Harvard Business School professor Joseph Fuller presents key findings of the survey used to write “Hidden Workers: Untapped Talent” to members of the Springfield Chamber of Commerce at the Ramada Oasis Convention Center March 3, 2022. (Photo by Rance Burger)

If you are an employer or a hiring manager, and your company’s “Now Hiring” sign is becoming a permanent fixture, you aren’t alone. Businesses across Springfield are hiring at a rapid pace, and frustrations are mounting amongst employers.

Springfield Chamber of Commerce President Matt Morrow shared two comments he and his staff hear “over and over” from employers who are looking to hire people.

“The first is that employers repeatedly describe their sense that we seem to all be chasing the same relative handful of employees from one employer to the next. We hear that a lot from employers,” Morrow said. “The second is a rhetorical question that is asked often in exasperation, and that rhetorical question is, ‘Where are all the people? Where are they? We’re looking for people, we’re trying to hire. Where are these people?’”

Why care?

Employment rates, unemployment rates and job vacancies are among the economic figures often discussed daily in high-pressure boardrooms and low-pressure kitchen tables. A presentation given to key Springfield business leaders shed a different light on the labor market, and it may make you rethink everything you thought you knew about the hiring process in 2022.

At the Springfield Business Development Corporation’s yearly meeting on March 3, Morrow introduced Harvard Business School researcher Joseph Fuller to a roomful of business leaders at the Ramada Oasis Convention Center. Fuller delivered a message to the people in charge of hiring: change the process.

Fuller and Manjari Raman wrote “Hidden Workers: Untapped Talent,” a 72-page piece funded by the Harvard Business School and by information technology giant Accenture.

The paper’s executive summary explains that Fuller and Raman conducted their research with a survey of more than 8,000 hidden workers and more than 2,250 executives across the U.S., the United Kingdom and Germany. 

The term “hidden worker,” Fuller said, does not mean that workers are hiding from employers, their government or someone else. Rather, it means that they are experiencing distress and discouragement with the process of seeking work, and that their regular efforts to find work that they are suited for have failed. Hiring processes focus on the credentials that the hidden worker lacks, and ignore the capabilities and values that they can bring to the employer.

“Our research revealed that long-standing and widespread management practices contribute significantly to constraining the candidates that companies will consider, leading to the creation of a diverse population of aspiring workers who are screened out of consideration — or ‘hidden,'” Fuller and Raman write in the paper’s executive summary.

Hidden workers fell into three subcategories that the researchers defined. The majority, 63 percent, are “missing hours,” which means that they could work full-time, but are stuck in part-time work for one reason or another. Another third, or 33 percent, are missing from the workforce. They are not unemployed for long terms, but are unemployed due to life events, such as health issues, mental health events, problem pregnancies, military involvement or family relocation.

The remaining 4 percent are “missing from work” because of direct issues that sideline them from obtaining full-time employment. These can be health issues like injury or disease, mental health issues like severe depression or rehabilitation for substance abuse, being a caregiver for a spouse or parent, an economic disadvantage that prevents them from being able to work full-time, or they are a military veteran whose skills don’t always transfer directly into the workforce.

The hidden worker problem gained notoriety as the COVID-19 pandemic affected the world’s economy, but Fuller argues that the issues began years or even decades before anyone had even heard the phrase “novel coronavirus.”

Fuller and Raman estimate that there are more than 27 million hidden workers in the United States. 

Who’s affected?

Employers and employees

Economic developers

Potential job seekers

Unemployed, underemployed, marginally employed and discouraged workers

Students

How employers recruit

Part of Fuller’s presentation focused on applicant tracking systems, or ATS, which he describes as “some not very smart artificial intelligence.” Companies use these online tools to encourage job seekers to apply for jobs online, and then allow the applicant tracking system to screen candidates.

Fuller said that 99 percent of Fortune 1000 companies use these automated systems. They have filters and rankers that can automatically disqualify candidates, or place their applications lower in the software-based ranking systems.

“What does it mean when you’re filtered out? No human being has ever seen your resume,” Fuller said.

Some filters can be designed, for example, to disqualify candidates who admit on their application to having felony convictions. Other filters, like continuity of employment filters, are not as obvious. Fuller said that his research found that 50 percent of the employers he and Raman surveyed automatically filter out candidates who have a gap in employment of six months of time or greater.

Continuity of employment filters ignore that qualified candidates may have experienced life events that kept them from working. It can be something as dramatic as a severe illness or a parent dying, or it could result from the spouse of someone in the military uprooting a family and leaving a job to move to another part of the country to live on or near another military base.

Why rely on the filters and miss out on good people? Because human resources workers are usually under their own sets of pressures from their employers. Their success rate is often measured by the amount of time that passes between the moment a job vacancy is posted and the moment it is filled.

“It happens because the whole system is designed to be as productive as possible,” Fuller said. “We get them in here fast and we get them in here cheap.”

The survey showed that the success rate with the artificial intelligence screening programs is about 33 percent, as reported by employers, and yet, the A.I. is still used across industries.

Problems in the process

Fuller said that interstate moves for jobs almost always happen for white-collar jobs. People with “middle-skill jobs” search in the places where they already live. That means Springfield companies are going to attract workers who already live in Greene County or in the surrounding counties.

The other problem with artificial intelligence screening based on online job applications is that employers don’t write a new job description every time they hire someone. Job descriptions, especially for middle-skill jobs, are at least partially copied and pasted from previous job descriptions that have already been used.

Language in job descriptions often disqualifies hidden workers, either by discouraging them from applying at all or by filtering their applications automatically.

“What most people do is they open the job description they’ve got and they start adding things to it,” Fuller said.

Fuller gave an extreme example of how one job posting for an entry-level retail job illustrates a national trend in discouraging applicants at stores.

“In the last four years, the average number of skills sought in a job posting in the United States for entry-level retail associate has changed from 18 to 31 — entry-level retail associate, and 800 unique skills are mentioned in one of the descriptions,” Fuller said. “It’s like you put up a Christmas tree and just keep adding ornaments to it.”

The artificial intelligence doesn’t take the level of pay into consideration when it screens applicants for anywhere from 31 to 800 skills mentioned in the job description.

“We apply these very blunt filters. We support the filters for the kind of questionable data, but we’re really surprised that we didn’t get a lot of good applicants?” Fuller said.

Number crunch

According to the U.S. Bureau of Labor Statistics, there were more than 157 million Americans employed in non-government jobs in January 2022. In the same month, there were about 6.5 million persons classified as unemployed in the United States. The estimated number of unemployed persons in Missouri in January 2022 was 118,052. About 2.89 million Missourians were working in non-farm payroll jobs in January 2022.

Missouri’s seasonally adjusted unemployment rate in January 2022 was 3.9 percent, just below the national rate of 4.0 percent. This rate is called the U-3 rate, and Fuller notes that it only counts unemployed persons who are actively seeking jobs. This rate, he said, is about as useful as the average American looking at the closing total for the Dow Jones Industrial Average on any given day — not very useful to an untrained layperson.

Fuller instead recommends a look at what’s called the U-6 rate, which includes underemployed, marginally employed and persons who have given up looking for work after growing frustrated with their job search. The U-6 rate for Missouri was estimated at 7.5 percent at the end of 2021, according to the U.S. Bureau of Labor Statistics.

The Bureau of Labor Statistics puts the American workforce participation rate at 62.2 percent.

“Twenty-five years ago, our workforce participation rate was 10 points higher than Europe’s; today, it’s two points lower. So for those of you saying, ‘Americans up by their bootstraps, we’re hard-working, they’re all a bunch of socialists,’ well, I’m sorry, people, but they are harder-working socialists than we are as a society in terms of our workforce participation,” Fuller said.

Signs around Springfield

Morrow is watching Springfield’s unemployment rate. He is also watching for ways he can tell businesses looking to expand into Springfield or grow their existing Springfield operations that the workforce will support their growth.

“We have record low unemployment everywhere,” Morrow said. “Truthfully, in Springfield, in this market, we have record low unemployment, and that’s great if you’re looking for work. It is difficult if you’re hiring, and it’s especially difficult if you’re trying to attract new expansion to the area and they need to know how they’re going to find their talent pipeline.”

Morrow said that there are three key sets of data that economic development organizations need to measure when it comes to the workforce.

“The first is population growth, the second is skills training and the third is labor participation,” Morrow said.

The Springfield metropolitan area is the fastest-growing metro in the state of Missouri and is growing at a rate of about twice the national average, according to the Springfield Regional Economic Partnership.

Morrow said that Springfield has an advantage over other areas when it comes to training people and encouraging people to develop job skills that increase their earning potential.

When it comes to workforce participation, the Springfield metropolitan area is below average, suggesting a high probability that hundreds if not thousands of hidden workers are in southwest Missouri.

“Springfield runs about five percentage points below the national average in labor participation. We lag particularly in the 25 to 49-year-old demographic. Now, there are many factors to that. There is no one, single silver bullet, it’s a complex recipe,” Morrow said.

According to the Springfield Regional Economic Partnership, 95 percent of the businesses in the 10-county Springfield metro area have less than 50 employees, which magnifies the importance of good hiring practices.

How to take action

Read the full report, “Hidden Workers, Untapped Talent”

Rance Burger

Rance Burger covers local government for the Daily Citizen. His goal is to help people know more about what projects their government is involved in, and how their tax dollars are being spent. He is a graduate of the University of Missouri-Columbia with 15 years experience in journalism. Reach him at rburger@sgfcitizen.org or by calling 417-837-3669. Twitter: @RanceBurger More by Rance Burger