The most conservative official estimates indicate that 15 million unemployed workers are now chasing 2.5 million jobs openings. A more realistic estimate would show that there are 10 unemployed workers for every open job.
The number of job openings peaked at 4.8 million in June 2007, declined steadily through 2008 and then plummeted in the first half of 2009, according to the Bureau of Labor Statistics. Since May 2008, the number of job openings has declined by 1.5 million, or 36 percent.
The BLS’ estimates of the number of unemployed workers appear extraordinarily conservative, because the agency counts as employed any person who worked for even one hour during the week in which the monthly employment survey is conducted. It counts as unemployed only those who have activity looked for work during the four weeks preceding the survey.
At Accolo Inc., a network-based recruitment process outsourcing firm based in Larkspur, California, president and CEO John Younger sees mounting evidence of mass unemployment in the number of applicants that respond to job postings.
“The average number of applicants across the board, including applicants for executive positions, is more than 200 per job,” he reports. “In the first hour that we looked to fill an executive assistant position, we received 500 applications and shut down the search.”
With the number of applicants soaring, employers have sharply narrowed their sourcing methods. “A lot of companies are afraid to use broad distributions, so they don’t even post jobs and go only to one networking site—for example, the hiring manager’s alumni association,” Younger reports. “We’re seeing this more and more as the unemployment rate goes up.”
In many cases, the network that becomes the sole source for applicants is not racially diverse.
“Companies are being far more selective in their outreach to avoid the volume of résumés,” Younger notes. “Ultimately, the result is often an unintended imbalance in racial diversity. By default, there is increased discrimination.”
The recession is replicating racial disparities documented in earlier downturns. In June, the official unemployment rate hit 14.7 percent for blacks and 12.2 percent for Hispanics, compared with 8.7 percent for whites. Racial disparities in the unemployment rates appear across all levels of educational attainment.
When employers can generate large numbers of applicants from limited outreach or even a single source, the pool of candidates becomes increasingly homogenous.
“If your network is not diverse, then it will not produce diverse candidates,” Younger notes. “The common experience is that networks are not diverse. The hiring manager may not even post the opening on the company’s Web site.”
Reductions in human resources and recruiting staffing exacerbate the situation.
“The worst-case scenario is that there is no recruiter who is looking at issues such as racial diversity in the candidate pool, but only a hiring manager working without a recruiter, or working with a contract recruiter that the hiring manager hates,” Younger says. “Recruiting staffs have been decimated, which leaves the entire recruiting process in the hands of hiring managers, who don’t care about nondiscrimination and don’t have the tools to be nondiscriminatory.”
Because Accolo operates as the end-to-end recruiting function for more than 80 companies, it has a unique perspective on how employers handled recruiting before they outsourced it and how they manage it after outsourcing occurs. Accolo maintains its own network of more than 1.5 million candidates and pursues racial diversity in the candidates it presents to clients.
For all applicants who were hired into positions filled by Accolo from January through May, 12 percent were sourced from Accolo’s career network; 24 percent came in through the employer’s outreach efforts, including employee referral programs and the company’s Web site; and 46 percent came in through job boards.
The job boards Accolo tapped included broad sites such as Monster, Yahoo HotJobs, CareerBuilder and Craigslist, plus more than 70 boards that target minority candidates, older candidates and women. But even this distribution did not generate a racially diverse pool.
Accolo maintains detailed equal employment opportunity data for every job. For a vice president of sales position in Northern California, 239 candidates applied, but only three were black and nine were Hispanic. Accolo presented 85 candidates, including three Hispanics. The company interviewed eight, including one Hispanic, and hired a white candidate.
For a systems engineer position in Phoenix, a city where 34 percent of the population is Hispanic, 141 candidates applied, but only nine identified themselves as Hispanic. Accolo presented 16 candidates, including two Hispanics. The company interviewed two candidates who did not report their ethnicity and hired one.
For a customer service position in Chicago, where 37 percent of the population is black and 26 percent is Hispanic, Accolo received 276 applications, but only 16 from black candidates and four from Hispanic candidates. It presented 151 candidates, including five black candidates and two Hispanic candidates. The company interviewed three candidates—all white—and hired two.
For these three positions, 656 candidates applied, but only 25 were black and 22 were Hispanic, and no self-identified minority candidates were hired.
“This was the response even with aggressive diversity outreach,” Younger notes. “The diversity of the candidate pool will likely only go down from here as most companies keep their jobs a secret with very narrow outreach.”
Even with a pool of 15 million to 25 million unemployed or underemployed workers to source from, many recruiters are still focused on passive candidates at competitor firms. Younger notes the limitations of this approach.
“The concept of passive candidates is fiction,” he says. “We’re all temporaries. In normal times, if a candidate has been out of work for six months, there might be an assumption that something is wrong with the candidate. Today, there are world-class experts in every function who are not working, but there is still a preference for employed candidates.”
Younger reports that some employers are vehemently opposed to hiring anyone who is unemployed, while others focus on finding the best candidate for the job regardless of the candidate’s employment status.
The inevitable legal fallout from reduced sourcing has yet to materialize.
“In some cases, it takes two years from the ‘bad act’ to generate a lawsuit,” says Jennifer Sandberg, partner and employment law specialist at Fisher & Phillips in Atlanta. “A disappointed job seeker has 180 to 300 days to file a charge with the Equal Employment Opportunity Commission; then the EEOC takes four months to one year to review it. This time lag means that many discrimination lawsuits have not yet appeared.”