5 Questions for Ravin Jesuthasan: Out of Job Site, Out of Mind

To Ravin Jesuthasan, continued high unemployment in America isn’t just about tough times for jobless workers. Jesuthasan, global practice leader for talent management at consulting firm Towers Watson & Co., says it’s also about bias and missed business opportunities.

Workforce Management: Are companies dismissing the unemployed in their hiring decisions?

Ravin Jesuthasan: There’s this belief that there’s all this talent out there given our [9.2 percent] unemployment rate, and that we can get world-class talent for any position. Unfortunately, the best person, in the minds of many organizations means someone who is still employed. There is a belief that anyone who has been laid off, for whatever reason, is not of the caliber of the talent that is still working—which is a real myth.

WM: Why is it a myth?

Jesuthasan: Companies made a number of major decisions about what work to keep within their organizations during the course of this recession. They made decisions like ‘I’m not going to have an in-house accounting function, because I can outsource it to Poland.’ In those instances, jobs were eliminated because whole functions were eliminated. So the caliber or performance of the individual had nothing to do with their job being eliminated. The other reason this is a myth is the belief that most companies have robust and rigorous approaches for differentiating performance and identifying lesser-performing talent. In fact, at many organizations, the process can be highly politicized.

WM: Do companies miss out when they frown on the unemployed?

Jesuthasan: With any inefficiency in a market, there is the potential for arbitrage. At some point, as the economy starts to recover, someone’s going to say, ‘Look! We’re struggling to fill some of these jobs. We’re having to pay a huge premium to get people who are employed at other companies to move. Let’s take a good look at folks who maybe are not employed. Am I going to pay the accountant who’s still employed 40 percent more than the last guy who did the job, because that’s what it’s going to take for him to move? Or am I going to hire an unemployed accountant who is just as capable for, in many cases, less than I was paying the previous guy?’

WM: Is that 40 percent figure realistic?

Jesuthasan: It might be a slight overstatement. But you are starting to see the premium get ratcheted up. Our last global workforce survey, at the end of 2010, pointed to a profound shift toward a focus on security and compensation. In the past, when we asked this survey, people were much more focused on, ‘can I grow, can I advance, can I acquire new skills?’ Unless they are unhappy, employees today are going to demand a premium to move and give up the security of their current positions.

WM: What should companies do with respect to hiring the unemployed?

Jesuthasan: Ensure that they give them an equal opportunity. Get their résumé looked at with the same rigor as someone who is employed. Give them an opportunity to be interviewed.

Workforce Management, August 2011, p. 41 — Subscribe Now!