New research finds strong evidence of bias against job seekers after only one month's unemployment

August 1, 2012

For more information, contact: Benjamin Haimowitz, (212) 233-6170, HHaimowitz@aol.com

How much does being jobless hurt the prospects of job seekers? Quite considerably, according to new research that finds strong evidence of bias against individuals laid off only a month earlier.

A scholarly paper to be presented at the forthcoming annual meeting of the Academy of Management (Boston, Aug. 5-7) concludes that, even though "economic research suggests that discrimination against the unemployed occurs as a function of unemployment duration (because of calculated probabilities of skill decay), our study suggests that a psychological stigma may decrease an unemployed individual's chances of obtaining a job independent of their duration of unemployment, skill, and qualifications."

"Although it has long been theorized that the simple fact of being unemployed carries a stigma, the idea has never really been tested outside some studies by economists who have focused on the duration issue," comments Geoffrey C. Ho, a doctoral candidate at the UCLA Anderson School of Management, who carried out the research with Margaret Shih and Daniel J. Walters of UCLA Anderson and Todd Lowell Pittinsky of Stony Brook University. "We found bias against the jobless, among human-resource professionals as well as among the broader public, virtually from the outset of unemployment."

He adds: "We also found that simply saying you were laid off doesn't lessen the stigma. Those two words by themselves don't elicit any more sympathy than 'left voluntarily.' What does allay people's bias is some explicit indication that losing your job was not your fault -- for example, that the company went bankrupt or suffered some specific setbacks that made layoffs inevitable."

The paper's findings derive from three experimental studies -- the first involving human-resource professionals, the second students, and the third a cross section of the general public.

In the first study, 47 human-resource professionals with an average of more than 13 years' experience in HR and almost eight years in recruitment were asked to imagine that their companies wanted to hire a marketing manager and were provided a resume for review. All participants received exactly the same resume except for one detail: half indicated that the candidate's most recent position extended to the present, and half revealed the applicant's last day of employment to have been a month earlier. In addition, a brief profile above the resume stated the applicant's name and job status -- "employed" or "unemployed."

Asked to provide a rating, on a scale of 1 to 7, for competence and hirability, subjects rated the employed candidate significantly higher on both, bestowing a mean rating of 4.08 versus 3.20 on competence and 3.24 versus 2.24 for hirability. This leads Mr. Ho, a former HR professional himself, to wonder if recruiters aren't missing out on good prospects because of bias against the unemployed.

"After all," he comments, "here we see candidates with strong resumes being substantially penalized for something that may not reflect at all on their ability to contribute to the company. Granted, if recruiters have to process a large volume of resumes, it may be natural for them to seek shortcuts. But at a time of high unemployment, as at present, employers would do well to reflect on whether the bias we have identified in this paper may be compromising company efforts to recruit the best people."

In a similar experimental study, 83 university students were divided into three groups to review resumes (again virtually identical) of applicants for marketing manager. The resumes provided to one group indicated that the candidate's most recent employment was to the present, while those for the two other groups indicated termination a month earlier. For the two groups of unemployed, half were described as "laid off" and half as "left voluntarily."

Participants again rated employed candidates as significantly more competent and hirable than the unemployed but did not distinguish between those who were laid off and those who left voluntarily. In the words of the study, "this is surprising given past findings...that uncontrollable stigmas elicit relatively more positive reactions." The authors' explanation: people's tendency, as demonstrated in behavioral research, to overemphasize internal reasons rather than external reasons for others' actions. Thus, "when drivers are cut off in traffic, research suggests that they will be more likely to blame the offending drivers' character or ability as opposed to searching for situational causes (e.g., avoiding a pothole)."

In a final study, the investigators probe the blame issue further, with an experiment varying from the second in two respects: 1) 112 members of the general public now view a 40-second video excerpt of an applicant's job interview rather than a resume; and 2) the two groups of unemployed are divided between "left voluntarily" and "employer went out of business."

This time, with the blame for the applicant's unemployment clearly pinned on the employer, the laid-off group suffered no stigma, being rated as highly as employed applicants for competence and hirability and being judged significantly higher on both than unemployed candidates who left voluntarily.

In the words of the paper, "these results suggest that unemployment and discrimination may be alleviated when a reason indicating the externality of an individual's unemployed state is made salient." In addition, "unemployment stigma occurs not only when individuals are reviewing a resume, but also when perceiving an actual person (i.e., through an interview video). Thus, unemployment stigma may be a robust phenomenon that affects people in their everyday interactions and not only when HR professionals are looking at resumes."

In conclusion, Mr. Ho reiterates the importance of "doing the utmost, consistent with the truth, to absolve yourself of responsibility for being unemployed," and he adds one further piece of advice: "Beware the gap. Do whatever you can to fill in the gap since your last job with any relevant activities, whether it's continuing your education or doing pertinent volunteer work or anything else that may enhance your qualifications for the job in question."

The paper, entitled "The Psychological Stigma of Unemployment: When Joblessness leads to Being Jobless," will be as among several thousand research reports at the Academy of Managementannual meeting, to be held in Boston from August 5th through 7th. Founded in 1936, the Academy of Management is the largest organization in the world devoted to management research and teaching. It has some 19,000 members in 102 countries, including about 11,000 in the United States. This year's annual meeting will draw some 10,000 scholars and practitioners for sessions on a host of subjects relating to business strategy, organizational behavior, corporate governance, careers, human resources, technology development, and other management-related topics.