While Covid19 has forced us to reassess our preconceptions in many area of our lives, its dramatic impact on the recruitment market has accelerated a necessary change in attitudes toward the unemployed in the talent pool.
In this week’s blog, we investigate why hiring managers and recruiters have approached this segment of the talent market with caution, the reasons why unemployment has suffered stigma and what changes are happening to drive a shift in perceptions and finally tap this long neglected source of talent.
The Unemployment Stigma
Let’s face it – we’ve been schooled for years to avoid any ‘unemployment gaps’ in our CVs, and recruiters and in-house hiring managers, in turn, have traditionally been sceptical about candidates that are unemployed, or have had long employment gaps in their career histories. The clichéd justifications for this are fairly easy to summarise:
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Skills degradation: The candidate has been ‘out of the market too long’ – it will take them comparatively longer to adjust to a working day again
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Suspicion: There must have been a reason they were fired/made redundant or had to leave a job without another to go to – it is mostly likely that any firm will retain their best staff, even during a restructure – so the better candidates are therefore still employed (passive)
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Employment break: How have the candidates occupied themselves during their unemployed time? This raises questions that just put more red flags between the candidate and the job
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Previous rejection: It is likely that other firms have looked at this candidate and rejected them
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References: They left their employer, and the references haven’t been great, so they’ve not been picked up again by another firm
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Ineffective: The firm the person was wasn’t successful because the staff weren’t good workers
Furthermore, many recruiters do not like to ask probing questions to candidates around time gaps in CVs, knowing they’ll then have to represent the candidate to the client and answer the same questions, on behalf of the candidate, to the hiring manager before the candidate even gets an interview. Many recruiters may have an inherent bias themselves against those that are currently unemployed or are uncomfortable asking for reasons why the individual is currently not working.
However, the fact is there’s rarely any evidence for the above assumptions. They simply are prejudices. Indeed, some prevalent ideas such as a ‘brain drain’ correlating to amount of time someone is ‘out of the market’ is actually nonsense. Otherwise, mothers returning from maternity leave would be coming back to work completely drained of their skills and experience, which is clearly untrue.
Why do people become unemployed?
Naturally, there are a host of valid reasons for this. We’ll list the four top reasons here:
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Restructuring. This is one of the most common reasons people find themselves unemployed without a job to go to for a while. Businesses frequently go through restructures to make them more efficient, sell-off loss making assets, shed duplicate staff after a merger – even the adoption of automation can play a part. In some cases, firms will offer voluntary redundancies first – but if this doesn’t meet the cost-cutting needs of the business, compulsory redundancies will follow. In many cases, the number of jobs in each business unit will be reduced and employees will have to re-interview for their own jobs. And here is one of the dilemmas of these circumstances. Do you put all your efforts into making yourself look invaluable at work, or do you spend some of that time looking for a new job, just in case? Logic suggests you should juggle both, but it is rarely that simple. And so many people find themselves without a job and without a new one lined up either.
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Employer bankruptcy. This is self-explanatory. The firm goes bust and all the staff get laid off. Not much anybody can do here.
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Toxic cultures. Some people find themselves in a situation where the environment at work simply isn’t somewhere they want to be. It could be due to bullying bosses, vindictive colleagues that haven’t been dealt with by the firm, or it could be a shift in the values or ethics of the company. For whatever reason, they no longer fit with the employer or with the people there. Many will stick it out until they have found a new position. But for some, it becomes so difficult they simply must leave, handing in their notice before even starting to look for a new job.
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Changes in circumstances. Another, very common reason people have to leave is a change in personal circumstances. Looking after a sick loved one or having to move countries with a spouse’s job are among the most common examples.
In all the above cases, people leave their employer without a new one to go to and for good reasons. How long they take to find a new job will depend on a whole host of variables, some semi-under their control (such as how much effort they can put into the job search), but most completely out of it (market conditions, requirement for their skills, and sheer luck).
Stigmatisation
Interestingly, a study conducted by UCLA Anderson School of management some years found that if you are between jobs for more than just two or three weeks, you quickly fall into the stigmatised ‘unemployed’ category - making it much harder to find a new job, and the difficulties grow exponentially the longer you are unemployed.
"Here, we see candidates with strong résumés being substantially penalised for something that may not reflect at all on their ability to contribute to the company," said Geoffrey Ho, a co-author of the study.
Peter Norlander, an assistant professor of management at Loyola University Chicago and another co-author of the original UCLA study, also recently added;
“…the stigma against unemployed workers operates like other psychological prejudices and biases, is unjustifiable on productivity grounds, and occurs nearly instantaneously to workers losing their jobs”.
The effects of Covid19 on the job market
First, let’s look at some regional figures within our own markets.
In Malaysia, Socso (Malaysia’s Social Security Organisation) CEO Mohammed Azman Aziz told Free Malaysia Today that the organisation had recorded 89,596 cases of loss of employment as of October 22nd 2020, with an average of nearly 10,000 cases every month. “This represents an increase of 278% compared with 2019,” he said.
Likewise, in Singapore, third quarter estimates from the Ministry of Manpower (MOM) released on October 30th 2020, showed that the overall unemployment rate crept up by 0.2 percentage points from 3.4 per cent in August, which had already surpassed the high recorded during the peak of the global financial crisis, according to Channel News Asia.
Of course, these statistics are being echoed and repeated around the world and this means that recruiters and hiring managers face a new reality – much of the talent pool (in some sectors, most of it) is now unemployed.
As Professor Peter Norlander notes again:
“Today, the first waves of those unemployed due to the coronavirus recession are about to enter long-term unemployment, defined as being unemployed for more than 26 weeks. Almost 800,000 workers first laid off in March entered long-term unemployment in the month of September. As of September, 4.6 percent of the U.S. labor force, or 58 percent of the unemployed—7.3 million workers—are now unemployed for more than 15 weeks.”
These hard facts mean that all those involved in the hiring process are now forced to look into the unemployed talent pool in a very serious way.
The turning point
Earlier this year, a blog post by Monster.ca on ‘Low-risk recruitment strategies’ encouraged hiring managers to turn their focus on the unemployed;
“Why spend a vastly disproportionate amount of budget and effort on targeting employed candidates who aren’t even looking to leave their job? …There’s no evidence that passive candidates become better employees than unemployed job seekers so get over the outdated notion that the jobless are a riskier hire.”
This change in attitudes is now becoming widely reflected across the industry. According to LinkedIn’s Lead Writer for Talent, Bruce Anderson, “The unemployment stigma hurts active candidates — and the companies that bypass them”.
He, in turn, quotes Ed Nathanson, the VP of talent and talent branding at EQRx: “Call me crazy, but what if instead of chasing the same people, we made the pool significantly deeper by giving people who are unemployed a fair shot?”.
A recent LinkedIn survey of 1,000 hiring managers found that 96% would hire a candidate who was laid off due to the COVID-19 pandemic.
Other advantages to hiring the unemployed include:
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Greater eagerness to join the firm and make a good job of their probation
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More time to research the background and structure of the company for interviews
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No notice period – they can start immediately in most cases
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Likely to have either up-skilled or simply taken the time to refresh themselves during unemployment – coming back to work with new vigour
Rather than making these candidates a riskier hire, the above reasons demonstrate why they can, in fact, be a reduced-risk hire.
So, it seems that, finally, the prejudices against the unemployed are finally falling away. Will this be a temporary period, simply a free pass this year due to the pandemic? Unlikely. Industries in general were already starting to realise that they were missing out on prime talent simply by ignoring the unemployed.
This has not only been the year of Covid19. It has also been a year where equality, diversity and discrimination have been issues brought to the very top of the global agenda. And as we reassess how diverse and inclusive we are when it comes to hiring and recruitment, this is likely to have had had at least some impact on the way we view the unemployed.
As Ed Nathanson continues in his LinkedIn article;
“The thing we have failed as an industry to truly recognise is that talent, drive and skills are what truly matters. Every person has their own unique story, and that story is not limited by dates of tenure on a resume”.
What can you do?
If you are facing redundancy or have already lost your job - firstly, don’t assume the stigma is still there and is going to hold you back. Don’t lie about being unemployed. Instead, bring out the highlights from this period – upskilling, contract work, anything that shows you are still active.
Secondly, open yourself up to your network. Put the ‘Open to work’ badge on your LinkedIn profile and reach out to contacts. In fact, you may be surprised how many will reach out to you. You may feel this makes you vulnerable, but we are all realists now in the age of coronavirus. Networking is an essential part of any job search. Likewise, don’t avoid any networking events (be they virtual or socially-distanced - if you feel safe enough) as these will be very strong networking opportunities.
And of course, and perhaps most importantly, reach out to us. We are there to give you sound and honest advice about your CV, your options, and to speak with our clients on your behalf.