How millions of people are being shut out of the job market by recruitment software

A Harvard Business School report suggests that automatic resume-reading software is a factor in the US job market's flawed recruitment system. Such programs can erroneously reject millions of viable candidates, contributing to a phenomenon known as "hidden workers."

A vicious cycle is how you might describe the over-reliance of American companies on automated recruitment software.

This technology was intended to help companies find the best possible candidates for vacant positions, but it has ultimately led to an overabundance of applications that are rejected without any real reason.

This is often caused by the filters companies use in this software.

The Harvard Business School report suggests that automated recruitment software is a contributing factor to the US's "broken" hiring system.

These programs are widely used in the US, among about 75% of American employers. This figure rises to 99% for Fortune 500 companies.

However, millions of viable candidates are reportedly being rejected each year, the study's authors say, due to the use of overly simplistic criteria to sort suitable candidates from supposedly unsuitable applicants.

Overly strict filters

One example involves using criteria such as work history.

Some systems automatically reject candidates who have gaps of more than six months on their resume, without ever seeking the cause of that gap.

Joseph Fuller, one of the study authors, gave some further examples to the Wall Street Journal.

An American hospital was, he says, refusing all candidates who did not have computer programming experience on their CV when recruiting workers to enter patient data into a computer.

Here, computer programming experience is clearly unnecessary, yet it caused dozens if not hundreds of resumes to be rejected.

Similarly, recruitment for a retail sales position routinely turned down applicants who did not list "floor buffing" as a skill, even if they met all the other criteria for the job.

This likely contributes to the problem of "hidden workers" the people who are able and willing to work, but who are prevented from finding a job by underlying problems in the labor market.

Because of the increased demand for employment, and increased numbers of applicants, some companies have responded by imposing sometimes too strict filters in the automatic software.

Reassuringly, companies seem to be aware of this issue.

About nine in 10 executives surveyed in the report said they recognized that automated software mistakenly screens out potentially employable candidates.

But to get around the problem, other approaches should be explored when hiring candidates.

Indeed, in conclusion to their study, the authors state that "many aspects of the hiring system" should be reviewed, including how such software and its filters are used.