I just came across a report by The Future of Work forum titled “Employing the Next Generation.” I want to share the five key findings of their interviews with youth graduates in countries across Europe. Here are the quotes:

• They are very, very worried about their inability to get meaningful, valid work experience. As one put it “No experience = No job. No job = No experience.”
• Career advisory services don’t work. They are either non-existent or, perhaps worse, irrelevant. Career counsellors are out of touch and don’t understand the expectations and needs of today’s employers. This area needs a complete, drastic rethink.
• Schools, colleges and universities still persist in turning out graduates qualified to do jobs that have already vanished and will never come back. Educators need to change their curriculums to be relevant to the employment needs of the real world. Most importantly, these smart NEXT generation people are finally understanding that a lot of what they are being taught has no practical application in getting them employed.
• Finally, these hard times mean that the NEXT generation isn’t too worried about what kind of company they work for, or what sort of work conditions they have. They just want to earn some money and perhaps hope for some future job prospects. These people are growing up fast in a hard, unforgiving labour market. The question is, can we find jobs for them to do? And if we can’t – what then?

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Commentary:

From a macro-level policy standpoint, there are clearly numerous biases against youth. Just some quick examples: kicking the can of national debt down the road; kicking the climate change problem down the road; kicking the health care cost problem can down the road; the subsidy of the student loan debt phenomenon, in which education institutions are sheltered from fundamental reform for having continuous cost increases. These points are fairly well established and certainly play into the strong youth presence behind the Occupy movement. 

What I haven’t seen as broadly discussed are the biases implicit at the organizational level. In my view there are two main biases against the younger generations in standard organizational practices and both are alluded to in the bullets quoted above:

1. “No experience = No job. No job = No experience”
2. “Career advisory services don’t work.”

Before I delve into those, consider this stat (pulled from this post):

• In 2007, the youth unemployment rate in the OECD was 14.2%, compared with 4.9% for older workers. In the first quarter of this year the rates were 19.7% and 7.3%, respectively

Now….. explain that. Clearly, there’s a systemic distortion in the employment process towards incumbents (older generations) and against newcomers (my generation). Setting aside the macro-level policy issues and the education/training issues, I want to focus on what, on a firm-by-firm basis, could be happening that would lead to a reality where youth unemployment is triple that of older workers, despite the fact that many younger-generation workers are generally much more savy with today’s in-demand technology: social media.

If you look at any job posting online, you’ll see that your typical company is looking for candidates with two things. The first is previous industry experience. Previous relevant work experience is often a requirement even for entry level positions. Here’s a quote from an associate-level posting I happened to have up on a different tab in my browser: “Bachelor’s degree and/or a minimum of 2 years of relevant work experience required. A Master degree in relevant areas of coursework is a plus.” This alludes to point number one from above: for your typical job at your typical firm, there is an implicit bias in the hiring process towards older workers with more “experience” - even if the details about and quality of that experience can likely never be known by the hiring organization. Thus, you get: “No experience = No job. No job = No experience.”

Now on to the second bias. In a typical job posting, a company is also looking for someone with detailed knowledge of industry-specific business practices. This alludes to point number two from above: “Career advisory services don’t work.” On one level, if what businesses want is detailed knowledge of industry-specific tools and software, then education institutions should be training them with those skills. Both students and employers would benefit from that. On another level, though, in specifying as a hiring requirement detailed knowledge of a program like “PeopleSoft,” something that an education program can’t realistically cover in its curriculum, the organization is enacting a bias towards older workers with industry experience (the only way they realistically could have learned that software) and against new workers who haven’t had the opportunity to be trained in such niche software.

The fact is, though, that any workers with experience in “PeopleSoft” would be those that received on-job training on it - so if you were fortunate enough to have an entry-point into the workforce where you may have learned this piece of software, then you have an automatic leg up on newcomers for obtaining future employment. The main problem I have with this is that using this type of criteria to measure someone’s potential value to your organization is terribly short-sighted. Here’s my breakdown:

• First off (for my strawman example), PeopleSoft is a piece of software that is designed to serve a specific function in organizational operations. Thus, it is designed as an performance aid and thus it is designed to be widely learned and adopted - i.e. it is designed to be easy to learn and use and to train people on. Hiring based on previous experience with this piece of software saves the organization - what? - maybe a couple weeks of training? In the lifespan of an employee that’s nothing.
• My second criticism is that hiring someone based on a very specific skill set opens the door to change management problems. If I have several years experience working with “PeopleSoft” and you hire me to use that software at your company, then I’m the “PeopleSoft” expert. That’s my professional identity at the organization. But what if using “PeopleSoft” no longer fits in with the needs of the organization? What if a easier/cheaper software comes out? What if it’s cheaper to outsource? Well I, the resident “PeopleSoft” expert, have a clear stake in the continuous use of PeopleSoft. Therefore I have an incentive to want the organization to keep using the software I am an expert in - it’s what keeps me valuable.
• Third, change is inevitable and new workflow and analytics software is constantly coming out. Being an expert in one piece of software isn’t as valuable as being an expert in how to discover and quickly learn new tools as needed. Part of that is also acknowledging when the value of old tools has passed. So what the organization really wants is someone capable of learning and adapting. So how do you vet that? I think some might argue that experience in learning past software like “PeopleSoft” forebodes one’s ability to learn new software. Perhaps, but it’s not guaranteed - and anyway, how can you really vet that? Further, what about the bias against newcomers who haven’t had the opportunity to learn new software. Again - schools don’t teach software like that. Realistically, the only way to know is to see someone perform and evaluate them after a trial period. 

What I want to argue is that there is a common theme underlying these two problems: most organizations don’t understand talent. They don’t understand what it is, how it is developed, how it differs among people, how to evaluate it, and how to leverage it - they just don’t get it. All they have are industry norms and the industry norm is to evaluate people based on things like: “Bachelor’s degree and/or a minimum of 2 years of relevant work experience required. A Master degree in relevant areas of coursework is a plus.”

And it’s systematic, because… well just go on simplyhired.com, type in a key word, and search some jobs. The worst offenders are the larger, more bureaucratic organizations, but really you almost can’t find a posting that isn’t guilty of most if not all of these fundamental biases. The end result of this is a systematic underemployment of youth workers in today’s job market. Organizations aren’t growing as fast, the job market is tighter, there are less postings, and the ones that are out there go to those who’ve already been in the scene. 

That’s my explanation, anyway. I think you’ll find many people who rationalize that it is unavoidable that this happens - that there is no other way for organizations to cost-effectively vet job candidates - but I think if you really explore the literature surrounding the challenges confronting the businesses and institutions that have supported our country’s growth this past century, you’ll see that this misevaluation of talent is very much at the root of many of the problems these incumbents are currently facing. This phenomenon isn’t just bad for the young - it’s bad for the long-term prospects of the individual organization, of larger economic growth, and of our society’s ability to respond to the long term structural problems (laid out in posts throughout this blog, such as here).

You can’t understand the jobs crisis without understanding how it plays out at the organizational level. You are what you eat. If you’re ignorant about nutrition, you’re not going to be able to create dynamic performance. And you’re not going to compete when the competition starts accelerating.

(Note: if you want to read a case study of a company that does things differently, check out this post.)