AI tools that companies use to scan resumes are stopping 27 million people finding new jobs, a Harvard report says

A man hands his resume to an employer at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds.

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• 27 million "hidden workers" in the US are being filtered out of job applications by automated tech, a report says.
• Their skills are regularly overlooked by the AI-driven hiring practices many employers rely on.
• Groups that are disproportionately overlooked include caregivers and immigrants, according to the Harvard report.
• See more stories on Insider's business page.

Automated hiring systems, such as CV scanners, are stopping an estimated 27 million people from finding full-time work.

Businesses relying on automatic, sometimes AI-driven tech are turning down viable candidates, which means these people are "hidden" from recruiters, according to a report by Harvard Business School and Accenture.

As many as 75% of employers rely on this technology, according to the report.

These "hidden workers" are defined as candidates actively seeking employment, but who are regularly denied, and discouraged, by "hiring processes that focus on what they don't have (such as credentials) rather than the value they can bring (such as capabilities)," the report said.

Groups that are disproportionately affected include caregivers, veterans, immigrants, people with disabilities, prison leavers, and people whose spouse has relocated, the report said.

The academics from Harvard Business School's project on Managing the Future of Work found that as the number of job seekers increased over the past two decades, companies increasingly turned to technology, such as software that scans resumes for keywords and experience, to filter out candidates.

The software scans applications based on specific criteria defined by the employer, but this often means it sorts workers based on what's missing from their CV, rather than what they can bring to a role, the report said.

Employers failing to widen their nets for candidates

This has coincided with a widening skills gap - the rapid pace of technological change has made it harder for workers to keep their skills up to date, the report said. At the same time, employers in general have failed to recognise the competitive advantage of widening their nets, researchers said.

The report sorted "hidden workers" into three categories: 63% are working one or multiple part time jobs, but would like a full time role, and 33% are seeking employment but have been unemployed for a long time.

The remaining 4% are classed as "missing from the workforce" in that they are not seeking employment, but are able and willing to work under the right circumstances. They may have specific caring responsibilities, for example.

To understand the wider impact of hiring practices on job applicants, the researchers also polled 8,000 former and current "hidden workers," as well as 2,250 executives from UK, US, and Germany. They found that COVID-19 has temporarily exacerbated the problem, but that finding work was just as hard pre-pandemic for many people.

The report makes a number of recommendations to companies. These include shifting from "negative" to "affirmative" filters when combing resumes, which emphasize the skills a person can bring to a role, rather than missing experience, such as not going to college.

Another recommendation is to make the application process easier to attract a wider pool of candidates - 84% of those polled said that they found job applications difficult.

Employers should also make it clearer when employees can expect to hear back, the report said.

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