The Last Word Ignoring the Jobless

Sometimes, you get unvarnished truths from unexpected places.

That’s how I felt last month when I heard former General Electric CEO Jack Welch speak at the Society for Human Resource Management annual conference in New Orleans. Now, I have heard Welch speak many times before, but never, ever have I heard this man, who is the epitome of the Fortune 500 corporate executive, admit surprise at the fact that “people [today] just don’t trust corporate America.”

You know things are really bad when someone like Welch, wrapped as he is in a cocoon of wealth and privilege, sees clearly that America’s workforce is fed up with how they are being treated by our business community.

Yes, we are in the worst economic downturn since the Great Depression. And yes, businesses need to do whatever they can to hang on and survive. I get all that. What I don’t get is this: Why is corporate America so cavalier when it comes to dealing with today’s workers? Why are so many organizations so stupid and shortsighted in their people practices?

Here’s what I am talking about, courtesy of a story last month in The Wall Street Journal: “With unemployment at 9.4 percent and rising, it’s a buyer’s market for employers that are hiring. But many employers are bypassing the jobless to target those still working, reasoning that these survivors are the top performers.”

It’s true: Many organizations have decided to ignore the gigantic pool of unemployed looking for a job and, instead, continue to try to fill positions by luring those who are still working away from their current employers.

The thinking is that you always want the best talent to fill a position, and those who are still working are probably pretty good if they have managed to hold on to their job. OK, I get that notion. But it also brings with it an undercurrent that there can’t possibly be anyone who is any good who is currently unemployed.

Not only is this notion shortsighted, but it is just flat-out wrong. Now, with the national jobless rate at 9.5 percent, nearly 6.9 million collecting unemployment benefits and nearly a half-million more people put out of work in June alone, who in their right mind can think that there aren’t people worth hiring in those numbers?

“The bias [against hiring the unemployed] extends from front-line workers to senior managers,” the Journal story noted. “Charlie Wilgus, managing partner of executive search for Lucas Group, based in Atlanta, says a manufacturing client looking for a division president recently refused to consider a former divisional president at Newell Rubbermaid Inc. whose department had been eliminated. The client doesn’t want candidates who have been laid off, Wilgus says.”

In other words, you are damaged goods if you were unfortunate enough to get laid off. Of course, this fails to recognize that corporate America has made wholesale layoffs an art form and has lopped off workers without regard to talent, skill or their contribution to the bottom line.

The search for the great “passive” job candidate has almost become a sacred mission for recruiting and staffing professionals over the past few years. But why continue that now? Not only is it costly to try to lure away people who are working in good jobs, but it also fails to recognize that most people who are entrenched in good jobs are not particularly likely to give those up in the midst of the greatest economic downturn since the Great Depression. Who would possibly want to leave a solid job they have been in for a while to take a new, unknown position where they would be low on the totem pole? And do you really want someone who is willing to toss a good job for the shaky uncertainty of a new one?

Recruiting passive candidates while so many talented and highly productive workers are on the street looking for new employment is a shameful practice—bad for both the unemployed and for employers looking to hire. The recruiting “gurus” who continue to mindlessly advocate passive recruiting to clients in this labor environment are no better than the carnival barkers who lure you to pay for games where you have no chance of winning.

Jack Welch is right. People don’t trust corporate America. Passive recruiting in the face of massive unemployment is just one more good reason why.

Workforce Management, July 20, 2009, p. 34 — Subscribe Now!