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Automated hiring software is mistakenly rejecting millions of viable job Candidates

Automated resume-scanning software is contributing to a “broken” hiring system in the US, says a new report from Harvard Business School.

Such software is used by employers to filter job applicants, but is mistakenly rejecting millions of viable candidates, say the study’s authors. It’s contributing to the problem of “hidden workers” — individuals who are able and willing to work, but remain locked out of jobs by structural problems in the labor market.

An Applicant Tracking System (ATS) is a workflow-oriented tool that helps organizations manage and track the pipeline of applicants in each step of the recruiting process.

The study, titled Hidden Workers: Untapped Talent, delves into how leaders can improve hiring practices, close skills gaps, improve diversity and more. The over reliance on resume-scanning software is contributing to the problem of "hidden workers," according to the report.

How does the Tech work?

An automatic screener largely relies on “negative” logic to reduce the size of the applicant pool. Résumés—even those of well-qualified candidates—can get lost in a black hole because of things like a gap in the applicant’s employment history, a lack of certain credentials, or keywords that don’t match up with the job description.

Some of those keywords might not seem obvious. Hospitals set “computer programming” as a keyword when they look for registered nurses who can enter patient data into a computer, Joseph Fuller, Harvard’s lead researcher for the study, explained to the WSJ.

"Our research indicated that employers believe applicants with more recent experience are more likely to have better professional skills. A recruiter will never see that candidate's application, even though it might fill all of the employer's requirements."

The software lets employers indicate requirements like degree requirements, certifications and licenses, along with negative attributes a candidate's application should be without, like criminal charges, for example. It becomes tricky when the negative attributes are more subtle -- like when the software spots long gaps between jobs on a resume, according to the report.

Finding work during the pandemic

  • A significant majority of hidden workers (95%) struggled to find work opportunities during the pandemic. Of these, 54% reported the pandemic made it harder to find work opportunities;

  • However, 41% of workers reported the pandemic made it neither harder nor easier to find work opportunities, demonstrating how significant the barriers to gaining employment are for hidden workers;

  • In a separate question, 60% of hidden workers also reported that they began looking for new opportunities during COVID;

  • The majority of workers in all three countries reported that half or more of the jobs they were qualified for disappeared during the pandemic.

Despite this, companies seem well aware of these problems. Nearly nine out of 10 executives surveyed for the report said they knew automated software was mistakenly filtering out viable candidates, with some saying they were exploring alternate ways to hire candidates.

But, as the study’s authors note, fixing these problems will require “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.

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