Monday, February 3, 2014

PBS's "Ask the Headhunter" Blasts Applicant Tracking Systems

Seth Mason Charleston SC blog 8I recently wrote an article critical of American companies' tendencies to use applicant tracking systems to seek keywords rather than allowing candidates to demonstrate potential added value to their bottom lines. I noted that the current hiring paradigm suffers a failure rate of up to 50%.

Today, ambitious job seekers have scant opportunities to walk into a company and make a pitch directly to a hiring manager. The personable aspect of hiring has been replaced with buggy software programs and cookie cutter online psychological exams that stigmatize creativity and innovative thinking.

Clearly, the American hiring paradigm is broken. PBS's "Ask the Headhunter" Nick Corcodilos has been quite outspoken on the subject. Here's one of his most thoughtful articles:
Last week, I published the 500th edition of my weekly Ask The Headhunter Newsletter, which I started in 2002. (Check the footer of this column if you'd like to subscribe. It's free.) Why does the newsletter keep going? Because America's employment system still doesn't work, and employers are clueless about why.
The emperor still has no clothes, and that's a big part of why over 25 million Americans are unemployed or under-employed. (According to the Business Desk, that's how many Americans say they want but can't find a full-time job.) Meanwhile, according to the U.S. Department of Labor, 3.9 million jobs were vacant in September.
HR executives have a special term for this 6:1 market advantage when they're trying to fill jobs today: They call it a "talent shortage."

Gimme a break.

Human resources executives run around in their corporate offices with their eyes closed, throwing billions of dollars at applicant tracking systems (ATSes) and job boards like Taleo, and LinkedIn, and they pretend no one can see they are dancing in circles buck naked. HR keeps talking about a talent shortage, but the only talent shortage is in the HR offices. HR executives need to learn how to match up the 3.9 million vacancies with some of the 25 million under-employed.
What's going on?
The economy is certainly one factor, but businesses, the media and the federal government continue to ignore the structural problems in our employment system. I'll tell you what I think the main problems are.

Companies Don't Hire Anymore

Employers don't do their own hiring, and that's the number one problem. They outsource their competitive edge (recruiting and hiring) to third parties like Taleo, Kenexa, LinkedIn, and CareerBuilder. Monster and LinkedIn alone sucked almost $2 billion out of the employment system in 2012. These vendors offer little more than trivial technologies and cheap string-search routines masquerading as "algorithms" for finding "hidden talent" and "matching people to jobs."

HR executives are spending billions on those systems, so why are almost 4 million jobs vacant? Because these vendors sell databases -- not recruiting, not headhunting, not jobs, not hires and not matchmaking.

Somewhere, right now, the chairman of the board of some corporation is pounding the podium at a shareholders' meeting, exclaiming, "People are our most important asset!"

Meanwhile, HR executives are funding programs that mingle their companies' most important assets in databases shared with all their competitors via a handful of applicant tracking systems that can't get the job done.

Heads-up to boards of directors: Where is your competitive edge? Take control of your hiring again, like it matters!

Employers Don't Know How to Recruit

Here's how human resources departments across America "recruit." They put impossible mixes of keywords about jobs into a computer. They press a button and pay billions of dollars for a chance that Prince Charming will materialize on their computer displays. When the prince fails to appear, they double their bets and keep gambling. (Last year, companies polled said just 1.3 percent of their hires came from and 1.2 percent from CareerBuilder. See "Is LinkedIn Cheating Employers and Job Seekers Alike?")

Meanwhile, in the real world, over 25 million people, many of them immensely talented and capable of quickly learning how to do new jobs, are ready to work.

Employers need to get away from their desks, remove the ATS straps from around their necks, and go outside to actually find, meet, recruit, cajole, seduce and convince good workers to come work for them.
The Employment System Vendors Are Lying

The big job boards and the ATSes tell employers that sophisticated database technology will find the perfect hire.
  • "Don't settle for teaching a good worker anything about doing a job. Hire only the perfect fit!"
  • "We make that possible when you use more keywords for a job!"
  • "The database handles it all!"
When matches fail to appear, these vendors blame "the talent shortage" and contend that job seekers lack the specific skills employers need.

Except that's a lie. Job descriptions heavily larded with keywords make it virtually impossible to find acceptable candidates. Wharton researcher Peter Cappelli tells about an employer that got 25,000 applicants for a routine engineering position. The ATS rejected every single one of them. Every day that an impossible job requisition remains unfilled, the employment system vendors make more money while companies keep advertising for the perfect hires.

Millions of jobs are vacant, thanks to the empty promises of algorithms. Ignoring the role of the systems behind this failure is a costly mistake.

If the U.S. Congress wants answers about the jobs crisis, it should launch an investigation into the workings of America's employment system infrastructure, which is effectively controlled by a handful of companies.

Employers Have No Business Plan

Employers claim job applicants lack the requisite skills and talents for today's jobs. But in "Why Good People Can't Get Jobs," Peter Cappelli reports that they are wrong. The quality of the American worker pool has not diminished. Rather, American companies:
  • Don't want to pay market value to hire the right workers.
  • Don't want to train talented workers to do a new job.
  • Are content to keep using ATSes that don't get the job done.
Cappelli points out that employers believe they save money when they leave jobs vacant because their accounting systems track the cost of having workers on the payroll, but they fail to track the cost of leaving work undone. Employers run the numbers, and they seem to come up with junk profitability: Fewer Employees = Lower Costs = Higher Profits.

Employers who believe this are misguided or downright foolish. They should stop regarding workers as a cost, start treating them as investments and ensure that each worker pays off in higher profits.
Employers should get a business plan and make their employment systems accountable.

America Counts Jobs, Not Profitable Work

The federal government tracks the number of people who have jobs and the number of vacant jobs. But tallying jobs to assess the economy is like counting chickens before they hatch. The federal government has no idea which jobs or which work is actually profitable and contributing to a healthy economy.

It's no secret that the weekly employment figures are questionable and misleading. The definitions of jobs and "who is employed" are so manipulated that no one knows what is going on.
It's time to re-think how companies find and pay people to do work that produces profit. A better indicator of economic success would be the measure of how profitable all the work in America actually is -- and how much profit is left behind on the table each month when work is left undone.
People Must Stop Begging for Jobs

It's time for people to stop thinking about jobs, and high time to start thinking about how -- and where -- they can create profit.

For example, if I run a company, I'll hire you to do work -- if it pays off more than what I pay you to do it. Today, few employers know which jobs actually pay off. That's why you need to know how to walk into a manager's office and demonstrate, hands down, how you will contribute profit to the manager's business. That's right: Be smarter than the manager about his own business. Stop begging for jobs. Start offering profit.

If you can't do that, you have no business applying for any job, in any company. In the book "Fearless Job Hunting: The Interview -- Be The Profitable Hire" (available in the Ask The Headhunter Bookstore), I explain it like this:
A good employer wants to see what you can do. If he doesn't ask, help him out and show him. It'll turn your interview into a working meeting where you both roll up your sleeves, and during which the employer can do a direct assessment of your worth to his business. Here's how to say it:
"Please lay out a live problem you'd want me to handle if you hired me. I'll do my best to show you how I'd do the work so it will pay off for both of us."
Think you can generate lots of profit without working for someone else? Then bet your future on your plan, and start your own business.

What Is Going On

Here's the simple truth: Unemployment is made in America by employers who have given up control over their competitive edge -- recruiting and hiring -- to a handful of database jockeys who are funded by HR executives, who in turn have no idea how to recruit or hire themselves.
American ingenuity starts with the individual who has an idea, blossoms with a plan that will produce profit -- for yourself and your boss and your customer -- and results in more money for everybody.
So to be truly competitive, American employers must themselves do the hard work of identifying, attracting, recruiting, hiring and further training workers who can ride a fast learning curve without falling off. Outsourcing these critical tasks dulls a company's competitive edge.
Business leaders, the media and the government must revisit their assumptions that automated employment systems are the answer and that the problem is with American workers. Until the structural problems with these systems are addressed, those 3.9 million vacant jobs point to the harsh truth that American employers are a leading cause of unemployment.
"Unemployment is made in America by employers who have given up control over their competitive edge -- recruiting and hiring -- to a handful of database jockeys who are funded by HR executives, who in turn have no idea how to recruit or hire themselves." I couldn't have said it better myself. The American hiring paradigm is broken indeed.

Seth Mason, Charleston SC


  1. Dammit, I was in a good mood before I read this. Now I'm depressed. Thanks Ecinominoes.

  2. I can't adequately express how gratifying it is to see the frustration I feel so articulately stated in the form of a reply. I cannot begin to quantify the mental anguish I am subjected to every time I apply for a position with a company through their web portal (which seems the only route nowadays), which is then compounded by the (usual) re-direct to yet another site that conducts the little psych eval, and then has you complete the EEOC survey. AARRGGHH!! WHy can't you just let me email my CV, and then call me in for the interview - or better still, allow me to submit my CV in person, and call me later? Yeah, I sure feel the frustration.

    1. I agree that the job hunt process is frustrating. The use of the ATS (Applicant Tracking System) does hinder the old fashioned "face to face" initial interview. Checkout where you can find free and very helpful hints on how to job hunt today.

  3. There definitely is something broken here. The purpose of an HR Department is to hire no one (Think Catbert). I also don't think a group should be making the hiring decisions. HR is for the needed paperwork AFTER someone is hired; I have been quite disgusted at how some HR Managers treat their department as their own little fief. The process was broken before even now though. Some years ago, I made the mistake of reading up on a corporation where I had an interview and arriving on time in a shirt and tie. The person they eventually hired (I found out through the grapevine) arrived for his interview with orange hair, massive amounts of piercings, flood class grungy jeans and worn tennis shoes. (The job was an IT position).....okay...

  4. As a human resources professional who is also job hunting, and has been for a while, I agree the hiring process can be frustrating. But not all recruiters, hiring manager, or hr pros are evil. Some of them are really trying to choose the best fit for their companies from hundreds maybe even thousands of candidates. That being said I can only speak to my own hiring process which is, someone emails me a resume (we use no ATS), I review and decide if I will call. I start with a call to the candidate, scheduled at their leisure. Then from those phone screens we (myself and two key people, I am hiring for developers mostly) decide who to bring in. We conduct one in person interview and that is it. The whole process usually takes one week if that.

  5. The best way to see this is that the job market is just like any other market. The company has needs and the applicant has skills that he is willing to exchange for wages. The goal is to get the best match. I had an interview years ago with an ass of an HR guy who was interviewing for a position after seeing my resume. First, he was late. Then he wasted time blathering about how he knew the local TV weatherman was going to run for Senator. Finally, without really talking with me, he went on to say that he wasn't sure that my resume and skills matched what he was looking for. I asked why he set up the interview then. He said he wanted to look at a number of different people but were going with an in-house employee. I thanked him for his time (although he wasted mine) and left. Another company was looking for a tax analyst for a computer tax software co. They turned down an EA with 12 years experience because she didn't have a CPA. They then hired a CPA who only had 5 years experience. They fired her 6 months later.

  6. Did you read the anecdote from the other article on the subject? A technical project manager with a track record of launching several products was automatically rejected by an ATS, which later recommended that he apply for a food service job!


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