Ask the Headhunter: Are LinkedIn and HR technology suppressing hiring?
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I admit I'm a skeptic if not a cynic. I just don't buy the ballyhoo about how much better the "jobs numbers" are. Whether the numbers we're getting from the Department of Labor are getting spun for political purposes or the data are not reflective of what's really going on, something just doesn't smell right.
And now a new JOLTS report (Job Openings and Labor Turnover Survey) from the Department of Labor has sent a jolt through some jobs watchers.
In "A New Record for Job Openings Deepens Mystery Over Lack of Hiring," the Wall Street Journal reveals a hole in our job market reality. Even though the number of jobs available in July grew to 5.9 million, only 5.2 million people were hired into those jobs.
After citing drops in unemployment numbers, the Wall Street Journal warns that:
What would normally sound like good news — abundant jobs — is tempered by the fact that people simply aren't being hired into the positions at rates like in the past. About 300,000 fewer people are being hired each month compared with the pace reached in February.
Yep — fewer jobs are being filled.
The Wall Street Journal cites the routine suspects: "It could be workers lack the skills for available jobs or that employers have become too picky."
Come on, folks. Let's get out of the weeds and take a look at the huge tree that's landed on job seekers — about 19.5 million who are unemployed, underemployed and looking for new jobs, as well as those who've "fallen off the rolls."
Peter Cappelli of University of Pennsylvania Wharton's School has shown "lack of skills" is a straw man. Workers are no less skilled today than they were 15 years ago, adjusting for technology and other factors. Employers might be picky, but what analysts are missing is the employment infrastructure that dominates and suppresses hiring.
Indeed, LinkedIn and HR technology stand between virtually every open job and all those job seekers. Yet we've seen no analysis about whether or not these are the roadblocks. It's too easy for economists to blame "the workforce," because who dares question HR technology?
Where is the economist assigned by the White House or Congress or the Department of Labor who is doing the hard work of reviewing the employment infrastructure that employers and job seekers rely on? Where are the success statistics? Where is the failure analysis?
I think our employment infrastructure is the single biggest culprit, and I've said why in plenty of columns. (For just one example of where investment in insane HR technology is leading us, see "HR Technology: Who's Bad?")
The HR technology seems to:
- Encourage irresponsible "recruiting" — solicitation of too many people from untargeted pools of candidates.
- Promote automated, reductionist "matching" of candidate keywords to job keywords. The algorithms make it look like HR is recruiting when HR is doing nothing but diddling keyboards. (See "Reductionist Recruiting: A short history of why you can't get hired.")
- Result in rejection of good candidates because the keyword model is woefully inadequate.
- Turn HR into rationalization central. "We're doing our job incredibly well using state of the art technology, so there must be something wrong with the talent," they say. (See "Why HR should get out of the hiring business.")
The JOLTS numbers should be a wake-up call to legislators and employers: You're not addressing what's broken.
Labor Secretary Tom Perez needs to stop blaming "unskilled workers" and start looking hard at America's employment infrastructure, which is controlled by a handful of private companies that profit when jobs don't get filled, not when they do.
Indeed makes no money when a company fills a job — only when employers keep paying to keep looking. LinkedIn's incentive is to convince employers to add more criteria to job postings, to make it harder to match a good hire, to keep looking. Applicant Tracking Systems — software applications that enable the electronic handling of recruitment — earn huge subscription fees from HR departments when HR can't fill jobs.
So do you think any of these vendors design systems that actually fill jobs? That would kill their revenue streams. There's your roadblock.
The tip-off to the problem is this JOLTS report — companies are not hiring. When the Department of Labor tells us, "we just don't know what's going on," all I hear is, "We don't want to look under that big rock…"
Dear Readers: Let's put it to a vote here: What's the real reason fewer open jobs are being filled? What is suppressing hiring?
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Editor's Note: The piece originally stated that 11 million people are looking for jobs. It has been updated to reflect that about 19.5 million are currently looking for work, as calculated by our Solman Scale U-7.