The Growing Spectacle of Job Lotteries


What happens when business no longer hires based on the knowledge, skills and abilities of applicants but, instead, distributes jobs through de facto lotteries?

 

joblotteries400My biggest concern about the future of professional/managerial recruiting is that knowledge, skills and ability (so called “KSA’s”) will change to accommodate the fact that more firms will hire through what could be called 'job lotteries' instead of traditional hiring. With traditional hiring there is at least an attempt to treat the applicant like a person. And there is some meaningful relationship between the KSA's needed for a job and the matching KSA's of the person hired.


But with job lotteries so many people are processed that the primary determinant of being hired is chance, not the KSA's any given applicant brings to the table. Arbitrary factors unrelated to KSA's might play the decisive role in who gets hired in a job lottery. The statistical basis for this claim relates to the Central Limit Theorem, which states that as a sample size (number of applicants) gets large enough, you can become increasingly confident that population characteristics (KSA’s) are fairly represented in your sample. One rule of thumb says that a sample size of just 30 is usually good enough. See:

 http://www.statisticalforecasting.com/central-limit-theorem.php


Job lotteries result in the commodification and depersonalization of applicants. I think that internet submission of resumes can contribute to this phenomenon. From the point of view of Game Theory (discussed elsewhere) it probably makes sense for a company to have as many applicants as possible. But there is an ethical dimension to this which becomes important when so many people apply for one position that the chance of being hired, regardless of your KSA's, is similar to the chance of winning a lottery.


I think companies should exercise some restraint and voluntarily impose time limits or applicant limits to prevent a job lottery type of situation from developing. Job lotteries waste the time of all applicants (except the 'winner'), demeans them, and distorts the process of matching the strengths of people with appropriate positions.


Companies that refuse to use discretion on this issue might be prohibited from advertising open positions in the classified sections. Instead, I would require that job lotteries be advertised where they belong: in the parts of the newspaper or online sites that refer to Bingo, pot luck suppers, and other games of chance.


As a tax accountant one interesting question for me is whether the cost of participating in a job lottery would qualify as a gambling expense, deductible to the extent of gambling income. See: http://www.irs.gov/taxtopics/tc419.html


Of course some job lotteries develop through no explicit fault of the company, and arise merely because a particular town or city is hit with very high unemployment and one position opens up. Yet even in these cases steps should be taken by the employer to prevent a job lottery from emerging.
See: http://abcnews.go.com/US/Economy/wireStory?id=7029793#


As the cost of processing and analyzing information continues to go down we should expect to see more job lotteries develop. Competition will intensify while the loyalty companies demand of their employees will remain the same. How much loyalty will companies show to their own workers? How much respect will companies show to future job applicants? Will the workers hired through these lotteries be valuable employees or mere mercenaries? Companies should be judged not only by how well they treat their own people, but by how well they handle the hiring process.

 

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George Adams
Certified Public Accountant Master of Business Administration
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