Fast Company says "Hold the Interview"

Great article in this month's Fast Company mocking what they refer to as the "Official Hiring Process of America", which invariably culminates in the all-important interview. The final seal of approval. The intuitive capturing of that certain je ne sais quoi. The moment when interviewer peers into interviewee's soul and instantly -- as argues Malcolm Gladwell -- assesses work ethic, cultural fit, and latent potential....Or so we like to think.

Decades of research indicates that interviews are not predictive of on-the-job performance. Rather, they tell us how adept candidates are at - well, interviewing. Yet we continue to rely on them as the most critical step of the hiring process, in large part because we in the hiring world like to believe ourselves particularly skilled at it. Psychologist Richard Nisbett calls this the "interview illusion" -- the certainty that we're learning more from an interview than we actually are.

So how to tell if a candidate will stack up on the job? Fast Company recommends peer ratings, job-knowledge tests, even intelligence tests. But the number one indicator? A work sample. Potential salespeople need to make an on-the-spot pitch. Potential admins need to handle some incoming calls and give instant minutes of the meeting you've just had.

And when you're looking at a potential service worker or laborer, WorkSquare recommends inviting them for a working interview and have them actually do the work. Two days on the job and you'll have far more valuable hiring information (and at negligible cost) than eight hours of interviews could ever provide.

Earnings Growth and Job Mobility Among Low-Wage Workers

In The Brookings Institution’s article, “Encouraging Job Advancement Among Low-Wage Workers: A New Approach”, the author demonstrates that earnings growth for low-wage workers is much more likely to come from switching to a different company than it is from staying with an employer and waiting for a wage bump or promotion. If this is the case – and Miami-Dade’s dearth of mid-level jobs suggests that it would be particularly acute here – we would expect savvy low-wage workers to be putting in time at one job while eyeing where they could go next.

For a low-wage worker, even a modest increase in wages can make a significant difference in lifestyle and future prospects. Making $9.00 an hour instead of $8.00 is an effective raise of 12.5% and an additional $2,000 annually – enough to have a car that could get you to a $10.00 an hour job, or to enroll in classes for a marketable skill or certification.

So what’s inhibiting this upward mobility? Several things – all of which WorkSquare is working to change. First, little information exists as to available jobs, how to apply for them, what characteristics the employer requires, et cetera. When employers do post job positions publicly, they are often overwhelmed at the quantity of candidates (qualified and not) that they then have to sort through. I have seen more than a few hiring managers grab the top several applications and dump the rest in the recycling bin for lack of time. Accordingly, the search for a low-wage position becomes more about luck (or a personal referral) than it is about merit.

Secondly, the job search process in the low-wage sector remains costly and time-consuming when it involves juggling a current job, unreliable transportation, and family and other commitments. Scheduling time off for the interview and hiring process may well jeopardize a current position or be financially burdensome in terms of time spent, wages lost, childcare arranged, and transportation.

Third, we’re lacking reliable and standardized metrics for employee performance that would allow employers to target high-performers. Proxies such as job longevity exist, but all the same, it remains a challenge to ascertain whether a low-wage employee excelled or merely got by in prior positions. High turnover in low-wage retail and service settings means that references from supervisors or co-workers are frequently unavailable. Add to this the fact that online job boards – CareerBuilder, Monster, Craigslist, etc. – don’t provide effective ways to screen for available low-wage employees.

Finally, employees’ success in jumping jobs is inhibited by their own inability to market themselves well. Even when they have the experience or characteristics an employer is looking for, they may be screened out of the process due to an imperfect resume or professional appearance, or – most critically – their ability to give a convincing ‘elevator pitch’ to explain why they’re the best candidate for the job. Lack of interview experience can also be an impediment, as the interview setting can be sufficiently intimidating to make job-seekers uncomfortable and unable to put their best foot forward.

In sum, better information on available jobs and candidates is critical to helping both sides make more informed and successful decisions. Reducing turnover through intelligent hiring, along with successful retention strategies once employees are in place, has potential to save South Florida employers significant time and money. This, combined with an effective platform for low-wage workers to promote their employability and enhance their interview performance, would be nothing short of revolutionary. We’re working on it!

Enabling Opportunity for Temporary Workers

The temporary staffing industry likes to market itself to job-seekers as a launchpad to permanent employment. Both traditional operators and Alternative Staffing Organizations (“ASOs”) operate under the assumption that temporary jobs increase an individual’s long-term job market prospects by providing job experience, on-the-job skill training, and an introduction to a potential employer.

Yet statistics on the long-term benefit of temporary employment at the lower end of the wage scale are mixed at best. In an article entitled “Temporary Agency Employment: A Way Out of Poverty?”, David Autor and Susan Houseman demonstrate that temporary employment did not improve the chances of escaping poverty over the long-term for a sample of welfare-to-work participants that they followed.[1] These individuals enjoyed a brief burst of additional income in the short-term, only to find themselves back at square one when their assignment ended.

This scenario is unfortunately all too familiar for low-wage job-seekers at labor companies and temp agencies. Add to this the fact that an estimated 15 to 40 percent of participants in government employment programs for low-income individuals go to work in this sector, even though the temporary help industry represents only 2 to 3 percent of the country’s total employment.[2] As a nation, we’ve managed to channel low-income job-seekers into the temporary sector as a band-aid solution, rather than figuring out how to turn these opportunities into a shot at long-term economic stability.

Why is it that most temporary jobs offer little future? For starters, many low-wage temp jobs are – by nature – only temporary. Laborers on a construction project or housekeepers in a hotel may only be needed until the project wraps up or high season ends. Second, traditional temp agencies impose a number of barriers – fees, minimum hours – that reduce employers’ incentives to hire on their workers. (Note WorkSquare’s “no temp-to-perm or minimum hour policy” – our way of encouraging employers to hire on and for workers to put their best foot forward.) Employers often think it more cost-effective to recruit low-skilled workers directly rather than incur fees, particularly when minimal training is required. Additionally, most temp agencies do not have the ability or the will to allow employer feedback in the selection process, leaving employers to gamble on the quality of employees they receive and reducing the likelihood of a successful match.

So, what can be done? How can we better turn temporary assignments into a path to prosperity for low-wage workers? How can we better ensure that temporary jobs result in permanent positions and long-term financial stability? How can we change the industry to incentivize good performance, reduce barriers to contracting between employers and employees, and allow for open access to information on the relative quality of temporary employees? Sounds complicated, but this is all feasible. It requires better tracking of longitudinal employee performance data; the provision of a platform from which employees can market their profiles to potential employers; and the inclusion of employer input in the selection of employees.

Third-party tracking and publication of performance data for temporary employees would enable differentiation among low-wage temp employees. All too often, high and pitiful performers alike have the same long-term job prospects because employers have no information with which to identify high performers, and employees are limited in their ability to effectively document and communicate their work experience and qualities. Differentiation would mean that high performers can be identified and recognized for their skills, work ethic, reliability, etc. (via temp agency and employer feedback), while low performers can also be identified and – ideally – targeted for skills training or other supportive services that can better help them succeed. Critically, employers will have the information they need to choose among an A, B or C team, and the option to pay wages commensurate with the quality of the employees they select.

Providing a standardized online platform for employees to market themselves directly to employers – utilizing the performance data discussed above as well as additional metrics – reduces the role of the staffing intermediary and allows employers and employees to capture value in the form of reduced fees and higher wages, respectively. With an online profile that outlines job history and performance, temporary employees are no longer at the mercy of temp agencies’ sales and matchmaking efforts. Rather, they can make the sell themselves, backed with third-party verified data and references, and market their services to a limitless audience of employers.

Finally, allowing employers to access performance data and play a part in selecting temp or temp-to-hire employees would greatly increase the probability of making a successful and long-term ‘match’ between employer and employee. Hiring managers who are unable to articulate the characteristics are skills that make employees successful within their organization may still be able to recognize these intangibles in candidates’ resume, profile or personal statement.

These simple measures have potential to revolutionize the low-wage labor market and our country's understanding of the 'Working Poor'. It could make employees increasingly accountable for the quality of their job prospects, while saving employers immeasurable time and money through intelligent and cost-effective recruitment. At a very minimum, the aggregation and publication of low-wage temporary employee data is sure to challenge how our publicly-funded workforce development programs define success and require us to revisit how we can more effectively provide very low-income individuals with a real opportunity for prosperity.

[1] Autor, David and Susan Houseman, “Temporary Agency Employment: A Way Out of Poverty?,” Working and Poor: How Economic and Policy Changes are Affecting Low-Income Individuals, ed. Rebecca Blank, et al. (New York: Russel Sage Foundation, 2006) 312-337.

[2] Ibid.

WorkSquare Prosperity Day - February 21st!

WorkSquare is thrilled to partner with the Prosperity Campaign and sponsor Citi to present our Members and the Miami community with WORKSQUARE PROSPERITY DAY on Saturday, February 21st, 10am to 2pm!

In addition to free tax prep and benefits screening, WorkSquare will have an in-house resume workshop and information on low-cost banking opportunities.

More information to follow. To request an appointment for free tax prep, contact Oscar at (888)815-9994.

A huge thank you to our community partners -- Human Services Coalition, South Florida Urban Ministries, and World Relief -- and to our sponsor Citi for making this possible!

We're looking forward to a great and prosperous day!

Employee Referrals and the Power of Social Networks

I had a great conversation with a hiring manager of a large Miami hotel earlier this week. One idea that we discussed was his company's success with an employee referral program for front-line workers -- current employees are compensated for referring a friend or acquaintance who they know would be a good fit.

This is the power of the 'vouch'. Why does this work? What does this mean for social networking and leveraging the social capital of front-line employees?

Employee-referred candidates are likely to have realistic expectations for what the job entails. They also may feel more incentive to 'stick with it' as they have a role model who has done it before them and who will be disappointed if they do not.

Employee-referred candidates have a built-in 'support system' in the employee who referred them. The questions and uncertainties endemic to a new position and new team can be addressed to their friend -- rather than managers or HR. This is particularly crucial when communication with direct managers is a challenge, as it often seems to be.

Front-line employees have social capital and knowledge that can be hugely valuable to HR and management. They often know more about the requirements of their positions and the types of personality that would excel than does management or HR. They may know how to communicate better with their co-workers to get the job done than does their manager. Finally, they're more likely to have the social networks that can attract good employees than do their managers or HR. The results -- reduced turnover, happier workforce, enhanced employee commitment, improved intra-team communication -- equal increased value for everyone. Let's tap it.

Graph on Income, Work Supports, and Non-Bank Services

A graph on income that I put together. Discussion to follow. Please note that figures are estimates and need to be fine-tuned.

Employment and Social Networks of Low-Wage Workers

I've become increasingly interested in the role that social networks play in low-wage workers' job searches. Specifically, are some groups, say recent immigrants, more likely to recognize and leverage their social networks than their American-born counterparts? Are certain demographics more accustomed to developing and using social networks to obtain employment? Are social networks utilized for education, training, and career development, or merely to get into any available job?

I was excited to recently come across a 2005 paper entitled “Getting Connected: Strategies for Expanding the Employment Networks of Low-Income People”, written by Shayne Spaulding and published by Public/Private Ventures.[1] This was a great primer on the importance of social networks to low-income job seekers. Spaulding cites research indicating that more than two-thirds of low-income job seekers find jobs through personal connections, compared to 40-50% of all job-seekers. Another study he cites reports that 88% of hiring managers for low-skilled positions rely on internal referrals from employees already working with them and that 64% use this as their primary recruitment method.

Spaulding then goes on to describe the challenges to effective utilization of social networks by low-wage workers. Among these challenges are; the small size of many job seekers’ networks; a reluctance to let peers or acquaintances know that they are looking for work; the homogeneity of employment situations among social networks (many unemployed or low-wage earners have social networks that include only other unemployed or low-wage earners); and a lack of awareness on how to take advantage of social networks in order to obtain employment. The paper then discusses a variety of programs implemented by workforce development agencies to train low-wage job seekers to use networks, most involving the development of an “elevator pitch” and business cards, and providing opportunities for job seekers to mingle with individuals in the jobs or careers they hope to obtain. The most novel solution was one by Street Tech in San Pablo, California, who worked with LinkedIn to develop an online networking application for low-wage workers. I plan to investigate this tool further, so more to come on that.

Spaulding also discusses the difference between ‘weak ties’ and ‘strong ties’ in employment networks, which he says is a concept put forth by Mark Granovetter in a 1973 work, “The Strength of Weak Ties”. Granovetter explains that information on available jobs often comes from ‘weak ties’, or individuals that do not know the job seeker well and who cannot necessarily vouch for the employability of the job seeker. Clearly, the value of employment networks would be greatly enhanced for both job seekers and employers if a trusted intermediary were able to vouch for the job seeker’s work ethic and reliability.

This concept of “vouching” in the job search is fascinating, as it ties in with the critical role that social capital (one’s reputation and social network of acquaintances, co-workers and friends) has played in microfinance. When low-income people do not have collateral for the loan they are taking out, their reputation and social network can be put on the line instead. This insight, that the risk of losing one’s reputation and social network can be a powerful motivator to repay obligations, is the foundation of Grameen and other microfinance and group lending models. Clearly, the importance of losing one’s social capital in an urban environment – where new friends and contacts are readily available – is less acute than it is in a small village where transgressors must live among, and be punished by, the transgressed for years to come. Yet, I still believe that tying “vouching” to an individual’s social capital in a meaningful way could be prove a powerful way to recruit quality employees.

Do employees who refer another employee feel a risk to their own credibility if the employee they referred does not perform well? How can employees be incentivized to only refer those employees that they know will perform well? How can we formalize this “vouching” in order to leverage its power on a larger scale?

[1] Spaulding, Shayne, “Getting Connected: Strategies for Expanding the Employment Networks of Low-Income People”, Field Report Series, Public/Private Ventures, November 2005.