In 2020 the word “lockdown” became both a common term and a new reality for companies and their employees. Although the global vaccination effort allows people to get back to normality, one effect of the pandemic threatens to remain a significant bottleneck for countries, communities, and companies: unemployment.
The global pandemic led to a near unprecedented level of unemployment. In April 2020, the unemployment rate increased to 14.7 percent, the highest unemployment rate in the U.S. since 1948.
Various sectors of the economy are opening up, and the unemployment rate has dropped to 6 percent in March 2021. Despite these seemingly optimistic numbers, as of March 2021, more than 4.2 million people have been jobless for more than 27 weeks. This represents about 43.4 percent of the unemployed individuals, as well as a significant societal problem.
The most significant barrier writers face when re-entering the workforce is stigma: the long-term unemployed are judged based on their employment gap rather than their skills.
Fortunately, companies willing to move past that stigma will realize that unemployed workers are among the best talent pools out there. Here’s why.
Benefits of Hiring Unemployed Workers
Access to Qualified Candidates
One of the common misconceptions about unemployed individuals is that their skill set is outdated. Nothing could be further from the truth. Studies comparing the skill sets for many workers who had jobs and those who had been unemployed for five years showed no difference in their performance.
Hiring Unemployed Workers Reduces Recruitment Costs
Numerous government-sponsored and community-based organizations act as recruiting intermediaries and connect job seekers, including the unemployed, to employers. The combination of access to diverse talent that has completed reskilling and upskilling, and screening services can create a steady pipeline of qualified candidates, allowing organizations to eliminate recruiting overhead and shorten time to hire.
Hiring Unemployed Workers leads to Higher Retention
With skills and performance being equal, it quickly becomes apparent that hiring unemployed workers delivers benefits on many fronts, including retention. As it turns out, several studies found that hiring long-term unemployed employees lead to longer average retention than other forms of hiring.
DE&I Hiring and Long-Term Unemployment
Diversity plays a crucial role in the financial well-being of organizations. Numerous studies have shown an increase in revenue, cash flow, and profitability levels with diverse organizations. They tend to be more innovative and capture market share faster than others. In addition to performance, diversity also plays a critical role in your workforce’s engagement. It is a crucial issue for job applicants, of which 67 percent will use diversity as a deciding factor when considering your job offer.
The most recent U.S. Bureau of Labor Statistics census highlights how much the pandemic and systemic bias have affected diverse talent. Employers with a strong commitment to diversity hiring could reap both the organization’s benefits of hiring unemployed workers, as well as tax incentives such as the Work Opportunity Tax Credit.
If you’re ready to move past the employment gap and find the most qualified talent for your organization, Censia can help you quickly identify the critical skills you need, as well as the people that have them.
