“Wanted: smart, creative, dedicated individual to design efficient system that matches companies’ job listings with people looking for work. Contact the HR industry.”

It’s a tough assignment. On the one hand are job seekers who submit hundreds of applications online with little effort, but also with little hope of receiving a response. On the other hand are companies, inundated with resumes, that resort to blunt-edged tracking systems to quickly weed out candidates, including potentially qualified ones who don’t conform to established criteria.

It’s not surprising, then, that the process can be frustrating for both sides. As Wharton management professor Peter Cappelli notes, “Applicant tracking software makes it almost impossible for [a job candidate] to stand out, at least at the initial screening step. It is a binary process” — requiring yes/no answers — “based on searching for key words associated with credentials and experience. If you learned Java programming in Antarctica, it is no better than learning it in your local community college from the perspective of the software.”

In addition, says Cappelli, the fact that “there is virtually no feedback from these systems” on the part of employers “makes applicants feel helpless. They don’t know what it means not to hear back. If they are rejected, they don’t know why. It can easily seem random.” Or, as one job applicant recently put it: Sending out resumes is like “throwing paper airplanes into the galaxy…. they seem to go into a big, black hole.”

As for companies, “they have been a victim of their own success in using social media tools” to advertise their job listings, notes Christopher Ellehuus, managing director of the Corporate Executive Board (CEB), an Arlington, Va.-based research and advisory services firm. “They built a bigger pipeline than they need,” which ends up drawing applications from far too many unqualified candidates. “Now these companies are paying the price of having to sift through them all.”

For Job Seekers: ‘Broken’ from the Beginning

According to Gerry Crispin, co-founder of CareerXroads, an international consulting firm focused on recruiting technology and staffing strategy, the hiring process “has pretty much been broken from the candidates’ perspective” for decades. Back in the 1970s and 1980s, he says, many companies believed that the process should include informing applicants when their applications were completed and also notifying them when the job had been filled. In an effort to determine whether this still holds true, Crispin and his partner every year apply, under assumed names, to positions listed by employers of the “Fortune 100 Best Companies to Work For” list. In 2011, 27 of those companies informed Crispin or his partner when the job was filled, which means that 73 of the companies didn’t. 

Why not? After all, as Crispin notes, “almost all companies have the capacity to search for every applicant and send each one an email response in literally 90 seconds…. The problem is partly laziness. They have built systems, but failed to tag these kinds of issues.”

Last year, Crispin and two others formed The Talent Board, a non-profit foundation focused on recognizing companies that provide job applicants with an “elevated” — i.e., positive — application experience. As part of the effort, the Board announced the start of annual Candidate Experience Awards, which are determined by surveys and interviews with both employers and job candidates. Fifty-eight corporations applied for the award, and more than 11,500 candidate surveys were collected in the process.

About 20% of those candidates who were finalists for jobs “said they were ignored by the company” during the application process, says Crispin. “So even among the finalists, we see this loss of connection to corporations that have not felt it necessary to engage the applicants.” And that, Crispin notes, can have consequences. “In these days of social media, consider a retail firm that has 100 applicants for every opening. It interviews maybe four or five candidates. It hires one but ignores the [other 95]. What is the likelihood that some of those left hanging will stop buying their products” and tell their friends to do the same? “Companies are beginning to calculate the cost of poor candidate experience.”  

If large corporations continue to treat applicants poorly, “then the best and the brightest might spurn them as well,” suggests Crispin. “I think an increasing percentage of these people are saying they don’t want to work for big companies, but [would prefer] a startup or a small company. How we treat people — from the moment they start thinking about applying to a company — matters.”

One caveat to discussions of job hiring etiquette, according to Wharton management professor Iwan Barankay, is that companies have “strong legal limitations on what they can say.” A concern that job candidates might file lawsuits claiming discrimination in hiring means that companies “tend to give only very general feedback. That isn’t going to change,” he says. “If applicants want to know why things didn’t work out for them, the obvious answer is that other candidates were better qualified. If you get the job — that’s positive feedback.”

For Companies:  ‘Always a Bit of Luck’ Involved

According to a recent article in The Wall Street Journal, 7.6 million people applied to Starbucks for 65,000 corporate and retail job openings during the past year; close to one million people applied to Procter & Gamble for 2,000 positions, and two million people applied to Google for 7,000 openings. Approximately 90% of big companies, the article adds, use applicant tracking systems to screen and rank job candidates. Research from CEB shows that only 35% of applicants meet the basic requirements of the job they have applied for.

Firms of all sizes find that the online application process can be daunting. Last year, when Jacobs/Wyper, a 28-person architecture firm in Philadelphia, posted two openings online for architects, they received 400 applications. A staff member screened each resume and made an initial selection based on certain criteria that were written into the job description, including specific experience with the types of projects the firm does (such as sophisticated research and manufacturing facilities and corporate offices); technical expertise in the software used by the firm for drafting, and location (the company only wanted to hire local people). “Essentially, we were looking for ways to de-select applicants,” says Jamie Wyper, one of the firm’s founders. “We narrowed the pool down to 12 and did telephone interviews, then selected four to come in and meet with various people in the office.”

The two architects they hired have worked out well, Wyper notes, but the process is “one of the most difficult tasks we have. Even after getting all the information we ask for, it’s still very hard to tell how good someone will be in an office setting. There is always a bit of luck in the process, although you try to reduce that element.”

In an economy like the current one, says Wharton management professor Matthew Bidwell, the hiring process clearly favors employers. “If you have thousands of applicants for every position, you can find somebody by using very blunt tools, because you feel you will get a great candidate no matter what. Yet companies that rely on this approach might unintentionally rule out” applicants whose expertise could benefit the company in unanticipated ways. For example, during years when the economy was booming, consulting firms often looked beyond the applicant pool of MBAs in order to hire PhDs from the sciences and humanities. But given the glut of people in the labor market now, “an employer doesn’t need to worry about finding people in slightly more unconventional professions,” states Bidwell. The downside is that “formulaic hiring” can result in a less creative workforce.

Bidwell also notes that the easier it becomes to apply for a job, “the more narrow minded and automated the screening of the CVs becomes.” If a company made the process harder, candidates then would only apply for those jobs they think they might get. “Universities charge an application fee [for students]. I’m not sure companies could do that. There would probably be a riot,” he says. Instead, companies could make the application very specific to their own organization. “The more questions an applicant has to think carefully about, the fewer applications he or she will have time to fill out.” 

Josh Bersin, head of Bersin & Associates, a human resources research and consulting firm based in Oakland, Calif., agrees. The most important task for employers looking to hire is to clarify “their employment brand,” he says. That means spelling out the job that is offered, the qualifications needed to fill it, and the company culture. Consider furniture retailer Ikea, for example, which is known for “a minimalist culture and [a focus on] the environment, good health, fitness, design and so forth.” A candidate for whom these values aren’t important would probably not apply there. In other words, Bersin says, “employers should make it really easy for a candidate to self select. They don’t want 200 resumes. They want 10 great ones.”

Already, adds CEB’s Ellehuus, employers are becoming “smarter in terms of using messages that not only attract applicants, but filter them.” Whereas in the past, companies might have described themselves as “the best place to work,” with “the most opportunities for growth,” they now are finding ways to differentiate their companies from others, focusing on facts that are more relevant to a specific job search.

For example, if a company says it typically hires only candidates with graduate degrees, or only those whose writing experience includes published articles in mainstream media, then some job applicants might opt out of applying.

Ellehuus also cites the use of “smart sourcing,” in which employers pull back from searching the mass market and focus instead on canvassing “internal employees, professional networks, job contracts where you work with third parties and even customers” in order to find leads to good candidates. “Companies can be smarter about where they leverage existing networks,” he says.

Meanwhile, Barankay offers another caveat, this time one that addresses the time-honored tradition of face-to-face interviews with job candidates. “The predictive power of interviews is low unless they are very structured, which includes asking all the candidates the same questions, and then grading and evaluating them the same way,” he says, adding that extensive research backs up this finding. “A freeform interview where you just meander along in a conversation doesn’t reveal any important information.” 

Getting Connected

Even in a down economy, companies continue to hire, according to Bersin. “The turnover rate is about 15% to 20%, and that doesn’t change. It’s not that there aren’t any job openings; it’s that companies are hiring more slowly.”

Whether the economy is roaring ahead or limping along, HR experts and researchers say anyone looking for a job needs to do more than scan online sites and hit the “submit resume” button. Most companies have a recruiter and a hiring manager, says Bersin. The recruiter is a screener. The hiring manager will make the actual decision. The job candidate’s goal is to “become so compelling to the recruiter that he or she gets through to the hiring manager.”

He advises candidates to make sure their resume addresses the “skills, capabilities and values of the company. If the company is passionate about customer service, an applicant should use the words ‘customer service’ in his or her resume. The resume searching software is not very smart, but it’s smart enough to compare phrases on the job descriptions and the resumes.” In addition, Bersin says, applicants for a particular job “should see if they know anyone who works there, talk to their friends, try to find a connection. The most valuable way to get a job is still through a referral.”

Crispin agrees, citing surveys he has done with companies about their reasons for hiring one applicant over another. This past year, he says, at least 28% of all hires came from employee referrals, although he suggests the number may be even higher. If a job applicant has someone in the company who is referring him or her, “that is huge. It’s a game changer.”

A recruiter has limited time to spend on each job application “because he or she may have 30 other jobs to fill,” Crispin adds. “I [as the recruiter] am looking at a screen, scrolling down and seeing line after line of data…. Those lines have a weight related to three criteria. And then a tag line comes up saying this person comes with an employee referral. That person goes right to the top. I can’t afford to ignore that referral.”

Monica McGrath, an adjunct management professor at Wharton, echoes the need for job seekers to use their network and “the network of their networks while job hunting. We don’t emphasize enough their importance.” A young person looking for a job in a retail store, for example, should go into the store, talk to salespeople, ask them who to contact about applying and so forth. “People are too embarrassed to do that, or they think it won’t lead to a job.” But face-to-face, or perhaps in-your-face, efforts can be effective. McGrath cites a newspaper article describing two recent college graduates dressed in business suits who stood near Philadelphia’s Benjamin Franklin bridge handing out their resumes. “I bet some employer driving over the bridge who saw these two decided to give them a shot,” she says.

For those who prefer not to advertise themselves in front of oncoming commuter traffic, professional networking sites are another way to keep connected. The best-known of these is LinkedIn, the nine-year-old business social networking site based in Mountain View, Calif., which counts more than 150 million registered users from around the world. LinkedIn allows these users to create their own professional profiles that can be accessed by others, and to develop a list of business contacts that they can invite others to join, among other features. Participants learn about jobs and business opportunities that are related to their own interests and experience.

Samantha Zupan is the corporate communications director at Glassdoor, a jobs and career company based in Sausalito, Calif., whose free site provides such data as job listings, company reviews and salary reports for about 150,000 companies. Zupan says Glassdoor just launched a new feature called “Inside Connection,” which encourages people to expand their network via Facebook. “We found that 70% of our users include work history in their Facebook pages,” she notes. “Inside Connection offers the ability to leverage that network so you can find out which of your friends, and friends of your friends, has recently worked at a company you are interested in.”  

As for the application process, Zupan advises focusing on possible key words. “It’s almost as if the phrase ‘key words’ has gotten a bad reputation,” she notes, “because everyone says you have to use them to beat the system.” She suggests viewing key words as good clues to what the company wants, and then incorporating these clues into resumes and cover letters. Beyond that, Zupan quotes a phrase from a well-known career expert: “Ingredient X is your brand.” It refers to “that certain something that makes you unique, that will be your selling point to the employer,” says Zupan. “It’s how you choose to promote yourself.”

The challenge of trying to stand out in a crowded field of applicants is a common one, notes Barankay, including in his own field of academia. “One solution that has been put forward for the academic market is to introduce a way for applicants to signal that they are particularly interested in one university versus another.” People applying to companies could take that same approach.

“Put yourself in the shoes of the employer,” says Barankay. The company is confronted not only with many qualified applicants, but also with applicants who look overqualified. Should employers take those applications seriously? Some recruiters probably wonder why such a candidate is applying to their company. “The problem arises when many companies feel that way, because then people may end up not getting any interviews at all. It’s called ‘unraveling.’ The whole market unravels; employers don’t get good people, and employees don’t get jobs because they failed to communicate properly.”

The solution, Barankay suggests, is for the applicants to find a way to “credibly signal to each company that they are very interested in this position. They are not just another applicant.”

In the academic job market, prospective assistant professors can send signals through a centralized system indicating the four universities they are most interested in. “Your first intuition would be that an applicant would just pick the top four universities in his or her field,” says Barankay. “But that is not what actually happens. Instead, you send a signal to a university you think will not take it seriously.” In other words, if you are sure that a university will look at your application, you don’t need to put them on your list of top choices.

Similarly, in the corporate world, “you don’t have to work hard [to get noticed] in those companies you think will take you seriously,” says Barankay. “You want to focus instead on those companies you are not certain will look at your file.” You do this by personalizing each application. “Find out who works there, what kind of work they do, what kind of people the company is looking for. The task is not to massage the ego of the recruitment committee, but to show that you did your homework and thought about how your profile matches what the company does.”

Time to Adapt

As the latest employment figures indicate, the job market for both employees and employers remains unsettled. On the up side, unemployment has declined to 8.3%, the fifth consecutive monthly drop, and the number of people seeking unemployment benefits is at its lowest point since March 2008. Furthermore, the economy grew at a relatively healthy annual rate of 3% in the fourth quarter 2011 compared to 1.8% in the preceding quarter.

Yet economists suggest that the lower unemployment rate ignores several trends. Fewer applicants are applying for jobs — 118 per job opening in the fourth quarter of 2011 compared to 187 per opening in fourth quarter of 2010 — but not necessarily because more people have found employment, says Ellehuus, citing CEB research. He points to two factors: More people have simply given up looking for a job, effectively taking themselves out of the active labor market; in addition, people have become “much more realistic over the last couple of years. The kind of ‘spray and pray’ approach we have seen during this recession, where people apply for jobs they are completely unqualified for,” occurs less frequently.

So what can employers and employees expect in the near future? Crispin suggests that the labor market will continue to evolve in new, sometimes unpredictable, ways. “Our economy is creating more complex jobs and destroying the simpler ones,” he says. Years ago, he adds, it was easier for people to find employment in companies where one could develop skills, get on-the-job training and then move up. “Now there are fewer and fewer opportunities available to help you showcase your qualifications.”

It is especially difficult for young people trying to get traction in a sluggish job market. College graduates working for $12 an hour in retail are becoming frustrated, Crispin says. “But some of them are also learning to adapt. With technology, it’s easier these days to start a company. Also, young people are going back to school in areas where there actually are job opportunities, such as health care, engineering, accounting. Then beyond that, there is your passion. If it’s animals, you learn veterinary medicine or related technical knowledge. If it’s art, you might get a master’s degree in art therapy. You can start to build skills in these areas and turn your passion into something professional.”

Bersin puts it another way. “As painful as looking for a job is, you do learn a lot about yourself and what’s out there. The most valuable thing you have is self awareness, and I think when people look for jobs, they become more self aware. They might have to adjust [their expectations], but they get smarter at figuring out what can work.” One good thing about a resume, Bersin adds, “is there is no right or wrong way to write it. It’s an opportunity to present yourself the way you want to be seen.”