PeopleAnswers

The below article from the Wall Street Journal should be of great interest to PeopleAnswers customers and prospective customers. It highlights the pitfalls of hiring in a down economy and the growing cost of sifting through the increased number of applicants in an attempt to find a top performer. PeopleAnswers software addresses these issues and more.

A Flood of Job Applicants Makes Wise Hiring Harder

December 24, 2002
By Carlos Tejada
Staff Reporter of The Wall Street Journal

With 8.5 million Americans looking for work, it should be relatively easy for employers to find the right person for a job.

Not so at 7-Eleven Inc. The Dallas convenience-store chain needs to fill field-management positions and has piles of resumes. But locating applicants with the right skills has proven as tough, if not tougher, than during the boom times, the company says.

Why? People looking for work are being less selective, applying for positions for which they aren't necessarily well-suited. That makes the task of sifting through applicants more difficult. " In good times people use the rifle approach for their job search. When people are skittish, they tend to use the shotgun," says Joe Eulberg, 7-Eleven's vice president of human resources.

With the national unemployment rate at 6%, many companies are finding themselves flooded with candidates who don't fit into job openings. "Our officers are getting inundated," says Dan Kaplan, director of recruiting for Washington, D.C., mortgage giant Fannie Mae, which is looking to fill routine slots. "At times, you're looking at volumes of resumes. It muddies up your thinking. You may settle [for a less-than-ideal candidate] because it's easy to."

Just ask 33-year-old Mark Twombly about the potential for mismatch between an applicant's qualifications and job requirements. Mr. Twombly, who holds both a law degree and an M.B.A., lost his job managing investment portfolios in October when his former employer closed its St. Paul, Minn., operations. He soon found that his resume didn't always land in the right hands. At one financial institution where he applied to the private-banking department, which manages money for wealthy clients, he got a call offering him a job as a bank teller. "I don't want to be the only dual M.B.A./law-degreed teller in the Twin Cities area," says Mr. Twombly.

Mismatches can be costly. Once a company hires someone who isn't right, it may be stuck with an unproductive or unhappy worker. Down the road, it may have to let that worker go, then recruit and train a replacement.

Audra Bowlus, an economist at the University of Western Ontario who has studied U.S. labor data, found that wage growth and job tenure, two common measures of the overall success of a job match, are lower for jobs filled during down times than those filled during booms. One theory to explain the short tenure among the group she studied, young unemployed men, is that desperate people take jobs they once thought beneath them: An accountant, for example, waits tables. But when the economy picks up that accountant goes back to financial statements. Yet if that practice were widespread, job tenure would drop among the lower-paying retail and service-sector jobs. In fact, she found short tenure and low wage growth were greater among professional jobs.

Thus, Ms. Bowlus thinks the real problem is that professionals are hired for the wrong position during recessions and then leave when they find that they are underqualified, overqualified or simply don't fit in with the corporate culture.

There are other reasons for short tenure. Robert Hall, a Stanford University economist who traced the effects of workers seeking durable job matches over two years, suggested that workers often seek interim jobs and that companies cut the most recently hired workers first. Scott Schuh, senior economist with the Federal Reserve Bank of Boston, says workers go through a period of relearning how to find and hold jobs. "It's like when you first enter the job market. It's a related process for displaced workers," he says.

Mr. Kaplan, of Fannie Mae, suggests another factor. Some workers may leave when times improve because they felt they were mistreated. He says he has seen other companies take advantage of desperate job seekers by drawing out searches or insisting on demotions or pay cuts from an applicant's prior position. "If you don't treat people right today, when the market recovers, they're going to go," he says.

One way for companies to avoid the mismatch is to go after the still-employed. The consumer markets division of Countrywide Financial Corp., a Calabasas, Calif., lender, hired 2,000 sales personnel and 1,200 transaction-support personnel this year, says Brian Hale, executive vice president, national production for Countrywide's home-loan operations. But nearly all the sales personnel and many of the support staff were poached from other companies. Mr. Hale says that while the pool of unemployed people grows during down times, it "doesn't swell with superstars."

Many companies have tried to weed out ill-fitting job seekers by electronically sifting through resumes, both those that are submitted via e-mail and paper ones that are scanned into a computer. Only resumes with desired key words, like "MBA" or "sales," would be selected. But many job candidates have figured out the desired words.
Now, companies are trying new software. Fumi Kondo, managing director of consulting firm Intellilink Solutions Inc. in New York, says some software looks for resumes that closely match that of the ideal candidate in their entirety.

Even with the aid of computerized scanning, though, some companies seem to have trouble handling all the applicants -- or at least politely turning down those that don't interest them. David Schoenfeld, a Thornton, Colo., mechanical engineer, owned his own circuitry business for a decade and held a senior engineering position at a big data-storage firm. But he can't get a foot in the door.

" Human-resources people at other companies flatly do not answer their phones. I send my resume and make a follow-up phone call, but I don't get anybody," says the 50-year-old Mr. Schoenfeld. He adds that outside recruiters like his qualifications one week; the next, they can't remember who he is. "Either they're swamped or it's severe brain fade," he says.

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