by - HBR Despite near record unemployment during the Covid-19 recession, plenty of employers will face major challenges in hiring low-skill, entry-level workers when economic conditions improve. This is, in part, because the overall U.S. workforce will grow only 0.4% in the next several decades. A big part of the problem of finding low-skill workers is the barriers employers create when they focus on screening people out. Typical staffing processes are costly, time-consuming, and repeated endlessly. Businesses spend about $4,100 per employee processing resumes, then conducting interviews, background checks, and drug tests. Meanwhile, business leaders are being pressed to increase inclusion and diversity in their companies, whose typical hiring practices often exclude millions of people who are denied opportunities to make a living. They include the formerly incarcerated, the homeless, and those in recovery. What if there was a solution that not only meets workforce needs but also creates economic opportunities for those facing major barriers to employment While it may not be feasible for every business, the concept of “open hiring” is an innovative, counterintuitive strategy worth considering if your organization finds it difficult to recruit and retain dependable entry-level workers. This approach, which eschews resumes, interviews, and background checks, focuses solely on human potential and provides employment to anyone willing and able to work. Some of these requirements, like background checks, may be necessary in sectors such as education, government, healthcare, and finance. But for industries that rely heavily on front-line talent — manufacturing, distribution, retail, and food services, where candidates can be trained on the job — open hiring offers the opportunity for more diverse talent that would otherwise be passed over or ignored. Open hiring shifts resources to invest in workers, rather than finding ways to exclude them. Most important, this approach allows companies to build more resilient businesses and address one of today’s greatest social challenges: providing economic opportunities for people often viewed as unemployable. Since 1982, Greyston Bakery in Yonkers, New York, which produces millions of pounds of baked goods annually for customers like Ben & Jerry’s and Whole Foods Market, has used this approach while building a successful business with 70 Open Hire employees. New hires are offered a position when their name comes up next on the list of people who have expressed interest in working at the bakery. No resume, job interview, background check, or drug test is required. As a result, the business has virtually no hiring costs. Greyston then invests about $1,900 in hard and soft skills training for new bakers, as well as providing access to extensive wraparound services. Understanding that a job is just the first step for many in achieving success, the bakery connects employees with health, housing, childcare, and transportation needs to resources that will help keep them employed. So, when a young baker starts consistently showing up late for work, a counselor intervenes and may discover the employee’s childcare arrangements have fallen apart. The counselor then works with the employee to find a solution that benefits his family and the business. This model has enabled Greyston to build a profitable business over its 38-year history, while also putting money back into the community of southwest Yonkers. Greyston recently calculated that it generates nearly $7 million of local economic impact annually through public assistance savings, increased tax revenue, as well as reduced incarceration costs. Greyston is now working to scale open hiring and guide other employers in adopting this innovative staffing approach through its Center for Open Hiring (one of us, Sara, is the director). About half a dozen businesses have successfully adapted this model to their operations. One such company is The Body Shop, the international cosmetics company, which piloted open hiring in one of its distribution centers. The Body Shop typically hires 200 seasonal employees to handle the holiday rush in its warehouse located in Raleigh, North Carolina. Adopting the open hiring approach in late 2019, recruiters asked Comments are closed.
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