More employers consider open-hiring strategy
Last year, The Body Shop, a global retailer that employs 2,000 people across North America, hired more than 200 seasonal hires for its distribution center. Candidates were just asked three questions: Are you authorized to work in the U.S.? Can you stand for up to eight hours? Can you lift over 50 pounds?
Anyone responding yes to all three questions was hired on the spot. No resumes needed. No high school degree. No background checks. No drug screening.
The company is defying tradition by embracing “open hiring,” a business model developed in 1982 by the Greyston Bakery in New York, which also supports the Center for Open Hiring to help other companies adopt its strategy. The idea is to help people find a job who lack a high school degree, served time in prison or face other employment barriers.
“We exist to fight for a fair and more beautiful world,” says Trish Patton, head of people, North America, at The Body Shop. “We got calls saying, ‘Are you really not doing drug screening and background checks?’ Then once the word got out, we filled all our requirements earlier than we normally would.”
This business model offers plenty of perks. In the past, the retailer partnered with several agencies to find temporary or seasonal workers. This time around, only one was needed. In 2018, the company conducted more than 1,200 traditional interviews, hiring 332 people. But last year, 719 candidates simply answered those same three questions, resulting in 208 hires. Surprisingly, the turnover rate among this group dropped by 60% when compared to seasonal workers the previous year.
However, this population sometimes needs a nudge or guidance. For example, when workers needed transportation, HR helped them set up a carpool. Since many had not worked for a long time, the retailer’s onboarding program also had to be modified to cover the basics, such as expectations around attendance.
Perhaps the biggest HR challenge with open hiring is selling the concept to senior leaders.
“That was a little bit hard for our leaders to get their head wrapped around,” Patton says. “This is something that you as an HR professional really have to support. You [need] persistence to keep going and, when someone sets up a roadblock, to tear it down.”
Meanwhile, she says, HR must challenge itself about biases and look deeper into job requirements, especially during this labor shortage. Are specific skills or a high school degree really needed for that job?
“This is my way of being an activist within my own little world of HR,” Patton says, adding that open hiring will also be applied at its retail stores this summer. “I have a once-in-a-lifetime opportunity to implement something like this where the company values it and sees it as a just thing to do … that increases social mobility within our own communities.”
Ideal for Many Positions
Although open hiring is uncommon in other countries, some technology companies in India are recruiting an entire class of college graduates. No questions asked.
“They’ve got such a need for talent that they’d rather hire everybody and let their performance-management system figure out who’s good and who’s bad,” says Brian Kropp, chief of research at Gartner’s HR practice. “They’ll find work for anybody regardless of skill level.”
Open hiring is also being practiced by fast-growing companies like call centers or those opening a warehouse, says Kropp, explaining that they need bodies and interchangeable skillsets to complete hundreds of different tasks.
Kropp says this business model works well for entry-level positions or jobs that can be performed with minimal in-house training. He highly recommends placing open hires on a probationary period so HR can assess their culture fit. Likewise, he says, HR must help managers understand that these workers reflect a broad range of skills, attitudes and mindsets and also adjust their supervisory approach as needed.
Looking ahead, open hiring may gain popularity if the labor market tightens up, he says, adding time to fill has increased by 30% since 2015.
What Works Best?
According to a survey commissioned by the National Association of Professional Background Screeners, 96% of employers conduct at least one type of background screening.
One major reason is liability, a key concern with open hiring, says Deirdre Macbeth, content director at WorldatWork.
HR can help mitigate risk by participating in the Federal Bonding Program, an insurance policy that protects employers who hire felons or ex-offenders. Although some open hires self-disclose their criminal past, she says, a criminal background check would still be required.
HR may also need to develop new initiatives, such as skills training, mentoring and team-building, and design new benefit programs to support open hires, says Macbeth, pointing to transportation benefits as an example.
“When any organization evaluates their hiring practice, it has to look at what’s important to the culture and training costs, impact and risk management,” says Macbeth. “Look at it holistically. Is this a good route to find more talent for the needs of the organization?”