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July 16th, 2021 by Nathan Hobbs

The Human Touch: While AI might work in other areas, hiring remains complicated

By Michael Collins

A friend of mine takes pride in declaring that over years of selecting and hiring people, he never brought in a Harvard graduate. Why? They often showed plenty of intelligence, he says, but they lacked the street smarts and hunger that was required for the jobs he was filling.

This colleague’s blanket bias against people schooled in Cambridge, Mass., is just one more example of an outdated hiring philosophy that persists to this day. Past hiring discrimination based on creed or color has been replaced by a sort of technological discrimination through the rise of automated systems that seek out candidates, as well as promote or reject resumes, based on key words and other characteristics.

“Businesses have never done as much hiring as they do today,” Peter Capelli says at the opening of his article in the May-June edition of Harvard Business Review. “They’ve never spent as much money doing it. And they’ve never done a worse job of it,” he adds.

Capelli, director of the Center for Human Resources at the Wharton School, blames part of this condition on recruitment process outsourcing (RPO), where an employer goes beyond hiring staffing companies or search providers by farming out all or part of its recruitment processes to an external operation. These RPO firms search through social media sites to spot people who already have jobs in which they are using desired skills, then contacts and pushes them to apply for a job at the client’s firm at a certain salary.

Meanwhile, research into RPOs by Korn Ferry’s Futurestep and HRO Today magazine found that, in a survey of human resource officers, only 41% were satisfied with how RPO services aligned with their business objectives.

Capelli also sees trouble at firms that have retained a firsthand role in recruitment, by increasingly using tech-enabled tools claiming the ability to sift through resumes automatically. While these services can sort candidates based on arbitrary rules—like five years’ minimum job experience or possession of a commercial driver’s license—they don’t do well on the intangibles, such as creativity and willingness to learn. As a result, your search has to be general, and the funnel widens to a flood.

If outsourcing and tech fumble, what should you do? Capelli and others suggest considering the following:

Promote from within. This used to be common in most industries, but the practice has waned in popularity for several reasons. Chief among them is how the Great Recession forced companies to lay off a generation of workers who could have been the next managers and executives. Continued lean operations have also cut rungs out of corporate ladders, while training budgets have been slashed.

Upgrade your corporate culture. Do your workers sense they have a long-term future at your company? Are they able to see all internal job openings? Do you give staff as much authority as possible? Do you provide training so workers can move up?

Widen your search. Leadership in the door and window manufacturing industries is overwhelmingly white and male. A July 30 report by the Pew Research Center noted that the most common age for whites in the U.S. was a surprising 58 years old in 2018. Meanwhile, the most common age for blacks was 27, while for Asians it’s 29, and for Hispanics it’s 11. The arithmetic of the situation suggests that companies embracing diversity will have an easier time hiring workers over the next ten years.

Utilize specialized (and human) recruiters. Targeted outsourcing of recruiting can be effective, particularly when it relies upon old-fashioned human assets, such as deep relationships in an industry. Rather than the blanket use of computerized searches, companies that need help hiring would fare better in hiring an industry focused recruiter who may have relationships with top candidates spanning years.

Michael Collins is an investment banker and a partner in Building Industry Advisors.
He specializes in mergers and acquisitions in the door and window industry.

To view the laid-in version of this article in our digital edition, CLICK HERE.

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