January 21, 2013

Systemic Recruitment Fraud: How employers fund America’s jobs crisis

Filed under: Hiring, Job scams, Job Search, Q&A, Readers' Forum, Recruiting, Stuff I worry about, Stupid HR Tricks

In the January 22, 2013 Ask The Headhunter Newsletter, reader John Franklin (who appeared with me on a PBS NewsHour segment last September) says recruitment advertising is often deceptive and asks how widespread I think the problem is:

Hi, Nick — Happy New Year. I was one of the other folks featured in the PBS story Is Applying for Jobs Online Not an Effective Way to Find Work? I’m writing to follow up on one point that I made but which didn’t get addressed due to the time constraint: companies running advertisements to update their talent pools and databases vs. actually doing any recruitment.

From my experience, this is an extremely common and rather deceptive practice that contributes to a great deal of the frustration experienced by so many job seekers. They see an ad that fits them perfectly, but it turns out to be nothing more than an invitation to submit so you can become a file listing as opposed to a candidate. In your opinion, how widespread is this practice?

(Thanks in advance for your input — great job on the piece!)

Nick’s Reply

Happy New Year to you, too! Thanks for writing to follow up on an important point you made to PBS NewsHour that didn’t make it into the program.

The practice you describe is as old as job ads. It probably seems innocuous to most people, but it’s an insidious practice that I believe contributes heavily to America’s jobs crisis.

When employers published jobs primarily in newspapers, they’d create what we used to call “composite ads.” To save money, they’d run one ad rather than five, and that one ad would include requirements for perhaps five different positions. It was the proverbial kitchen sink of recruitment advertising. The hope was that they’d get enough resumes with enough of a mix of skill sets that they’d fill at least one job, hopefully more.

recruiting-whopperFraudulent job ads

At the same time, employers were doing exactly what you’ve noticed: filling their filing cabinets with resumes. I’m sure employers bristle at the suggestion that this is deceptive. “We’re soliciting resumes for jobs! So what if that includes jobs that are not open yet?”

It’s worse than deceptive. I think it’s fraud. A job ad is a solicitation that implies there is a current, specific, open job to be filled. This creates anticipation in the job hunter, and the reasonable expectation that the job will be filled in short order — not that the resume will be filed, to be used later and who knows when. Job hunters reasonably expect a timely answer when they submit their resumes. But we all know what really happens: usually, nothing at all.

If employers want to gather resumes to stock their databases, that’s fine, but they should disclose what they’re doing. I’m sure they’d nonetheless rake in lots of resumes, but at least people would know the difference between applying for a job and applying to have their resume stored for later use.

Fresher stale jobs and resumes

How “fresh” can stale jobs be? The games employers and job boards play with resumes don’t end there. You’ll find that employers “update” their job postings with a few minor changes to keep them high in the “search results” — even though there’s no material stale-breadchange in the position. And the job boards encourage this practice. They remind employers to “refresh” their postings as a way to make the jobs databases appear “up to date” with “fresh jobs daily.” It’s a racket and a conspiracy. It allows a job board to claim it’s got X millions of “fresh, up-to-date job listings!” when all it’s got is stale bread with a new expiration date stamped on it.

The job boards tell job hunters to do the same thing with their resumes. “Keep your resume high in the results! Update it regularly!” Translation: Keep visiting our site so we can report high traffic to employers, who are so stupid that they not only “refresh” their own old listings, they pay us even more money for “refreshed” stale resumes!

HR funds the jobs crisis

Corporate HR departments are funding and propping up the job boards in an epic scam that has turned real recruiting into a bullshit enterprise that has nothing to do with filling jobs. The con is enormous. I believe it’s the source of “the talent shortage.”

After creating this fat pipe of resume sewage, employers complain they can’t possibly handle all the crud it delivers to them every day. “We received a million resumes yesterday! We can’t find good hires! And there’s no time to respond personally to everyone who applied!” Of course not. If you had to dive into a dumpster of garbage to find a fresh carton of milk, you’d complain, too. The trouble is, it’s HR departments themselves that are paying job boards to gather, store, and sell that drek back to HR. It’s incredibly stupid, but when’s the last time you saw the HR profession do anything smart in recruiting?

A billion dollars worth of nothing

Where does the jobs crisis come from? Why can’t good people get jobs? Consider Monster.com, the world’s biggest job board. In the last four quarters, the world spent dumpster-empty$1.05 billion to fill and then dive for resumes and jobs in this dumpster. Yet year after year since 2002 employers have reported that Monster was their “source of hires” no more than about 4% of the time. Is there anything to call this but a conspiracy between HR departments and the job boards? Is it anything but a racket? Is it fraud?

When a company publishes a job solicitation that’s intended only to stock a database, that’s deceptive. When employers publish jobs on a website that they know doesn’t fill many jobs, I call that systemic recruitment fraud.

The most stunning outcome is that recruitment advertising is choking the very employers that pay to prop it up. You’ve nailed the problem: Job ads — no matter what their form — are often deceptive. They’re not used to fill jobs. They’re used to build deep databases of old resumes. That’s what the jobs crisis floats on.

Billion of dollars spent on databases to find and fill jobs — while employers cry “talent shortage” and record numbers of talented people can’t get hired.

Yet another rant about job boards and HR practices? Yep. Is there a board of directors out there that realizes it’s funding the jobs crisis with its investors’ money? Contribute your stories and comments below. Nothing will change until the purveyors of this sludge get their noses rubbed in it.

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69 Comments on “Systemic Recruitment Fraud: How employers fund America’s jobs crisis”
By SoundAdvice
January 23, 2013 at 2:05 pm

Nick- Soylent green..awesome!

Miriam- It’s unfair for sure and while there’s an explanation for it, it’s only worth understanding enough to find a way around it.

By marybeth
January 24, 2013 at 2:39 pm

Nick, thank you for such a wonderfully detailed letter and response this week. This whole practice is the new normal and I don’t know what it will take for businesses and agencies to wake up. I think it is a number of things that have created this perfect storm: a dismal economy, a large number of people who are unemployed/underemployed/employed but not working in their field, new technology that has excised all human interaction in initial hiring process (a computer makes the selections and if not one of the 10 million people who submitted applications through the online system are a perfect match, the company starts over rather than looking for someone with 8 or 9 of the 10 criteria and training the new hire), an unwillingness on the part of employers to train people (I read an article last week in which an employer was quoted as saying that he can’t find talented, good workers who are 100% effective in the job from hour 1, day–that is, no training needed) and low wages/salaries.

Right now it is an employer’s market but at some time that will (hopefully) even out sooner rather than later. I’m with Nick–employers are being more than stupid, they’re hurting the company in the long run if essential positions remain unfilled because of HR territorial pissing contests and because hiring managers are too reliant on computers doing hiring for them. Hiring is a crapshoot–even the best candidate can leave–maybe his/her spouse gets a good job and they move, maybe there’s an illness/death in the family, maybe it’s due to health or personal reasons, maybe the new hire got lured away by another company offering better pay/better hours/better benefits/no commute…pick your favorite. You could hire the best candidate and he could get run over by a bus, hit by lightning, and then you’re back to square one. In my parents’ generation, people often stayed with an employer for years and years, many times for their entire working lives. They worked hard, were loyal, and the company was loyal back. That is no longer the case–companies don’t want lifers, and many are not good to their employees.

I think HR should be limited to payroll and benefits and leaving the hiring to the actual person who knows what he needs and the ins and outs of the vacancy best. Sure, HR can help when it comes to the vetting (for those who require background checks for security purposes), but I feel less and less sorry for hiring managers who have ceded their authority to HR, then whine that there’s a talent shortage.

The talent shortage appears to be in HR and with company management (for letting HR get away with it). Computers and technology are wonderful and can make our lives easier in many ways, but I don’t think they’re a substitution for actually reading (carefully) resumes and good interviewing. Years ago, when you went to the library you looked up books and materials in the card catalog. The benefit to using a physical card catalog is that you flipped through the cards (entries) and often you’d find something that you hadn’t even considered but still decided to check out. Or if you weren’t sure how to spell the author’s last name McCleod, flipping through the card catalog would have all of the authors with the last name McCleod interfiled–both MacCleod and McCleod. Now, with the system online, the computer is very particular–you have to get it exactly right–if the author you’re looking for is McCullough and you type in Maccullough, you won’t find what you’re looking for. The online system has blinders on. I feel the same thing is happening with hiring practices due to the shift to the exclusive use of online applications and screenings. Computers are dumb–they don’t know that the person who meets 9 of the 10 criteria could be the best candidate for the job, an excellent cultural fit, and a good worker. The computer will exclude him and delete his application without a flag or a thought. Only when human beings start doing the hard work of hiring and thinking again–9 out of 10 criteria met, the one he doesn’t have is something we could train him to do–will things change.

It is common sense, but sense isn’t common. Nick, if you ever get your management/leadership/boards in a room, I hope that you smack them silly and knock some sense into their heads. There’s lots of good people looking for work, jobs going unfilled, and companies are letting it happen because of computer systems with blinders.

By Julia
January 25, 2013 at 2:50 pm

I’m not sure it’s even legal to store, use and distribute somebody’s resume without their explicit permission… I had my resume and contact information sold/distributed around by contingency recruiters who’d collected my resume and then disappeared. I get somebody contacting me, saying I talked with them earlier, but I have records for the past few years, and I know that I never talked with this person. Then I investigate and they just got my resume from somebody else. One recruiter even took it from the company HR he used to work for. I got replies “to your resume on Dice” long after I removed my resume from Dice, like there is some stripping script running there. How am I supposed to submit my resume and contacts if they get stolen so easily?

By Dave
January 25, 2013 at 3:10 pm

@Julia –

Here’s the thing I’ve seen done in my experience:

I’ve seen several “recruiting” companies get spun off and change names. This is quite frequent in my area.

I’ve also seen my resumes in some random recruiters database, only to be called years later about an unrelated job. You may have talked to the company years ago.

Regarding Dice… I seriously think many recruiters troll the job boards for interesting people. It takes it years to vet them all though.

By Miriam Suliman
January 25, 2013 at 9:33 pm

I am also having and had that problem. Recruiters call me and tell me that definitely they will get the contract and make it sound like I will be hired in a month or two months and with contingent letters or upon award of the contract. Then they disappear and I don’t hear back from them. Some of them also make me fill plenty of documents and ask for photocopies of my social security card and my passport. They also ask for my personal information, which I give and then they disappear. Please, can someone tell me, what should one do when they ask for all these personal information. I really don’t trust any longer companies and recruiters. They are playing with job seekers’ emotions.

By Karsten
January 27, 2013 at 9:08 am

The best thing would probably be to insist that the recruiters confirm, in writing, that they are assigned to fill a specific position at the specific company, and that they can give you contact information to a relevant manager at that company, who can confirm. If not – just pass them by.

By Miriam
January 27, 2013 at 11:19 am

Thank you very much Karsten for answering my question. I hope that they become aware that job hunters are now aware of their tricks and in consequence they stop doing that to them.

By Eddie
January 29, 2013 at 11:16 am

How does this process perpetuates itself? or does it? A headhunter gets paid a fee for sucessfully placing a qualified candidate with a client, a win-win-win situation. But these fraudulent placement schemes are just parasites on the system draining out resources and producing no value. What is the process of bringing value to the agency, client and candidate?

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By Donna C
February 16, 2013 at 8:57 am

1) I understand the Feds COUNT these job postings as real jobs, thus feeding a myth that the economy is recovering, when one is counting the empty storefronts on Park and Lexington Avenues in midtown Manhattan after a failed holiday season.
2) Nothing said here about about job boards ‘meshing’ each other to boost SEO. These job boards set up others (feeders) to ‘rebroadcast’ their postings. Ladders has a whole bunch of feeder sites etc. Most of these jobs are either fake or gone.

By Eddie
February 16, 2013 at 10:02 am

“the Feds COUNT these job postings”.
If that is the case, Is it perjury?, then it is a FEDERAL CRIME defrauding the government. Seeing how many firms are traffacking in misinformation, possibly RICO (Racketeer Influenced Corrupt Organization)? and would the A.G. be also be investigating this? When will we see HR executives lead away in orange jumpsuits and handcuffs by US Marshalls?

By Kevin
February 25, 2013 at 4:03 pm

There appears to be a trend on this blog: anyone and everyone who has ever been offended, cheated, wronged or simply do not like HR. Rather than try to argue with every whiny complaint I’ve read, I would simply like to know some statistics. While I agree that there are bad HR departments out there, there as many bad hiring managers, CEOs, employees, headhunters, etc. And, in some cases, it’s the nature of a particular industry.

How about sharing some statistics on the number of companies that “fund America’s jobs crisis
“. Or, how many companies are “filling their filing cabinets with resumes”. Or, is your assumption that almost all HR departments suck and that the percenatge of good ones is about .000001%?

From my perspective, I’ve never met a headhunter that didn’t lie directly to my face (well, there was that one headhunter in 1999 that seemed honest). But, I don’t dedicate an entire blog to it so that other “professionals” can jump on the bandwagon and bash all headhunters.

Grow up.

By Nick Corcodilos
February 25, 2013 at 9:31 pm

@Kevin: Based on anecdotal evidence gathered over a few decades, about 95% of HR workers aren’t worth spit. Coincidentally, about 95% of “headhunters” aren’t worth spit, either. (I welcome hard evidence to the contrary. In the meantime, I trust my estimates.)

The former profession seems to attract lazy bureaucrats who hide behind policy manuals and white papers issued by expensive consultants who once upon a time were useless personnel jockeys themselves. The latter clearly attracts a lot of fast-buck artists who don’t care about their reputations, but love dialing for dollars.

There are a lot of very good HR folks and headhunters out there, but they are far outnumbered by the cranks. The good ones could end the jobs crisis, but it’s hard to do a good job recruiting and hiring when you are assigned to diddle the CareerBuilder and Monster.com databases all day long…

There is no hard data that I’ve ever found to answer your question. But indirect evidence comes from a very few surveys that have been done over the years about where HR and “headhunters” turn for help recruiting “talent.” Last year they spent literally billions of dollars on job boards. E.g., Monster.com, $1.03 billion. Monster was cited as the “source of hires” by those same personnel jockeys about 3% of the time. CareerBuilder and others are no better. You know a fool by who he does business with.

By extrapolation, about 95% (maybe 97%) of personnel jockeys don’t deserve the salaries they’re paid. The “headhunters” that “find” all the drek resumes that they send along to HR – on the same job boards – deserve the lousy reputation they create for their entire profession.

Looks like there’s a common thread here, doesn’t it? Follow the money. Then follow the personnel jockeys and the “headhunters.” The ones that drink from the job-board swill trough are creating a fake “jobs crisis” that corporate America still does not recognize as an enormous racket bleeding its coffers dry.

Can 12 million unemployed Americans (not counting under-employed and those who have given up) all be wrong? Ask them what they think of HR and headhunters.

By Kevin
February 26, 2013 at 12:45 pm

So, anecdotal evidence, but no real experience working IN an HR department. All evidence is working WITH an HR department. I would suggest that, until you are in the trenches fighting the same fights as those people, stop lobbing grenades. What you see from outside the foxhole is not the same as what is actually happening in the foxhole.

As you can tell, sweeping generalizations like yours (apparently on a regular basis and without much merit other than “anecdotal”) don’t sit well with me.

By Nick Corcodilos
February 26, 2013 at 1:24 pm

@Kevin: So I have to be a doctor, too, before I can talk about doctors? Do you work in HR?

(What fights are “these people” fighting?)

I don’t see many HR folks commenting on, or explaining, the HR behavior that job applicants complain about. Is it possible everyone is making this stuff up? That nameless corporate bureaucrats are behaving badly toward job applicants, but HR has nothing to do with it?

Do I need to work in a supermarket to debate poor service in the supermarket?

If you look around, quite a number of HR folks actually do comment on this blog. And many share “anecdotal” information that paints a pretty grim picture of HR. Not all HR workers do the things job hunters complain about — but enough do that it’s a problem. Ignoring it because we have no scientific data doesn’t fix it.

By Kevin
February 26, 2013 at 3:08 pm

Using the “poor service” example as a basis, it is also true that people are far more likely to complain about poor service than they are about good service. That is human nature. But simply because you only hear the complaints does make the whole system bad.

And, yes, I do work in HR. I’ve worked with some exceptional HR professionals and I’ve worked with some real boneheads. Many of the policies you accuse us of hiding behind are driven by federal, state and local laws, or the company’s legal department trying to keep the company from getting sued because a manager or employee does something stupid.

That does NOT excuse the black hole that many candidates find themselves in. I do not tolerate a lack of responsiveness form my team, but I am well aware that is not universal. As I said earlier, until you’ve been in the foxhole, don’t throw grenades. HR and Recruiting get their directives, budget, requisitions, etc. from senior management. HR gets pegged as the PITA roadblock, and people like you perpetuate the myth.

Get a job in HR and try it out. You may hate it, but at least you will have a better perspective.

By Nick Corcodilos
February 26, 2013 at 4:25 pm

@Kevin: Like any other profession, HR has associations and lobby groups. I don’t see HR as a profession working very hard to change laws, policies, and directives that are counter-productive. If anything, HR associations seem to rationalize and point fingers. You’re doing it yourself: “It’s no our fault.”

I started headhunting in 1979. I’ve known a lot of HR people and departments. Some of the people are/were outstanding at their work. Fewer departments are. The business is incredibly bureaucratic. I’ve seen precious little initiative from HR to push change through the system — and I’ve seen too much bureaucratic head nodding, going along, rationalizing.

I don’t want a job in HR. I’ve had offers. But I’m not interested in the culture. I don’t want to be a doctor, either. That doesn’t mean I can’t discuss what I see and push for change from the outside. But I think the bigger solution is to dismantle HR as we know it. HR should not be involved in recruiting and hiring, for example. I’ve posted columns about that.

I welcome you to discuss initiatives you’ve led to make things better. Tell us about what makes the system work more effectively for everyone — and how you’ve done it. Tell us about the postive side of HR. I mean that — I’m not being sarcastic at all. I get pretty specific when I criticize. I welcome you to get specific, too.

By Kevin
February 26, 2013 at 5:26 pm

At no time did I say it was or was not “our” fault. What I am saying, however, is that you seem to want to pin all of the blame on one organization. To me, that demonstrates your ignorance of what HR can do (and in many cases actually does).

If I really thought there was any value in sharing with you the innovative and collaborative initiatives we’re working on, I would. I find it unfathomable that you know a lot of great people in HR, and yet cannot say one positive thing about HR. You are a lost soul if you do not see the lobbying that HR associations are doing on behalf of the profession, employers and employees. There are countless HR professionals in the trenches every day trying to improve the impact and value that HR adds. I can’t make you see what you choose not to see.

I understand you’re a headhunter, and it is in your best interest to make a case for removing the recruiting function from HR. All the better for you. You’re probably pissed because HR gets in the way of you gaining direct access to hiring managers. More stupid rules, I know. But to dismantle the HR organization is absurd.

You know, though, those pesky folks in purchasing are always getting in my way, telling me what I can and cannot buy with company money, which vendors I can and cannot use. And it takes weeks to get a PO approved. Just give me a blank check and let me go at it. And the legal department, with all their silly rules about not stealing trade secrets, requiring sensitivity training, making everyone sign contracts….what a pain. We should dismantle that department because they just get in the way. And don’t get me started on IT! Really?! I have to change my password every 30 days? Is it my problem that some foreign government is trying to hack into the servers? Get out of my way, IT….you just slow me down.

You and I are not going to agree on any of this, and that’s OK. The only point I have been trying to make to you is that you cannot apply a broad brush to an entire profession. Technically, you can, but that would also be absurd. I get it, I really do. You’ve been a headhunter all your life, always on the outside of HR looking in. You want to push for change from the outside, rather than stepping up and attempting to facilitate change from the inside. It’s easy to stand on the sidelines and make snarky comments about someone else’s job.

And, let’s be honest, for many HR professionals, HR is their career. They went to college, chose HRM as a field of study and joined the workforce. They go to work every day trying to improve the way their company hires, trains, motivates and retains their employees. Then, one day, someone from the outside says: “Hey, your profession is a piece of crap and we should work to systematically dismantle your entire function”. Nice.

I’m actually surprised by the source of this blog. Headhunting, as a profession, has a poorer reputation than HR. Some call headhunters sleazy snakeoil salesmen. I don’t, but some do. That’s just the nature of the beast. At the end of the day, it’s all about glass houses.

By Ask The Headhunter® | Nick Corcodilos – Reductionist Recruiting: A short history of why you can’t get hired
May 11, 2015 at 9:52 pm

[…] a disaster of such epic proportions that somebody named it “The Great Talent Shortage.” (See Systemic Recruitment Fraud: How employers fund America’s jobs crisis.) HR departments got flooded with applications they couldn’t process — so somebody invented […]

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