US companies now dropping requirements for workers in response to labor shortages

Companies in the U.S. are now overhauling their hiring processes and dropping certain requirements for workers. This paradigm shift amid the labor shortage could help millions enter the workforce and fill up much-needed positions.

With job vacancies numbering more than the applicants available, companies have devised ways to attract more people to sign up. Relaxed job requirements mean that nearly two-thirds of American adults without any bachelor’s degrees who may have the skills or aptitude required by well-paying jobs may now have a fighting chance.

According to labor market analytics firm EMSI Burning Glass and private research group Conference Board, 1.4 million jobs will open to people without college degrees in the next five years if companies continue relaxing requirement for potential hires.

They said that based on their data, 42 percent of employment ads for insurance sales agents in January 2019 required a bachelor’s degree. This dropped to 26 percent in September 2021.

Chamber of Commerce Foundation Center for Education and Workforce Vice President Jason Tyszko noted that the shift in labor market was a silver lining in itself. He pointed out that applicants formerly overlooked by recruiters are now appearing in their radar.

“When you have a labor market like this, it’s not uncommon for employers to start relaxing hiring requirements. When the market tightens up – they can reintroduce some of these additional requirements [and] that tends to happen,” Tyszko said. (Related: Chamber of Commerce: Labor shortage plaguing businesses nationwide is worsening.)

Before the current shift, many companies saw a flood of applicants willing to fill up vacancies. Thus, some instituted education and minimum work experience requirements to filter out those suitable for positions. Now, more employers have reconsidered their college degree requirement and are focusing on skills instead.

The Department of Labor said on Nov. 5 that there were 531,000 job vacancies added in October 2021, although unemployment fell from 4.8 percent to 4.6 percent. The U.S. labor force has declined by millions since the Wuhan coronavirus (COVID-19) pandemic began. Some economists also say that workforce participation rates will no longer return to pre-pandemic levels.

The Body Shop benefited from open hiring practices

Beauty products company The Body Shop (TBS) is among the many companies that dropped educational and work experience requirements for potential hires. First implemented in 2019, TBS’ open hiring system worked wonders for the company. TBS outlined in its website that it seeks to “attract, recruit and retain developing talent from the widest possible talent pool.”

According to Nicolas Debray, TBS president for the Americas, the rate of performance-related terminations in the open hiring program since its launch has been about the same as with people hired via routine screening.

“The biggest challenge is that people second-guess a person’s ability to do the job, and maybe they have some doubt, suspicion [or] biases also because we don’t do the background check,” he said.

The company first tried the open hiring system in 2019 by means of a pilot program in its Wake Forest, North Carolina distribution center. Hiring requirements – including drug tests and background checks – were eschewed to address inequality, opening positions to those seeking a second chance or needing extra support. More than 200 seasonal employees came aboard as a result.

The following year, TBS expanded open hiring to all seasonal entry-level retail jobs – eventually becoming the model for all of the company’s entry-level retail and warehouse hires in 2021. Seven hundred thirty-three employees joined the company via open hiring by the middle of September 2021, with 80 hires becoming part of the company’s permanent staff.

Under TBS’ open hiring system, recruiters ask potential hires only a few questions – if they are legally authorized to work in the U.S., if they can lift 25 pounds and if they can work an eight-hour shift. Potential distribution center employees are asked if they can lift 50 pounds, while potential retail employees are asked why they want to work with customers. (Related: Restaurants look to ROBOTS to fill openings amid labor shortage.)

The open hiring system not only gives the company enough workers to handle orders, it also allows individuals to turn over a new leaf. Durham, North Carolina resident Joshua Taybron was arrested in 2019 and charged with the murder. While prosecutors dropped the charges, the 33-year-old said he was worried that the records ruined his chance of getting a job.

He saw a billboard advertising job openings at the Wake Forest distribution center in 2020, getting hired to pull items off shelves and prepare them for delivery. However, he was terminated the first time due to poor attendance. Taybron’s former supervisor called him and asked him to reapply.

The Durham resident was eventually rehired, promising to do better for his second shot.. He hopes to get hired for a permanent position after the holidays. “They take a chance on people, and it works out as long as you do your part,” Taybron said.

Collapse.news has more articles about the ongoing labor shortage in the United States.

Sources include:

WSJ.com

Careers.TheBodyShop.com