This Op-Ed originally appeared in Journal News.
Much has been written lately decrying a worker shortage in the United States. Is there truly a worker shortage or is there an outage in terms of how businesses are sourcing good talent? I would argue that the business community has an outage challenge that argues for a new approach to employment and the future of work in general. Let’s consider the facts and possible solutions to this issue.
1. Outage on job requirements. We learned in late May that job openings hit 8.1 million at the end of March, which was the highest monthly total since the Department of Labor’s JOLT report first debuted in 2000. There is definitely a disconnect between employment availability and an unemployment rate that is still above pre-pandemic levels; generous unemployment compensation payments have certainly contributed to the unnecessarily high rate, and many states are reconsidering extending those payments much further, which will certainly incentivize many workers to reenter the workforce. Until then, some businesses have gone so far as to increase wages and/or provide signing and referral bonuses to attract workers. Where are businesses looking to get their talent and perhaps are they unintentionally — or intentionally — excluding good talent because of certain job requirements or other barriers that have nothing to do with the applicants’ ability to actually do the job? Here is the travesty in all of this: According to a U.S. Chamber of Commerce survey, 90% of local and state chambers are saying that this so-called worker shortage is inhibiting their local economies. In sum, money is being left on the table because of this outage in sourcing good talent.
2. Outage on sourcing talent. We need to also investigate why we have a labor force participation rate of 61.7% — a rate not seen since the Jimmy Carter years, in the late 1970s, according to the St. Louis Fed. Why are so many people dropping out of the labor force? We know from research done by Kevin Corinth, formerly with AEI, that there were 10 million people not employed due to one or more employment barriers, i.e. justice involvement, homelessness, or mental health issues. Have people simply given up on looking for work because the doors to opportunity are seemingly not open to them? Yet, 91% of small businesses are saying that they are struggling to find qualified candidates for open jobs, based on NFIB data.
3. Outage on innovative and inclusive hiring practices. Businesses are still trying to find their role and voice in the whole race, equity and inclusion discourse. Thankfully, business groups like the Business Roundtable are addressing racial disparities in economic opportunity with 80 member companies committing to a multi-year effort to reform their hiring and talent-management strategies. Yet, innovative strategies already exist and there are companies paving the way for others who choose to take notice. This leads us to the solution for addressing job openings, a historically low labor participation rate, and dealing with race, equity and inclusion.
Since 1982, Greyston has operated an effective hiring model to not only bring once excluded populations into the workforce, but we have in effect transformed the lives and families of those we employ. Our employment model is called Open Hiring®, which essentially means hiring the next person through the door, using what we call a job list. Job seekers need only to add their names to our list, so that when the next job becomes available, they get it — no questions asked, no resume review, no interview or background check. It is inclusive hiring in its purest form, and it works. These employees enable our team to provide nearly 50,000 pounds of brownies every day for customers like Ben & Jerry’s, Unilever, and Whole Foods. We are proud to partner with other courageous and values-based companies like The Body Shop, Giant Eagle and Rhino Foods to implement Open Hiring or some form of inclusive hiring into their organizations.
The results speak for themselves. The Body Shop, for example, cut its turnover rate at its Raleigh, North Carolina, distribution center by nearly two-thirds and saw their productivity increase by 13%. Keep in mind nearly half of the inclusive hiring employees reported having at least one barrier to employment with nearly a third saying that had some form of justice involvement. On average, our inclusive hiring adopters have cut their time to hire from 30 days on average to about 7 days, while having a cost of about $290 per hire, versus $4,100 for the average company.
More than 1,000 opportunities have been created through our inclusive hiring partners, but we need more businesses to step up and access the talent that is on the sidelines waiting to be employed. If only employers would say “yes” to them when others have said “no.”
Inclusive hiring is the answer to historically high job openings. It is the answer to increasing the labor participation rate and it is the answer to taking a truly unbiased approach to hiring and diversifying the workforce. We are on the cusp of seeing the next evolution in human resources — if businesses are willing to meet the challenge and address this outage for looking for good talent. Greyston has the solution and it is called Open Hiring.