MAKING SENSE -- August 27, 2013 at 10:30 AM ET
Ask The Headhunter: Why America's Employment System Is so Broken
The job board model of hiring symbolizes the employment system's greater problems. Photo courtesy of Bubaone/iStock Vendors via Getty Images.
In this special Making Sense edition of Ask The Headhunter, Nick follows up on a previous column he wrote about job boards, explaining what he thinks is wrong with America's employment system. His regular column, in which he shares insider advice and contrarian methods about winning and keeping the right job, will return next week -- on one condition: that you, dear Making Sense reader, send Nick your questions about your personal challenges with job hunting, interviewing, networking, resumes, job boards, or salary negotiations. No guarantees -- just a promise to do his best to offer useful advice.
A recent column, "Is LinkedIn Cheating Employers and Job Seekers Alike?", triggered good dialogue on this blog and in lots of other media outlets about how companies recruit and hire people. Job seekers rightly criticized middlemen like LinkedIn, CareerBuilder and other database-driven job boards for mindless automation that does virtually nothing to help make good matches between employers and job seekers. In fact, the statistics I presented in the article strongly suggest these middlemen make it harder. Costly marketing campaigns try to convince us these systems are worthwhile and necessary, but that's just putting lipstick on the keyword-munching pig.
Yet that's just the tip of the problem. Recruiting and hiring in America are a disaster of epic proportions -- not because there's a talent shortage, but because the employment system itself is fundamentally broken.
A recent New York Times interview with one of Google's big data crunchers, Laszlo Bock, delivered these indictments of widely-used candidate evaluation methods. Employers can't afford to think about interviewing or hiring without considering what he has to say (emphasis added):
"Years ago, we did a study to determine whether anyone at Google is particularly good at hiring. We looked at tens of thousands of interviews, and everyone who had done the interviews and what they scored the candidate, and how that person ultimately performed in their job. We found zero relationship. It's a complete random mess..."
"On the hiring side, we found that brainteasers are a complete waste of time. How many golf balls can you fit into an airplane? How many gas stations in Manhattan? A complete waste of time. They don't predict anything."
"One of the things we've seen from all our data crunching is that G.P.A.'s are worthless as a criteria for hiring, and test scores are worthless -- no correlation at all except for brand-new college grads, where there's a slight correlation. Google famously used to ask everyone for a transcript and G.P.A.'s and test scores, but we don't anymore, unless you're just a few years out of school. We found that they don't predict anything."
If I were a human resources executive, I'd be scrambling for cover, and if I were on a board of directors, I'd be voting to freeze my company's HR spending until I got some explanations for why this system persists.
In general, employers are really bad at picking people to fill jobs. The entire employment system today is based on gathering useless big data to indirectly assess what a person might contribute to a business. "No correlation," says Google. The trouble is, the employment system starts with the wrong premise: If we define the jobs, we'll find people we can jam into them.
Marketing guru Seth Godin once said, "Don't find customers for your products; find products for your customers."
Employers need to adopt a similar mindset: Don't find people for your jobs; create jobs for talented people.
There's far too much focus on jobs and matching people to them, and not enough focus on cultivating and developing the talents of capable people. There is not enough of building companies from personal interactions between managers and their professional communities, and too much of stuffing job requirements and keywords into databases.
Companies should stop recruiting to fill jobs, and start recruiting to fill their ranks with the best, most talented people they can find. Managers need to learn how to meet and mingle with the best talent in their professional communities, and design jobs around them to produce value and profit. What a concept: Start with the people. It might even require some management effort. (In "Create Your Next Job," I discuss what people can do to present themselves as the talent that makes an employer want to create a job just for them.)
Imagine if a company's recruiters stopped trolling the job boards for resumes whose keywords fit job descriptions. Imagine if those companies instead sent their managers out to find the very best talent in their industries -- and actually recruited those people. (Ever hear a company's chairman of the board announce to stockholders, "People are our most important asset!"? That might be true, except in the execution -- because companies behave as if jobs, not people, are profit-producing assets.)
Today, businesses invest billions of dollars to translate complex business needs into strings of keywords to be processed by database algorithms. Job listings and resumes are bought, sold, rented and traded in a bizarre struggle to avoid actual interaction between companies and the capable people they need to hire.
Should companies really hire people without having a specific job to match them to? Why not? True talent can ride a fast learning curve without falling off. (See "Resume Blasphemy.") Invest in improved training, give people a bit of time and pay them well, and they will amaze you. Smart, motivated people will figure out how to do profitable work -- not a narrowly defined job -- just like a skilled entrepreneur knows how to create a great new product without anyone handing over a blueprint. And that talent will probably do the "out-of-the-box" thinking that HR claims it values.
Employers make "Ten Stupid Hiring Mistakes" that isolate them from healthy, personal recruiting. They recruit for a single position by thoughtlessly casting a net into an ocean of millions of job hunters. Godin tells us that model no longer works in marketing. But nor does it work when hiring.
If you're a manager: Does your company invest more in automated recruiting than in meeting and building relationships with lots of smart people? Is your company building and capitalizing on the best people assets -- or is it trying to find pegs that fit empty holes?
Rather than acquiring and deploying their most valuable asset -- talented people -- to work out the profit equation, employers are dumpster diving in job-board databases, snarfing up meaningless keywords. Then they quiz applicants, whom they don't know from Adam, with silly interview questions. Google's Laszlo Bock has sounded a warning about these candidate assessment methods: They don't predict anything. But the employment system suffers from far bigger structural failings than "Why are manhole covers round?"
It's time to turn the employment system upside down and to focus on hiring smart people who can think, learn and work profitably -- and to let them loose. How much worse could they do than the employers who can't pick the right-shaped pegs?
Nick Corcodilos invites Making Sense readers to subscribe to his free weekly Ask The Headhunter© Newsletter. His in-depth "how to" PDF books are available on his website: "How to Work With Headhunters...and how to make headhunters work for you," "How Can I Change Careers?", "Keep Your Salary Under Wraps" and "Fearless Job Hunting."
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This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.