut down the average cost of hiring a new employee to $3,479 (normally, it could cost $5,000+ for each new hire).

The major pitfalls of this automatic screening system come from its validity and reliability issues. It is possible that machines will make mistakes by screening out some quality applicants and/or include some less desirable candidates.

How useful do you think these automatic screening systems are? What strategies can a company take to ensure that the machine can yield accurate and reliable results?

How can job seekers prepare a résumé and an application letter that match the machine’s selection criteria?

Relevant discussions:

References:
Dougherty, Conor. (2012, January 4-5). Jobs power market rebound: Unemployment dips to 8.3% on Broad Gains. The Wall Street Journal. pp. A1 and A6. Also available online
Weber, Lauren. (2012, January 24). Your résumés vs. oblivion. The Wall Street Journal. pp. B1 and B6. Also available online. The picture was also downloaded from this side.

Comments

  1. The underlying concept is amazing! Probably one of the more interesting reads in awhile.!@bose
    Hospitality Career

    ReplyDelete
    Replies
    1. Thank you. I want to be honest of what I think. Plus, I am going to talk about recruiting in my HR class soon. I think this will open up some discussion online and offline.

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  2. With technology rapidly advancing as it does, it was only a matter of time before hiring became automated as well. Nevertheless, this computerized screening process seems extremely fair and economical. In fact, it seems as though a computer may be able to accomplish the earlier screening process much better than a human could. It is sad that such a high unemployment rate necessitates automated hiring systems since the volume of applicants has exceeded human capabilities. But if automated hiring systems can keep costs down, then maybe companies will not have to downsize as much and other employees can keep their jobs. It will be interesting to see how computers in the job search will dictate application changes and how the unemployed will respond. There are always tricks to be learned when searching for a job and the best way to tailor an application for a particular job, potential employees will have to learn how to adapt to a computer's analysis rather than play on human emotion.

    ReplyDelete
    Replies
    1. We will talk about internal recruiting tomorrow --- having some good connections can be very helpful to have a job seeker's resume being seen by the hiring managers. Doing an internship is also a good way for college students to get their feet in the door. There are also some other job search tactics on social media, some of which were discussed in this blog. I hope you will find those suggestions useful.

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  3. Automatic screening systems are useful for large companies that get 100's of thousands of applications for one job. This weeds out the people with low education and credentials. It may remove some quality applicants that could have been great for the job that had insuffiecnt credentials but it saves tremendous time for the employers. The money that could have been made from that quality employee's impact on the company is not worth the time, effort, and money put into the quality recruiting. Maybe selecting a few random people that the automatic screening systems automatically denies for interviews would be a good idea.

    -Dean Seidman (NSD 314)

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    Replies
    1. That could be a good solution actually, but it still takes time and money to ask an extra person to screen the random sample. Often, nobody is checking the validity and reliability issues anymore because "everyone" is too occupied with what they have in hand. It is really a tough call.

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  4. Automatic screening systems can be useful; however, they also can be the cause of serious discrimination law suits. If you consider how many applications these online systems receive and how many of them proceed on to get actual face to face interviews, many applicants can argue they were discriminated against for their given answers, claiming this is why they did not even so much as get an interview. I think this is something to consider because although these companies are saving money and a lot of time, it is possible that they would have to spend a lot of money on cases, even if these cases have a slim chance of winning, the cost of legal help and time spent on a case like this would be equivalent if not more than it takes to go through a normal hiring process.

    Additionally, It would be a shame to miss out on a great employee simply because the "online system" didn't deem them worthy enough. The only way to hire the best people is to actually meet and spend time with them and see their people skills and what they are actually like.

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  5. I think that, while it may still have its problems, the internet is a great tool for recruiting employees. For one, it has potential to make recruiting for a job easier. In the same way that online ads are now tailored to users depending on what websites they visit and what they search online, couldn't it be possible for companies to use a method like this to search for applicants?
    And while a screening program may cost a lot of money, there's no way that companies have the time to personally sit down and interview every applicant anymore, so, when used correctly, online applications can be used as a tool so that employers aren't spending their whole day meeting with people who are wholly unqualified for the job.
    I can see where there would be problems with the programs phasing out candidates who might be worthy, but I think the solution is just not to rely too heavily on them, to let them get rid of applications that are simply blatantly unqualified, and let hiring managers do the rest.

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  6. Automatic screening can be considered useful, however the company should also have an employee who carefully screens all of the resumes, that come in each day. This is so no mistakes are made, and no qualified candidates are taken out of the application process. All though technology is rapidly developing and becoming more reliable, the reality is is that there should always be a human source looking through information for a second look. Automatic screening can also provoke discrimination, even though the computer program does not mean to, which can be a huge problems and possible law suits.

    Everyone should have an equal chance of getting their desired job. Before the resume is turned into the company, the possible employee should be exactly aware of what the company is looking for. The company should list the exact job qualifications on their website, so they know if they actually have a chance of getting the job. You never know if this system is considered to be completely reliable. The person the computer decides does not meet the criteria, might actually be perfect for the job. This is why a second look is always required, along with a face-to-face interview. This gives them a second chance to tell the employer any necessary information they may of forgotten to include in their resumes, and help them get the job.

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  7. While the automatic screening process will inevitably leave out some quality applicants and include some applicants who are not a good fit for the job, it is overall a necessity for companies who get huge numbers of applicants - asking people to sort through applications by hand is simply too costly in regards to time, money, and labor. When the number of applications has been reduced to a more manageable number, that's when a person should go in and look at the applications, and hopefully inappropriate matches will have been eliminated and the remaining applicants will provide valid hiring options.

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  8. Dr. Kwock,
    During class lecture when you addressed this issue you asked us what effect we felt the high unemployment rate had on the job of the manager or the person in charge of employee hiring. My initial answer could not have been more wrong. Until you fully explained the process in class as you do in this blog, I was under the impression that a very large pool of applicants would make the job easier for the employer. It seemed to me that you would have a large group of highly qualified applicants vying for the same job and all you would have to do is pluck out the best one. I had no idea that the cost of screening a potential hire was so high. I cant believe that $3,500 is considered a bargain. I guess that after paying for the initial screening system and using this software hundreds of times over the machine starts to pay for itself. In light of what I have learned I think that these automatic screening systems must be necessary when you must consider a very large number of applicants for a relatively small number of jobs. The time involved to do all this work manually in the past must have been very labor intensive and costly as well. I believe a lot of good candidates may have been cast aside because the job was just too overwhelming so they limited the amount of applications they were willing to accept. This would be unfortunate not only for the applicant but for the companies bottom line as well. Unfortunately some applicants probably get unfairly screened out of the new screening systems as well due to mechanical mistakes but in light of what I've learned I still think this method is the more practical and economical way to go about hiring.I also understand now why in the recent past I have always heard the advice that you should include as many keywords as possible into your resume as you can find written into the job description or hiring ad. The more matches the less chance of getting screened out and a better chance that you will make it to the interview stage. I would think that whomever is in charge of programming their screening machines would have to spend a fair amount of time in choosing exactly what keywords to program into their software so as to garner the best results and produce the best choice of candidates.It also may not be a bad idea for applicants to seek out professional help in preparing their resumes, especially for a highly sought after job.

    ReplyDelete

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