The unemployment rate, despite continued efforts, continues to rise. Red Alert Politics reported approximately three weeks ago that the unemployment rate for Americans between the age of 18 and 29 has skyrocketed to 11.6%, according to the non-profit organization Generation Opportunity.
This alarming percentage brings a spotlight to the employment process as young people brainstorm how they may find their way to a job. It is not only job seekers who are paranoid about the lack of available positions; employers themselves seem worried. Oftentimes a strong résumé and a solid interview are not enough to get your desperate, money-deprived hands on employment. (In fact, you would be considered one of the lucky ones if you even managed to score an interview.) Instead, many of the young people who are obtaining internships and work are now recommended through a current/former employee. This concept is not new, but the increased emphasis on this procedure that is dangerous. With only those with insider connections getting the jobs, what can outsiders do?
In January, the New York Times published an article titled “In Hiring, a Friend in Need Is a Prospect, Indeed.” The article begins, “Riju Parakh wasn’t even looking for a new job. But when a friend at Ernst & Young recommended her, Ms. Parakh’s résumé was quickly separated from the thousands the firm receives every week because she was referred by a current employee, and within three weeks she was hired.”
Knowing someone within the industry has always been a factor in employment, but the continued reliance on interior references makes it increasingly difficult for those whose families or connections are unemployed or work paycheck-to-paycheck jobs with little to no prospects for future advancement. Ernst & Young, the company mentioned in the Times piece, is clearly unfazed by the difficulties placed on those without connections as they “have set ambitious internal goals to increase the proportion of hirings that come from internal referrals.” The New York Times reports that, “the company’s goal is 50%. Others, such as Deloitte and Enterprise Rent-A-Car, have begun offering prizes like iPads and large-screen TVs in addition to traditional cash incentives for employees who refer new hires.”
Offering rewards and incentives for referring candidates creates a conflict of interest, as an employer cannot ensure that the recommendation is genuine. Additionally, using the networks of your employees can be rather limiting, unless the organization is appropriately diverse, which would make said network more inclusive and expansive. Recommendations should be made because the candidate deserves it, not because of bonus iPads and TVs.
The biggest problem with this ideology of internal referrals is that it offers rewards to employees for making referrals while keeping new or unconnected yet talented young people from breaking into a field, excluding disadvantaged youth.
Judith K. Hellerstein, a professor of economics at the University of Maryland stated, “We’re in a period of historic displacement in the labor market. The long-term unemployed are a huge problem that we haven’t figured out. All this human capital is being wasted and their skills are atrophying.” The basic fact is that some people simply do not have access to the networks needed to succeed due to their socioeconomic status.
The problem of this insider game is growing worse before it’s getting better. In 2012, the Washington Post reported that Collabraspace, a software and consulting company, was using a referral program which offered a lump sum of $10,000 to employees who referred a job applicant that was hired. Perhaps it is the aforementioned paranoia felt by employers to use programs to find the best candidate, but even software solutions still run into the problem of eliminating those who cannot access the powerful networks that would get them into this pool of recommended candidates.
Networks do not automatically indicate the skill of a worker. Perhaps it is the employers who should re-evaluate their system, as they may be missing out on potential employees who have great passion and innovative ideas.