The labor participation rate continues to fall despite the drop in unemployment. This can be confusing since both should not be true at the same time. The reason is the measure of unemployment reported by the government and media is U3 which does not measure labor participation. Under U3, once a person stops looking for work, they no longer count. The rough proxy under this measure is folks receiving unemployment benefits.
The long-term unemployed have always struggled to find work (ask any professional career woman who took 7 years out of the work force to raise a child). But things are even tougher in the 4th year of recovery from the Great Recession. Been out of work for more than 26 weeks? You probably have better odds winning on a scratch off lottery ticket than getting a job; 2 years unemployed? Forget about it. Why?
Peter Capelli, professor of management at the Wharton School, argues the HR is largely to blame and presents his reasons in an article for Harvard Business Review. His research determined the following:
- Only a very small percentage of applicants (4.5%) with relevant skills and training were called for interviews if they indicated if they were unemployed
- The percentage was slightly higher if the applicant was only recently unemployed
- The percentage was far lower if the applicant was unemployed for 6 months or longer
- Applicants with NO relevant experience BUT currently employed were strongly favored over those with relevant experience and unemployed for 6 months or longer
Professor Capelli concludes a faulty HR process coupled with natural and visceral biases against the long-term unemployed (“damaged goods”) are preventing them from re-entering the workforce and resuming productive lives.
I don’t dispute the findings of the professor’s research but have a different opinion as to causes. Far too little weight is given to some of most critical elements of worker success, which most HR Pros know all too well.
Most all work today is a function of time and space. An employee must be at a certain place, at a certain time, to perform similar work on a very reliable and consistent basis. The employee then builds in certain disciplines and rituals to meet this demand (up at a certain time, departure at certain time, transportation worked out, etc.). An intricate and personal web of co-dependent arrangements grow and revolve around these basic demands. Successful habits eventually form. Indeed, I have never seen a highly successful worker, manager or executive that did not a have a discrete and reliable set of habits that supported their work.
Pull work out of the equation and the driving force for the processes, rituals and habits of work rapidly collapse. Only the most strongly disciplined manage to hold on, but even they begin to crack by the 6th month of unemployment.
This is why I encourage the unemployed to do something, ANYTHING other than sit at home perusing the Web for job opportunities. Volunteer for a project at church, help a not-for-profit, volunteer for a Chamber of Commerce effort. These efforts will 1) help prevent habit erosion; 2) eliminate any “holes” in your resume; and; 3) provide networking opportunities that have far better likelihood of creating a job opportunity than a response to a want ad ever will. I do not recommend the long-term unemployed rely on a process change that is highly unlikely to develop.