Sep 9, 2021 - Economy & Business

Tech's double-edged sword in the job market

Illustration of a crowd of workers marching towards a glowing briefcase.
Illustration: Aïda Amer/Axios

Technology that automates recruiting and hiring can be partly to blame for the current labor shortage, according to a new Harvard Business School and Accenture study.

Driving the news: More than 90% of employers in the U.S., U.K, and Germany surveyed said that they use automated systems to filter or rank candidates first. Those systems often eliminate candidates that could be a good fit for jobs with training, but whose resumes don’t precisely match the pre-set criteria.

Why it matters: Some prospective employees that companies desperately need are being excluded before they even get a chance to be considered.

State of play: Automation came about during the 1980s and ’90s to expand labor pools, leading to “a deluge of applicants” that has reached an average of 250 applicants per corporate job posting.

  • As a result, companies have relied on more automated systems to help filter through all the submissions.

Yes, but: “[M]ost companies’ hiring systems yield results as if they were designed to prevent hidden workers’ applications from advancing," the study’s authors conclude.

  • Instead, those systems facilitate the traditional "checks-all-boxes" hires, they said.
  • The vast majority (88%) of survey respondents said that they believe qualified candidates for high-skilled jobs are eliminated because those applying don’t match job descriptions exactly, while close to all (94%) said qualified middle-skill workers get eliminated.

The big picture: When pools of applicants grow with fewer of them moving on, it reinforces an employer’s perception that there are not enough qualified applicants — leading companies to rely on these technologies even more.

  • “The cycle builds on itself,” the authors write.
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