Employers, It's Time to Let Go of the Unemployment Stigma
5 December 2017
Those of us in HR don't like to admit it, but companies don't afford the same level of consideration to unemployed candidates or candidates with employment gaps as they do to working applicants. Sometimes, companies even prefer to recruit passive candidates that haven't applied for a job in the hope of attracting them. I guess we just love the thrill of the chase. Shame on us.
What's more, even if we do show unemployed candidates' resumes to hiring managers, how many of us actually try to justify why great candidates find themselves out of a job? Do we argue with decision makers who claim that if the candidate was any good, she or he would already be employed? That stereotype holds no merit at a time when mergers and acquisitions are driving excellent workers to the unemployment line.
In 2010, as part of the American Jobs Act, the federal government exempted employers from paying the 6.2 percent social security tax on wages paid to previously unemployed workers that they hired, and offered a $1,000 tax credit for every employee that they retained for a minimum of one year.
While employers were eligible for this deal, I did the reverse of what employers traditionally do—I actively searched for unemployed candidates. And guess what? None of them were less competent than workers that left their other jobs to come on board.
In fact, evidence for this is more than anecdotal. In its 2014 advocacy guide for employers, Deloitte cited a study that found "virtually no difference between the performance of those who had not held a job within the past five years, and those who had."
The Benefits of Hiring Qualified Unemployed Candidates
Now that the tax break has expired, there are still a number of advantages to hiring qualified unemployed candidates. For one, hiring managers have noted that this cohort had higher rates of retention than those who hadn't experienced the hardship of being out of a job, and Deloitte's guide confirms this. Companies who hire unemployed candidates "experience a more reliable and loyal workforce, as well as higher retention rates," it states.
Lower recruitment costs are another benefit, because employers can source qualified candidates without paying premium recruiter fees when hiring someone who is unemployed. According to Deloitte's guide, hiring unemployed individuals also reduces hiring time by 50 to 70 percent since they're available immediately. And, because these workers are often experienced, there's a 50 to 70 percent reduction in time spent getting them up to speed as well.
But a bias as deeply engrained as the one against unemployed job candidates is difficult to overcome. For example, LinkedIn experts have long advised candidates against stating that they're "actively seeking new opportunities" in their profile headlines because it signals their unemployed status.
Nevertheless, a movement directed at overcoming the anti-unemployment bias is gaining traction. Together with two colleagues, we invented a hashtag, #ONO (Open to New Opportunities), to make it easier for recruiters and hiring managers to source, qualify and hire unemployed candidates whose value proposition might be exactly what your company needs. Look out for it, and take a closer look at unemployed candidates!