Are you missing out on a rich source of needed talent?

The case for hiring the long-term unemployed

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Posted by Alice Kwan and Danielle Hawkins on October 16, 2014

There’s a very good chance your organization is turning away viable, high-quality candidates for one reason: They’ve been looking for work longer than other candidates.

As of August 2014, 3 million Americans1 of all ages, ethnicities, geographies, industries, and education and experience levels are considered long-term unemployed (LTU), meaning they have been actively seeking work for more than 27 weeks without success. The LTU apply to 3.5 times more jobs than recently unemployed job seekers, yet receive 45 percent fewer callbacks for interviews.2 Evidence shows no difference in capability or quality of work produced between the LTU and the recently unemployed,3 yet the stigma associated with lengthy employment gaps persists.

In reality, companies that hire the LTU experience higher retention rates and enjoy greater workforce loyalty.4 That alone is a strong business case for hiring the LTU – but the benefits don’t stop there. By tapping into the LTU talent pool, you can…

  • Increase access to qualified talent. Recruiters report that at least half of job hunters don’t possess the basic qualifications for the jobs they are pursuing,5 making it hard to bring the right people on board. At the same time, turnover in some industries can reach 40 percent.6 When losing people is easy and finding replacements is hard, it doesn’t make sense to discard candidates before determining their job fit, simply because of longer employment gaps — particularly when those gaps don’t equate to any deficits in performance. Removing the bias against long-term unemployment opens your organization to a wider pool of talent.
  • Relieve overburdened recruiters. Open positions routinely garner more than 1007 (or even more than 1,0008) responses, placing a heavy burden on recruiters. Tapping into the LTU talent pool via local intermediary groups, such as Workforce Investment Boards and non-profits focused on sourcing these candidates can be a reliable pipeline for qualified, pre-screened candidates while also lowering sourcing costs by saving recruiter time and job board posting fees.
  • Support inclusion efforts.Some 93 percent of Fortune 500 companies say diversity is a key business driver.9 Because nearly 50 percent of the LTU belong to a minority group, hiring the LTU increases the likelihood of realizing benefits such as improved financial performance (the most diverse companies have disproportionately large annual revenue10. Hiring the LTU may also increase capacity for innovation (85 percent of global executives agree that “a diverse and inclusive workforce” supports innovation11), and enhance organizational appeal to younger workers – 30 percent of whom say they value diversity and inclusion when considering employers.12
  • Strengthen the local community. Long-term unemployment damages communities because it limits spending power while people are unemployed, and can lead to a lifetime of lower-paying jobs and consequent earnings losses.13 These effects are multiplied over time because children of the LTU tend to perform worse in school, eventually obtaining lower-paying jobs than they otherwise may have.14 By hiring the LTU, you can not only increase community standards of living and the number of people able to afford your products and services, but also attract customers who actively seek to patronize businesses that support local communities.
  • Contribute to a broader solution.Our national economy is threatened by the harmful effects of long-term unemployment — deteriorating skills, lower labor force participation, and higher structural unemployment. All of these factors damage the overall productive capacity of the economy over the long term and hinder private sector growth.15 By giving the LTU a fair chance, you can both play a role in solving this national issue and build your business brand as a committed, socially responsible employer.

More than 300 leading companies, including 20 members of the Fortune 50, have signed on to the White House’s Best Practices for Recruiting and Hiring the Long-Term Unemployed. These companies have committed to resolving this issue not only because it’s the “right thing to do,” but also because it makes business sense. In support of the White House’s efforts to mitigate long-term unemployment, Deloitte Consulting has collaborated with the Rockefeller Foundation to create three handbooks to move the needle on getting Americans back to work. These unique resources were developed based on over 50 interviews with employers, job seekers, and employment partners across the US and are designed to help job seekers enhance their job search, empower employers with tools to tap into this often overlooked talent pool, and enable communities to work together to mitigate this economic challenge.

The White House also recently announced the winners of the Ready to Work partnership grant competition, awarding some $150 million in grants to support high performing partnerships between employers, non-profit organizations and America’s public workforce system that is designed to help provide long-term unemployed individuals with the range of services, training, and access they need to fill middle and high-skill jobs.

I urge you to join in this nationwide effort to combat long-term unemployment and bring valuable, needed talent back into our workforce. It may be cliché to call hiring the long-term unemployed a “win-win” proposition, but there may be no downside. Please start here to learn more about the initiative and download the handbooks.

Alice Kwan Alice Kwan is a principal in the New York office of Deloitte Consulting LLP and leads clients through large scale transformations with a focus on organizational, cultural, change management and talent implications.
Danielle Hawkins Danielle Hawkins is a senior manager in the Atlanta office of Deloitte Consulting LLP and focuses on developing change management and talent strategies to drive business goals.

2 Kory Kroft, Fabian Lange, Matthew J. Notowidigdo, and Lawrence F. Katz, “Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment,” The Quarterly Journal of Economics, September 2013.
3 Executive Office of the President. “Addressing the Negative Cycle of Long-Term Unemployment.” White House Report. January 2014.
9 Capital H Group/Harris Survey: Diversity in the Workplace is Critical.” September 25, 2009.
10 Tudor, P. “Adding Value with Diversity: What Business Leaders Need to Know.” American Institute for Managing Diversity. 2007
11 Forbes Insights, “Fostering Innovation Through a Diverse Workspace.”
12 Talent Edge 2020: Building the recovery together—What talent expects and how leaders are responding, Deloitte, April 2011
13 Justin Barnette and Amanda Michaud, “Wage Scars from Job Loss,” Working Paper, 2012.
14 Philip Oreopoulos, Marianne Page, and Ann Huff Stevens, “The Intergenerational Effect of Worker Displacement.” Journal of Labor Economics, 2008
15 Executive Office of the President. “Addressing the Negative Cycle of Long-Term Unemployment.” White House Report. January 2014.

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