Refusing Applications from the Unemployed: Best Practice or Madness?

Is it a good idea for firms hiring to purposely exclude the unemployed from consideration?

If you missed the news last summer (June 2010) about the growth of this practice, then you might be scratching your head and thinking to yourself, ‘that’s crazy.’ However, for those that follow trends and deal with job postings daily, it’s clear that postings increasingly contain some variation of the phrase “you must be currently employed in order to be considered.” For example, a posting made last week to CareerBuilder by an Alabama restaurant chain made the requirements crystal clear by putting the word “currently” in all caps.

“Must be CURRENTLY employed as a restaurant manager”

Finding examples of the phrase in use is not difficult; postings can be found on all of the major job posting sites including Monster, CareerBuilder, and Craigslist. The increased usage of this practice can most likely be attributed to a growing percentage of unemployed persons who have remained unemployed for more than 18 months. While not a proven fact, many assume that prolonged unemployment leads to deterioration in skills and knowledge, or obsolescence in roles where knowledge becomes obsolete quickly. Refusing to consider the unemployed is not a practice limited to a few professions. In my research, I found ads for manufacturing roles, medical provider roles, and law firms.

This practice raises a great deal of emotion among both the unemployed and advocates of social responsibility. While I have never recommended this practice, corporate recruiting managers should examine both understand the benefits and drawbacks prior to dismissing/adopting it.

Drawbacks of Refusing to Consider the Unemployed

There are more negative arguments associated with the practice than positive ones, including:

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  • A smaller talent pool — in some cases, layoffs are designed to eliminate poor performers and those with obsolete skills first. However, facility closings also contribute to unemployment, and this hiring restriction would cause you to miss former top performers who were released do the facility closure. If skill obsolescence is the issue driving the restriction, managers need to remember that it is possible for the unemployed to maintain/improve their skills through classes, reading, and self-directed learning. Is also true that some skills like customer service do not deteriorate a great deal during long periods of unemployment.
  • Potential legal issues — although the practice is not illegal (unemployed people are not a protected class under U.S. law), it may certainly result in an adverse impact if the unemployed population is disproportionately made up of protected individuals.
  • Employer brand image — this practice may result in a barrage of negative comments and questions from the media, your socially conscious customers, and even your employees. Most firms remove the restriction when the press begins to call.
  • Lost sales — if the unemployed have been, are now, or will be future customers, you can expect your sales to be negatively impacted if there is a large amount of negative publicity.
  • Desperate people will ignore it — because unemployed people are “hungry,” it is highly likely that they will work hard and be loyal. It is highly likely because of that hunger or desperation that many of the unemployed will simply ignore your limitation and apply anyway. As a result, you may still have to sort through almost as many applications.
  • It runs counter corporate social responsibility “talk” — while many firms that claim to be socially responsible rarely move past talking about it, if your firm truly tries to be socially responsible, this practice would most definitely violate all adopted standards.
  • Missed tax breaks — if you refuse to hire the unemployed, you will miss out on some significant tax breaks.
  • Lost wage rightsizing opportunity — skills increase and decrease in value, but rarely do firms adjust wages downward. Refusing to hire the unemployed, who would be more likely to accept a reduced wage, ignores an opportunity to help adjust real wages to actual market value.

Obviously the ability to adopt this practice and the impact it would have varies around the world and from organization to organization. Government agencies and not-for-profit organizations would never consider such policy, and firms that count the unemployed among their key customers would suffer more economically post adoption.

Benefits of Refusing to Consider the Unemployed

The primary driver of refusing to consider the unemployed is a desire not to hire someone whose skills have grown rusty, who has lost their contacts, or that possesses outdated knowledge. Some of the other benefits driving adoption of this practice include:

  • Reduced new hire time to productivity — hiring individuals who are sharp and “not rusty” means that the new hires will reach their “minimum productivity levels” much faster.
  • Reduced training costs — if new hires have obsolete skills and outdated knowledge because of their long period of unemployment, the organization would need to invest more in training (compared to currently up-to-speed individuals), thus raising costs and lowering the ROI of the hire.
  • Current contacts are needed — in some jobs, contacts and continuing relationships are essential. Although it is unfair to assume that all unemployed fail to maintain their contacts, it is also sometimes true that key individuals don’t have the same interest in maintaining relationships once someone loses their title and power.
  • Knowledge of current technology is needed — in jobs where large enterprise-wide technology (both hardware and software) is continually updated, working knowledge of the latest generation of technology is required. Unfortunately, unemployed individuals cannot easily maintain their fluency on technology that is not available to someone outside of a corporation.
  • Reduced recruiter workloads — reducing the number of applicants (because of recruiter or hiring manager bias against the unemployed) lightens the workload of both recruiters and hiring managers. Because every applicant has the right to file a complaint or to sue, reducing the number of applications could conceivably reduce your legal risk. For resource managers who must calculate the likelihood of success, the question must instead be “what percentage of the unemployed are top performers and is the ratio high enough to justify the cost and time involved.” In a resource-limited process, probabilities must rule over emotion.
  • Increased learning from competitors — hiring exclusively from among those currently employed increases the chance that you will learn about a competitor’s current best practices during interviews and upon hire. If you want to proactively “hurt” or learn from a competitor, hiring its best current employees is clearly superior to hiring individuals who may not have worked at a competitor previously.
  • An abundant talent pool — even if firms exclude the unemployed, in most states 90% of the population is still available to them as potential hires.
  • Lower turnover rates — currently employed individuals are at least theoretically more likely to take a job and stay in it for a while. The unemployed, because of their weak economic situation, may be “forced” to accept any job initially, then may trade up the moment better opportunities arise.

Final Thoughts

All good recruiters should know what the competition is up to. Whether you agree or disagree with this particular practice, the concept of restricting applications to save time, money, and to avoid legal issues is here to stay. Organizations have begun to learn the most effective and legally viable methods to reduce applications from applicants who have no real probability of reaching the interview stage. Restricting applications from the unemployed is a controversial approach, but others do exist. Realistic job previews, more distinct job descriptions, discouraging text on the application, and requiring applicants to pass a preliminary assessment screening are options for reducing not-qualified applicant volume.

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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41 Comments on “Refusing Applications from the Unemployed: Best Practice or Madness?

  1. Neither best practice nor madness: rather just immoral, stupid, and begging for trouble.

    Employment status is never going to be held as a BFOQ, failure to consider members of protected classes will get you drilled if you are a federal contractor, and increasingly, the EEOC and OFCCP are working from the same page.

    Show a little courage here John- it’s not a “controversial approach”, its a hateful abomination that will be outlawed in short order if enough organizations attempt to do it overtly (we all know that many more will covertly continue to discriminate in all kinds of ways).

    Class war is the new thing in America. I fear that we are going to have to choose sides, or have our side chosen for us, before it settles out.

  2. John, you certainly covered a comprehensive list of pros and cons in this controversial subject. I look forward to the debate that this topic may spark. Certainly, there can be passionate stands taken on both sides, as many of your points clearly give grounds for them. Those who are business owners may have a strong opinion on this as there can be clear benefits to hiring those currently employed, although then you have the ethical question to deal with as Martin has pointed to. Those on the other side of the coin will certainly argue that this is not your father’s economy and the old HR adage of “job-hopper” is less valid as top talent may not always be hopping when moves are made – but rather becoming collateral damage by an economy that has taken its toll on even the best of companies.

    Your article brings two points to mind.

    The first is relevance. In reality, how many of these positions that are being posted have actual impact on what the search industry works on. After reading a Shally Steckerl Tweet about Bob Marshall’s Bureau of Labor and Statistics (BLS) article on unemployment data, I wrote about it in a blog post as well (http://blog.searchentrepreneurs.com/2010/08/16/unemployment-rates-and-recruiting/) and the bottom line of it is that most recruiters don’t even have an issue as the majority (if not all according to Bob) of those we recruit for our clients are currently employed. Those that are unemployed are not, for the most part, the professionals our clients seek.

    The second point is regarding our role. As search industry professionals (recruiters, headhunters, talent brokers, etc.) one of our primary objectives is to present the best options to our clients even when they do not clearly see it at first. When we partner with our clients to bring them the top talent that will be the best fit for their organization and bring the most value, it demands that we look at ALL of the available talent pool, not just those they tell us to look at. The best person for the position is the one that will have the greatest positive impact on the company. Sometimes this means that we have to tell the best story, get the client to listen and see the benefits of considering someone outside their initial viewpoint.

    Beyond whether it is illegal, immoral or just bad business, companies should find a better way to screen potential hires than drawing the currently employed line in the sand.

  3. The best new hire may be currently unemployed. Excluding any potential pool of candidates is bad business and seems like a good way to miss out on a good hire. This seems like someone is just too lazy to consider any and all potential candidates. They could get way fewer by posting “must be exactly 6.236 ft tall to apply” if that is their goal.

    Ignoring the unemployed is bad business and at the least is just plain lazy recruiting not to mention all the social issues.

  4. Hmmm…for TPR’s I would venture that less than 1% of submitted candidates are unemployed – its not what clients use recruiting “hired guns” for – this is probably even more prevalent for contingent recruiting than retained (no hires, no pay)…

    Beyond that, there are two things to take into account. First, as John mentions, is the concept of excluding the unemployed as a way to limit the number of resumes to wade through. Personally, I don’t buy this as there are much better screening methods. The increased advent of using Career Communities to gain a greater degree of knowledge about potential job interview subjects makes this a moot point – as the best person to interview for the job will emerge based on knowing broader details beyond the current job status.

    Secondly, the huge number of Gen Y candidates won’t understand it since as a group they are ingrained to focus on opportunity – not career… Being without a job is not looked down upon for these folks and with so many of them (estimates of 80MM) – this practice may disappear as long as they don’t assimilate to past norms as the Boomers did…

    Either way it is bad business and should be discouraged or outlawed…

  5. I might have added: what if a person has been unemployed for a day, or a week, due to layoff (e.g. public-sector or company folded)?

    Or in the case of GenY candidates (esp. creatives) if they have been legit self-employed ?

    We had a creative who went to work for herself because her husband was getting a PhD in genetics out west. The poor guy turned up with Ewing’s Sarcoma and died @ 28 years old last week. Should she now be unemployable? The question answers itself……

  6. so I agree that this is bad business practice for an employer to state this and am surprised they are using these terms in a job posting

    however, there is one large piece you forgot in your analysis you forgot to mention – this has been going on for years and is the dirty known secret in the recruiter industry it was just never blatantly said out loud- why do you think we have “headhunters and agencies” they typically go after the employed individuals and cold call into those companies. SOOO if you “outlaw this practice you are outlawing a whole piece of the recruitment structure

    thoughts?

  7. Employment status may say more about the applicant’s former employer than it does the applicant.

    “Reduced new hire time to productivity…”

    Unless, of course, the employed new hire was about to get fired, laid off, riffed, or quit which means the new is really the tomorrow’s rejected candidate.

    “Reduced training costs…”

    This is true only if the unemployed have no long term memory.

    Obsolete skills and outdated knowledge are probably as common among the employed as it is among the unemployed.

    “Current contacts are needed…”

    If an employee jumps ship and lands on our deck we can rest assured that the next ship he lands on will be as happy as we were once upon a time.

    “Knowledge of current technology is needed”

    I’m amused that experts think that hiring an employee away from their employer is a sign of future job success.

    Don’t interviewers inquire about applicants’ knowledge about technology both hardware and software? Are the interviewers incapable of assessing applicant competence?

    “Reduced recruiter workloads – reducing the number of applicants (because of recruiter or hiring manager bias against the unemployed) lightens the workload of both recruiters and hiring managers.”

    The goal is to lessen the workload of hiring manager and recruiters? I think not.

    “Because every applicant has the right to file a complaint or to sue, reducing the number of applications could conceivably reduce your legal risk.”

    We may increase our risks since every unemployed applicant is arbitrarily screened out. Seems to me the defense for such poor business practice will not convince a jury that employment status is a bona fide occupational qualification BFOQ.

    ————-
    The following is from
    http://law.yourdictionary.com/bona-fide-occupational-qualification

    bona fide occupational qualification law definition

    Employment practices that would constitute discrimination as to certain individuals of a particular religion, gender, national origin, or AGE RANGE…

    ———-

    “For resource managers who must calculate the likelihood of success, the question must instead be “what percentage of the unemployed are top performers and is the ratio high enough to justify the cost and time involved.”

    The answer to the question is easy, about 20% of the qualified to be hired unemployed applicants, as will 20% of the employed applicants, will become top performers if hired. The secret is to know how to identify the future top performers.

    “In a resource-limited process, probabilities must rule over emotion.”

    Then we are safe to toss out this silly “hire the employed only criteria.”

    “Increased learning from competitors”

    Perhaps the unemployed know stuff as well.

    “An abundant talent pool’

    You mean until the next smart recruit talks them into leaving.

    “The unemployed, because of their weak economic situation, may be “forced” to accept any job initially, then may trade up the moment better opportunities arise.”

    Managers who do not hire for talent are behind the eight ball whether hiring employed or unemployed applicants.

  8. If the objective is to upgrade the talent pool, in order to minimize the workload, while improving the outcomes, there are, as Dr. John pointed out, better ways to do that.

    Indeed, savvy employers can use basic qualification screens to great advantage. They can even systematically reduce the number of “applicants” for whom they must keep compliance documentation. Employers are only required to keep documentation on those whom they consider for employment for particular positions. Employers should not consider any jobseekers who do not meet basic qualifications.

    Looking at the O*Net content model library of nearly 1,000 jobs, I have yet to find one job where “Integrity” was not on the list of required “Work Styles”, along with the annotation “Job requires being honest and ethical”. O*Net is sponsored by the US Department of Labor/Employment and Training Administration (USDOL/ETA) and “is the nation’s primary source of occupational information”.

    Let’s look at some bearing facts. Retail employees steal as much from their employers as shoplifters do – i.e. both about 20 billion a year in the U.S. Guess what? By definition, those thieving retail employees are employed. Roughly 80% of adults who abuse drugs and alcohol hold full time jobs – hello, employed.

    Assessments (e.g. Step One Survey II) can measure integrity, reliability, work ethic and attitudes toward substance abuse. Roughly 50% of the population cannot measure up on one or more of these criteria. If you want to separate the wheat from the chaff, start there. Screen out five times as many jobseekers as you would by excluding the unemployed and with a much higher likelihood saving time and money, while improving hiring outcomes.

    Employers want honest, dependable, hardworking, drug-free employees for every job – i.e. from mail room clerk to CEO, and everything in between. The best way to accomplish that is to make sure that all applicants, for all jobs, take integrity, reliability, work ethic and substance abuse assessments, as part of the basic qualifications screen.

    Skills tests provide a much better way to test skills than applying the how-many-months-unemployed test. Like integrity tests, skills tests also provide a low-cost way to avoid hiring mistakes. And, while skills tests are often administered in the “applicant” context, some skills are certainly universal enough in their “job-relatedness” to constitute legitimate “basic qualifications” for a range of jobs.

    Richard Melrose
    R.melrose@vision21.us

  9. It has always struck me as one of those long-standing, backwards mindsets amongst those making hiring decisions, that somehow the unemployed deserve to be so, and the currently employed are somehow better qualified.

    It’s old-school dogma, and incorrect, not to mention, forgive me, idiotic for hiring professionals in 2011 to still believe.

    It’s reminiscent of the “we have always done it this way” syndrome, as if having done it “that way” for so many years validates it as being correct. And it doesn’t, it simply means you have done it incorrectly for many years, and likely longer than most other employers.

  10. Kim – you’re absolutely correct that hiring employed people has been the cornerstone of the TPR world – its what a TPR does as you point out – and it has been for the most part an unspoken cornerstone…I would submit that social recruiting is the key reason that it has even been raised as an issue. People are talking to each way more than they ever did about jobs, careers, and the like…

    Being sure that a company does not exclude an unemployed worker from the hiring mix will not change the tactics of the TPR community – it will merely add the caveat that all will be considered…if it is actually made into a rule of some kind – it will probably have as much effect as the Rooney Rule does in the NFL where teams must interview a minority candidate before hiring the middle aged white guy they already covet…(In fairness, I’m sure there are a few teams that actually do follow these guidelines in a fair way and there are a few minority Head Coaches…but it seems that this is not the norm).

  11. Much of the workforce has already shifted to serial employment. Serial employment, by nature, is likely to have gaps of unemployment. Negative views about the unemployed will change.

    Unemployment should only be problematic when the applicant simply doesn’t match the need. Right now, any company using “unemployed need not apply” has a smaller, more costly pool of applicants. Any business person or HR professional that encourages or enables that thinking is just wrong. Oh, and those same small-minded company leaders are walking hypocrisy at it’s best. How many companies no longer set the tone by creating pay, benefits, and work place environments and practices that the already or still-employed want? No, instead, most companies just benchmark themselves to the middle or not to stand out.

    Bottomline – it doesn’t make good business sense no matter how you look at it.

  12. Hi – I’m new to your community, courtesy of a colleague who shared Dr. Sullivan’s treatise with Career Directors International. As a group, we have recently been lamenting the sheer volume of job postings our clients are finding with exactly this caveat. Thank you all for your input on the topic.

    May I add another dimension, from a resume writer’s and job-search coach’s perspective?

    “UNEMPLOYED NEED NOT APPLY” is really no different from what our clients have faced throughout the 20 years I’ve been in the careers industry. It is ALWAYS better to look for employment when one is employed. This year, employers are simply being more brazen about announcing that truism.

    An issue that was not addressed in this article is, I believe, an elephant in the room: Many of those who have been unemployed for prolonged periods have been sustained by government handouts. Their work ethic may be in question. More than a few prospects have come to me in the past year with a story that begins, “I felt I deserved a vacation after I was laid off, and I used the first few months to relax. Now I’m finding that the job market is tougher than I expected it would be.”

    I’m not taking sides here, just trying to be realistic. In the Great Depression of the 1930s, everyone found work, found benefactors [family, church or charities], or starved. Now everyone who is out of work can depend on governmental agencies to provide a modicum of relief. One person I know was provided enough unemployment compensation in NYC to survive for 11 months and remain in an apartment in the city. Some folks are a bit too comfortable when unemployed. Perhaps this is another reason that some companies are opting out of this candidate pool. Just a thought…

  13. As one of those unemployed individuals currently searching for a new opportunity, let me tell you it’s damn frustrating to come across a job posting that you are more than qualified for to see that they are only searching for those individuals who are currently employed. This is out and out discrimination, pure and simple.

    Those employers should put themselves in the shoes of the unemployed. There is a rich, experienced talent pool of workers who are being told in no uncertain terms they are not worthy or not good enough to be hired due to circumstances most likely out of their control. On the flip side, the comment was made about the Gen Y’ers that they mostly look for a opportunity of work and not on career. How do employers feel about those individuals who are only looking to work for a couple of years with them and then move onto the next opportunity. Retaining costs are a definite drain on the company’s bottom line. If you hire someone who is unemployed and needing a job, they will most likely repay you in some company loyalty, thereby reducing training costs.

  14. John:

    Thank you for your outstanding look at the rise of this trend; we agree with you (and many of your readers, it seems) that while discriminating on employment status is a legal gray area, it’s far from a best practice, and screening out potentially top talent based on this criteria might very well be ‘madness’ for talent organizations, but is unquestionably bad business, for candidates and employers. That’s why here at Monster, we work to enforce our job posting terms of service, which prohibit any form of discrimination against job seekers. Here’s a recent post by Patrick Manzo, our global head of privacy and customer service, detailing our stance on this growing trend: http://bit.ly/goocNK

    We’re doing our part here at Monster to put a stop to this practice, and are encouraged that this issue is getting the attention, and outcry, that it deserves.

    Matt Charney
    Social Media Engagement Manager, Monster Worldwide
    @monster_works | http://www.monsterthinking.com

  15. A “modest proposal” to mimimize the number of postings that say “Unemployed need not apply.”:
    Fire any manager who posts something like this and have them immediately and publicly escorted out of the building. The word will get out….

    Meanwhile, I love when I see mean-spirited people posting positions as described or proposing to do away with our modest social safety nets- it shows that I’m on track when I talk about the GAFI Principles (Greed, Arrogance, Fear, and Incompetence/Inefficiency) ruling business over pragmatism and enlightened-self interest. It also shows why we need need effective outside rules and regulation to keep these rapacious people and organizations in check, because THESE folks won’t self-regulate.

    Cheers,

    Keith

  16. Hmmm. I wonder if there are any class action suits being filed against employers who post such criteria?

    -Keith

  17. @Debra – I am confused by your “truism”. What is the “truism” in your perception? If it is “It is ALWAYS better to look for employment when one is employed.”, then clearly you missed the point of the article. We are discussing denying unemployed applicants from consideration for a given job, or jobs in general, not when it is optimal to find work. The perspective within this article is the employer, not the potential employee/job seeker.

    My other thoughts on your response:

    Firstly, by government hand-outs you are referring to unemployment compensation? If so, I would like to remind you that we pay into that, so it is hardly a “hand-out”.

    Secondly, your statement “Their work ethic may be in question.” is, frankly, a bit laughable, if you are applying that blanket to all those unemployed based solely upon the 2 or 3 or even 8 you personally encountered, and thus may have provided your perceptions with some modicum of validation. Most people did not choose to be unemployed a), and b) don’t choose or wish to be unemployed for any length of time. Why? Um, you guessed it – because the $300/$400 you get every week just doesn’t cut it. So work ethic? Please.

    Thirdly, your knowledge of history is, well, lacking to say the very least. For example, your statement: “In the Great Depression of the 1930s, everyone found work, found benefactors [family, church or charities], or starved.” Wholly wrong on the facts. Look up the New Deal-the WPA, etc., and other government programs of that era, and that’s just for starters.

    Lastly, your statement: “Perhaps this is another reason that some companies are opting out of this candidate pool.” This may be so, for some narrow-minded in Recruiting/HR/Hiring Management, but it does not mean it is anything less than short-sighted, unproductive, prejudicial, and net-net – bad business.

  18. Their are more people that are taking the time to garner further knowledge in their field of interest while not employed. It is an assumption that the person would have outdated skill sets, or would not be able to hit the ground running upon hire. Also, I do not agree that contacts become “non-important”. With sites such as Linkedin, and other social media sites, people are continuously making contacts and keeping in touch with former employees.

  19. The culture at the companies with such a hiring practice must be very closed, not open to risk takers. For if their theory were to prevail, one would always need to have another opportunity in line before taking a risk that could land them out the door with an “unemployable” target on their back. Innovation comes from a certain level of risk. I will make note not to work for an employer with such a policy in the future. If they had their way, a person who is fired for theft, a person who quit to take care of a terminally ill family member, a person who quit because a manager was asking them to be unethical are all the same. The circumstances for departure are all very different. As people participate in networking events and continuing education opportunities during their gaps they make themselves even more valuable.

  20. Many years ago, I and others at my level were tasked with developing a “bench” of potentially recruitable managers for our future expansion needs. During the course of the planning discussion, the Director of HR made a bold statement…quoted almost verbatim: “Please do not bother looking for potential managers at (company x,y,z)…there is just nobody there good enough for our needs”.

    It is the same disgusting arrogance and mind-numbing stupidity that brings similar people to the same conclusion about unemployed candidates. Any company that would tolerate such arrogant foolishness is clearly not “good enough” for a talented person who happens to be unemployed.

  21. Great post Jim,

    We as recruiters deal on a daily basis with this narrow minded thinking of hiring employees. I will say I am currently working for a company as a consultant who for the most part does not take this attitude towards the unemployed. In fact,I have recently hired several folks who were unemployed for more than a year. Each candidate needs to be considered for what they bring to the table in relation to the skill sets required and nothing more.

  22. “CURRENTLY employed” doesn’t count for much.

    Half of those “CURRENTLY employed as a restaurant manager” are below the performance median on Revenue Generation. Half are below the performance median on Cost Control. The same holds true for Customer Satisfaction/Loyalty, Food Waste, Shrinkage and or any other key performance indicator for restaurant managers.

    More than half of “CURRENTLY employed” restaurant managers are sub-par (below median) on two or more of the top five key performance indicators.

    The number of sub-par “CURRENTLY employed” restaurant managers” likely to apply exceeds the number of unemployed aspiring restaurant managers by a very wide margin – i.e. five to one, or more.

    So don’t expect this “exclusionary” strategy to weed out clunkers. Indeed, expect the worst clunkers to preferentially apply, before their sub-par performance catches up with them at their current employer.

    The same statistical conclusions apply to any job.

    “CURRENTLY employed” doesn’t count for much. But, apparently the practicing Neanderthals can’t figure that out for themselves. No surprise.

    Responsive, high-performance selection processes depend upon using the right tools and techniques, in the right way, at the right time – first to screen out, then to narrow the field and then to consistently make superior hiring decisions, based on uniformly applied, valid, job-related criteria. The same professional approach puts a check in the compliance box.

    Richard Melrose
    r.melrose@vision21.us

  23. Awhile ago, during an earlier recession (I forget which one), a business unit GM, in response to several of my submissions for his search for a Finance Director, engaged me in the following conversation:

    “I’d like to interview everyone except Jack.”

    “OK, but what’s wrong with Jack?”

    “He’s unemployed.”

    “Well, yes, but he was caught up in a layoff that affected over 20% of his company’s management team. Many positions were eliminated, including his. He has references to verify this was in no way related to his performance.”

    “And you believe that?”

    [Insert a few seconds of silence here. Client continues…]

    “First of all, Jack’s in our industry. Our HR people confirm he’s never sent us his resume. He’s been unemployed for 4 months. Aks him why he missed us.”

    “OK.”

    “After that, ask him why his company decided he was one of the 20%, and not one of the 80%. At Jack’s level, the reason’s often more about relationships and politics than results, but those things matter. The last thing we need here is an executive who can’t do politics.”

    “Never thought of that.” [Remember, this was awhile ago.]

    “Finally, I have a question for you.”

    “Sure.”

    “Why would I pay your fee, which I figure will be around $50,000 when it’s all said and done, for someone you didn’t have to recruit? You’re a recruiter, right? I hired you because you said you could get us that A-player from one of our competitors who’s too busy succeeding to read our ads. That was your pitch to get the search, wasn’t it?”

    “Indeed it was.”

    “A-players at this level are always working, Ted. They never wind up on layoff lists. If their company gets bought, the new owner fights to hang onto them. If their company goes bankrupt, they get paid to stay and wind things down, or word gets out they’re available and they start getting calls before they have time to put a resume together. We hired you to get us one of those. My HR people can get the rest.”

    “Well, thanks for seeing my other candidates.”

    “No problem. And who else do you have in the pipeline?”

  24. @ Ted – This is the worst sort of agency drivel I have seen in years. “A-players at this level are always working, Ted.” Nonsense, pure, unequivocal nonsense.

    The recent economic disaster affected even the “A players”, so-called. To believe otherwise is to willfully not see the plain simple truth.

    The reasoning here, if I get you correctly, is that you believe that somehow the unemployed deserve to be just that, unemployed, and their credentials and abilities are universally notches below the employed. Really Ted? Really?

    Pure old-school dogrel, nothing more.

    And GM, that’s the Management team you cite to prove your point? Didn’t they go Chapter 11 in ’09? Didn’t the Federal government have to buy them in order to save them?

    So, so much for their Management team Ted, and their 1980 way of thinking.

  25. @Ted:
    Your client is exactly the kind of person who should be fired and immediately frog-marched out the door in front of his subordinates. It’s clear from his attitudes that HE doesn’t understand “relationships and politics”. Jerks like that need to be shown “a bit of humility”
    In the dictionary under “arrogance” it says “see also ‘this guy'”. Bet he was loads of fun to work with.

    Sheesh…..

    -kh

    …..

    Goals
    It’s best to avoid standing directly between a competitive jerk and his goals

    -Despair.com

  26. Gerry – the example Ted used may seem outrageous on face value – but I can assure you from my recent experience that this is not 1980 thinking…I could be wrong, but I would guess that this is the majority of the way most executives think – keep in mind that although the media tends to make headlines with layoff news, the far majority of executives currently working in 2011 have not ever be laid off in their careers. With that in mind its a bit easier to see how they could percieve things the way Ted has described…

    I truly think that this a huge gap in generational thinking…the Internet Generation 18-32 view work as opportunities where the word “career” is something for thier parents – they don’t see themselves ever working 20 years toward a Director or VP level job – they want it now! Whether a person is currently working or not is – well – prehistoric! For Boomers and Gen X, they have put in the years of work to get ahead and to them you certainly don’t get ahead being unemployed. Personally, I think its great that a bright light is shining on this topic – the brighter the more those chats Ted (and I) have with his clients may lessen…

  27. If that is the way most executives think, it is little wonder to me that they nearly destroyed this country over the past few years, and the Federal government had to bail us out of this nightmare.

    And it proves what I have suspected since the beginning of my career – American Management leaves much to be desired, and that’s me being polite. Corporate leadership in the U.S. is, by and large, lacking the basic leadership competency.

    It’s dogmatic myopia, arrogance coupled with an uncanny ability to see exactly what they wish to see, rather than the truth.

  28. It’s comforting to read that a number of people see the evident lunacy of excluding unemployed. John’s list of “benefits” for excluding the unemployed don’t add up to much – they are beliefs not facts. Or are they? That’s my question: who has data showing how well unemployed do as workers when hired compared to those in a job when hired? I want to see the facts, not the prejudices, on either side.

  29. My initial thought was along lines of some of previous comments. Until I started to think about things from an employers perspective.

    Employers are in a difficult position. Few weeks ago I posted an ad on major job board. Salary posted was $70-80,000 plus bonus. Ad identified the skill set necessary for candidate to be considered. Ad didn’t say anything about being employed, only that they needed experience in the position. Received 103 resumes, but only one candidate had ever had any experience in the position. Over half the candidates that applied had never worked in the industry. Many were in entry level hourly jobs applying for $70-80,000 mid management job? It was a total waste of time to review the 100+ candidates. It was also total waste of candidates time.

    If candidates pay absolutely no attention to qualifications and skills posted in the ads, employers have to do something to avoid wasting time. Requiring candidates to be currently employed is poor choice of words. Requiring candidate to have experience in the job they are applying for, makes perfect sense for many jobs.

    Employers also have a moral responsibility to respond to candidates and tell them why they are not qualified. Conversely, job seekers should have moral responsibility to think before they apply for jobs. Previously I was CEO over a niche job board. Over 98% of employers didn’t bother to respond to job seekers who applied to specific jobs. We had response letter templates so employers could send a response to candidates in less than 5 seconds. Yet hundreds if thousands of job seekers failed to get a response every month.

    A few employers do a wonderful job, but majority don’t.

    Right now, we have a lot of ranting going on in employment circles, from both job seeker and employer perspective. It’s time for all of us to back up and be professional.

  30. Gerry: GM meant “General Manager”. And it’s “doggerel”. And it must be difficult, if you’re in our business, serving a clientele you consider so benighted. (Oh, wait. It’s your contention the superior minds of the Federal Goverment rescued the rabble from the “nightmare” your customers created. I’m moving on now.)

    Keith: I seem to have struck a chord. The GM I referenced was the leader of the largest business unit of a company that was, at the time (over a decade after the 80’s ended) one of Fortune’s Top 10 Most Admired. But never mind. What would someone that “arrogant” have over you or I, eh?

    KC: Sensible rejoinder. You and I, we could have a beer sometime.

    All: Old school? Well, guilty as charged, if that means offering a service not easily duplicated by a recent grad with a Facebook account.

    Are unemployed people ipso facto worthy of contempt and dismissal? I hope not, since I’ve been one twice. Are they less valuable as products of a leadership-level search a client is paying a 5- or 6-figure fee for? If you think not, I hope it’s you I’m up against during my next pitch.

    Happy hunting.

  31. Correct Ted, it is “doggerel”, as in “Ted’s entire position highlights what putrid, unmitigated, shameful doggerel spews from certain dark corners of our business.”

    Thank you for that Ted. It is appreciated.

    And you’re indeed right, it is difficult at times, dealing with lemmings who toe the party line, who can only see as far as then end of their nose. You know the type, don’t you Ted?

  32. @Gerry: I agree with what you say. At the same time, werarely have the luxury of picking our clients on the ba sis of their compassion, rather on their ability to pay.
    I do hope taid got 35% out of that jerk…I am pleasantly surprised when I hear about high-level corporate types who AREN’tT like that.

    @KC: One may hope so (attitudes change). Being optimistic, I expect such changes to occur arround the time the economy is getting hit by the Chinese deciding to start backing away from the dollar, and the resulting fun that ensues…

    @Paul: Hear, hear! At the same time, I think it would be very hard (but not impossible) to compare so many possible variables concerning employment and unemployment.

    @Thomas: unless there is an effective way of limiting application to those basically qualified (I think there is), there’s no real way of preventing totally unqualified people from applying to whatever they want to. As far as companies not responding: they don’t because they don’t have to/want to. As you pointed out, your company had an easy way to do so, yet it was largely unused.

    @Ted: Regarding your particular general manager, I suspect he was admired by like-minded folks, and not those who had to work for him. Of course, he may have actually been a fair and decent boss in other ways, but I have my doubts.
    Also as I said before, jerks with money need to hire folks, too.

  33. John, kudos on a well-balanced article displaying the Drawbacks and Benefits. I admit finding insights within both, so I thank you for the post.

    This is a flashpoint subject, such as many that have bubbled up in our space over the last 6 months. Despite all the different (and valid) takes, the truth is that the answer is never black & white. A currently unemployed Restaurant Manager in Detroit is much different than a currently unemployed Oracle OTM Techno-Functional Consultant in NYC.

    Unfortunately, it’s a well known secret that the TPR world benefits from the stigma against the unemployed. After all, the unemployed are often actively seeking and can be found relatively easily by Internal Recruiters. That’s the greatest risk to the Headhunter, and most will validate that the great majority of placement fees come from hiring the currently employed.

    As for myself, I’ve also been privy to conversations like the one Ted had – it’s not an easy position to be in because that Hiring Manager is our Client and we’re expected to deliver on their specifications. Sometimes we can open their eyes that there are certainly diamonds in the rough of the unemployed Talent Pool; unfortunately, many are blinded by this and even if the unemployed Candidate is truly this diamond, they refuse to allow themselves to objectively evaluate such talent. We just have to keep on pressing on and fighting the good fight, believing we will make as much of a positive difference as we can along the way.

  34. To Gerry, Ted, Keith, Josh, Paul, Thomas…here is a story that may shed a more positive light. Before I share it, we all should understand that we all do many different things in the Talent Mgmt arena and what may be common to a retained executive TPR, will seem not just rare, but ridiculous to an internal recruiter with 100 reqs to fill…so we should all try to take a step back and share ideas with this in mind – different lenses will certainly provide a different view! Now that quick story:

    For many years, I owned a retained company that built Talent Communities for Fortune 50 companies for use in multiple hiring initiatives. As a retained and exclusive partner, our deal was that if other candidates did surface, then they would be tossed in to the Talent Community with all the rest – if they rose to the top of the list and were hired – we still got credit. Now if this were a commonplace occurrence, it wouldn’t look good for us, in all those 100’s of placements it happened only once. It was a Sr. Director QA position for a Big Pharma company – managing a team of about 600 people! Not only did we get a candidate “given” to us for a $60K fee – he was out of work, not from a very well regarded company – and yet he made it to the top of the pile…when I interviewed him, I realized within the first 15 minutes that he was not just “top pile” but was probably “the Guy.” If this were a contingent gig or a one off retained one – we’d be toast. Kind of seeing this before sending in our formal review of him – I began to lay the ground work for him not having a job (and saving face for us). The EVP was skeptical, but after reading our review and meeting the guy – he was already predisposed to give him an even shot – and when he loved him, made him the offer (which was a bit less than if the guy had been employed which the EVP also liked) – when it came time to remember the source – it really didn’t matter much. Sure, the HR folks felt a bit bigger headed – but the one that counted, the Hiring Manager, wasn’t concerned. SO the moral is to be sure to develop great respect and rapport with your clients and they will cut you some slack – and to use that respect to present the best person for the job regardless of background and get them a fair hearing during internal assessment…

    It doesn’t have to matter even for TPR’s – sure its easier for retained who get the gigs because of their rep and past success, but the most successful contingent outfits are a success because of the rapport they have created – they get better job order intel, better jobs to work on and have their candidates viewed more often – they can also positively impact an unemployed workers chances if they believe that worker is the best fit for the role – and the best ones do!

  35. As Charlie Chan once said, “Coincidence like ancient egg, leave unpleasant odor!” I believe it’s also no coincidence the recent trends occurring involving the American workplace.

    That being the further dismantling and erosion of the rights of employees. As the events unfolding in Wisconsin and other states reveal, career seekers and employees better wake up. It’s becoming more apparent this pattern of union breaking, employee rights erosion and the trend of justifying denying employment to those who are “unemployed” by corporate America.

    These trends also beg the question why now and not say…10 years ago, hmmmm? If there were ever a time for every career seeker and employee to learn their Basic Employee Rights it’s NOW!

  36. @Yancy: Charlie Chan isn’t cool.
    That being said, employers can readily squueze employees when there’s a high unemployment rate, and we’re likely to have that (>7%) for another 3-4 years. It’s interesting how the robber barons who lost $11T from the US economy aren’t being blamed; instead it’s the ordinary folks trying to do their jobs. Also, the Feds paid $135G to bail out one company (AIG), and we don’t seem to have enough money to bail out the states’ combined $170G shortfalls to keep teachers, cops, and fire-fighters working…. Thank you, Billionaire Koch Brothers (www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer
    ) for showing us the light!

    Keith “Everybody’s a Little Bit Racist” Halperin

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