According to a new Harvard Business School report, automated resume-scanning software is contributing to a “broken” hiring system in the United States. Employers use such software to screen job applicants, but the study’s authors claim that it incorrectly rejects millions of qualified candidates. It contributes to the problem of “hidden workers,” or people who are able and willing to work but are unable to do so due to labor-market structural issues.
The study’s authors identify a number of barriers to employment, but automated hiring software is one of the most significant. These programs, which are used by 75 percent of US employers (and 99 percent of Fortune 500 companies), were developed in response to an increase in digital job applications beginning in the 1990s. Technology has made it easier for people to apply for jobs, but it has also made it easier for companies to turn them down.
Automated Software Is Based On Overly Simple Criteria
The precise mechanics of how automated software incorrectly rejects candidates vary, but they all stem from the use of overly simplistic criteria to differentiate between “good” and “bad” applicants.
Some systems, for example, automatically reject candidates with gaps in their employment history of more than six months, without ever questioning the reason for this absence. It could be because of a pregnancy, because they were caring for a sick family member, or simply because it was difficult to find work during a recession. In an interview with The Wall Street Journal, one of the study’s authors, Joseph Miller, cited hospitals that only accepted candidates with experience in “computer programming” on their CVs, when all they needed were workers to enter patient data into a computer. Or, consider a company that rejected applicants for a retail clerk position if they did not list “floor-buffing” as one of their skills, even if their resumes met all other requirements.
In the hiring world, an over-reliance on software appears to have created a vicious cycle. Digital technology was supposed to make it easier for businesses to find qualified job candidates, but it has instead contributed to an overabundance of applicants. According to the study, the average corporate job posting drew 120 applicants in the early 2010s, but by the end of the decade, this figure had risen to 250 applicants per job. Companies have responded to this deluge by implementing brutally strict filters in their automated filtering software. This has resulted in the rejection of viable candidates, adding to the large pool of job seekers.
The use of this software has grown into a multibillion-dollar industry in its own right. “In the intervening years, automation has come to pervade almost every step in the recruiting process: applicant tracking systems, candidate relationship management, scheduling, background checks, sourcing candidates, and assessments,” according to the report. By 2017, the global recruitment technology market had grown to $1.75 billion, and it is expected to nearly double to $3.1 billion by 2025.”
Despite this, businesses appear to be well aware of the issues. Almost nine out of ten executives polled for the report said they were aware that automated software was mistakenly filtering out viable candidates, and some said they were looking into alternative ways to hire candidates. However, as the study’s authors point out, resolving these issues will necessitate “overhauling many aspects of the hiring system,” from where companies look for candidates in the first place to how they deploy software in the process.