Consider A Temp-To-Hire Strategy To End Long-Term Unemployment

The good news: nationwide unemployment rates continue to fall. In December it dipped below the 7% mark for the first time in over five years!

The bad news: millions of people remain unemployed.

Most experts agree that we’re gradually clawing our way out of the recession. On a national scale, the numbers look terrific. On a smaller scale, however, the skies are still a bit cloudy for many individuals and businesses.

People experiencing long-term employment, for example, are having a hard time finding jobs—especially if they’re looking for positions comparable (in salary, status, responsibilities, etc.) to what they did pre-unemployment. Why? One reason is that some corporate hiring managers prefer candidates with more recent work experience. A number of studies have demonstrated that many employers do discriminate against candidate who have been out ..., giving that factor even more weight than actual experience or expertise.

Over one-third of the unemployed fall in the category of “long-term unemployed” (defined as people out of work for at least twenty-seven weeks). Yet at the same time, companies are complaining that they can’t find qualified people for open positions. When the ranks of the long-term unemployed include millions of people with decades of experience, in-demand skills, advanced degrees, and other strong credentials, it seems that companies are missing a great opportunity here.

The solution to both parties’ woes is clear: companies need to start hiring the long-term unemployed.

In his annual State of the Union address earlier this week, President Obama “pulled CEOs of major companies together to pledge not to discrimina....” Larry Zimpleman, the new chair of the Financial Services Roundtable, intends to sign this pledge and urges other CEOs to follow suit. (And so far, many companies have, including Xerox, Lockheed Martin, and A&T.) As far as he’s concerned, this course of action makes excellent business sense. Individuals get jobs, and companies find the qualified people they desperately need.

The benefits of hiring someone who’s been unemployed long term have been spelled out in detail. I agree with them all, but want to take this opportunity to urge staffing agencies in particular to keep the long-term unemployed in mind when searching for candidates. Not only do many of them have in-demand qualifications and experience, but placing these workers in temporary positions yields benefits all around:

The long-term unemployed get jobs that draw on their experience and skill sets.
Staffing agencies get to meet their clients’ needs by placing qualified people in long-open positions.
Companies get to “try out” employees before offering them permanent employment.

Pursuing this strategy leads to a clear win-win-win situation for all parties. Honestly, I have a difficult time imagining why anyone wouldn’t want to do this. As one analysis points out, “The worst possible outcome for all of us is if the long-term unemployed become unemployable. That would permanently reduce our productive capacity.” That’s an outcome that would truly be disastrous to everyone. It’s easily avoidable, fortunately—but not if companies keep their present course and continue to overlook this valuable pool of potential employees.

Comment by Keith D. Halperin on March 20, 2014 at 3:09pm: Thanks, Mike. I think that a major component of this is that there're still (IMSM) ~ 3 applicants for every open position. We need many millions of decently-paying, well-benefited jobs, and I don't see that happening until the Feds start a massive infrastructure rebuilding/upgrade program for the $1.5T worth off things we need to improve...I won't hold my breath, though....

-kh

Comment by Mike McKerns, SPHR on March 20, 2014 at 5:45pm: Sure. Although it's not the governments responsibility to create them (that's what entrepreneurs are for!), more jobs would certainly be helpful. But we may still have an issue with the long term unemployed not accepting offers for jobs that are a step back from the one they were laid off from 3 years ago. I think staffing agencies have an opportunity to offer their clients a much higher caliber candidate that can grow into a better/more desirable position with the company as they add value and show what they're capable of. It'll take a little more work on both ends but the end result would be a win-win. I know there are certainly some positions where technical skills take precedence over most everything else but for the ones that don't I think this is a big opportunity. Companies should also look to their temp staff for opportunities to fill their skills gap. I wrote a post on this a few months ago...

Comment by Keith D. Halperin on March 20, 2014 at 6:20pm: Thanks, Mike.

"Although it's not the governments responsibility to create them..." I think the government should be the employer of last resort (as it was during the Great Depression) if the private sector can't/won't fill the need, even through monetary/fiscal policy-application. Also, those public works/infrastructure improvements (roads, streets, highways, high-speed rail, bridges, tunnels, seaports, airports, schools, parks, water systems, smart grids, green retrofitting, etc.) benefit EVERYBODY. Even Adam Smith *thought this (public works) was a good thing for governments to do, and if we did it, we'd be like a big-*** Singapore, COMPETITIVE AS **** compared to the rest of the world. Can you suggest an alternative "non-make work" plan that will cause the private sector to quickly create 20M+ good jobs?

" I think staffing agencies have an opportunity to offer their clients a much higher caliber candidate..." I may be misunderstanding something here: ISTM that you're suggesting employers would/should be willing to hire LTU candidates with an agency-fee attached when they aren't prepared to hire many of them now without one?

Keep Blogging,

Keith

* The Wealth of Nations

Book V: On the Revenue of the Sovereign or Commonwealth

Adam Smith