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Talent shortage? Maybe it’s your automated hiring system, lack of investment in training • The Register

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The alleged “talent shortage” depriving companies of workers can be attributed in part to corporate disinterest in paying for job training programs, and to automated recruitment systems that overlook potential hires, a research paper argues.

In a report [PDF] published over the weekend, “Hidden Workers: Untapped Talent,” authors Joseph Fuller and Manjari Raman, from Harvard Business School, and Eva Sage-Gavin and Kristen Hines, from Accenture, explore the disconnect between companies supposedly unable to find talent and “hidden workers” who don’t get considered for open positions.

“Hidden” in this context refers to those working less than full-time who want to work full-time, those who have been out of work for a long time, and those not working and not currently seeking jobs but who could be tempted back into the labor pool.

There are some 27 million hidden workers in the US alone, the authors estimate. And they suggest several reasons that these individuals don’t satisfy employer hunger for talent.

One reason is training. Rapid technological changes affecting many occupations have made it difficult for workers to learn desired skills and have left educational systems unprepared to respond. As a consequence, workers must be employed already to obtain the skills sought by employers.

A recent Brookings Institution report suggests that’s a problem arising largely from cost cutting in higher education funding and employer-paid and government-funded worker training, and from dwindling union membership, which reduces on-the-job training and worker protections.

Writer Andrew Yamakawa Elrod made this point in his recent analysis of the labor shortage in the construction industry.

“One consequence is the erosion of occupation-specific apprenticeship programs – funded by employers and administered jointly with unions – that once renewed the industry’s pool of skilled labor,” he wrote in an online article published last month. “As industry veteran [Mark] Erlich explains, ‘The nonunion sector has never figured out a pipeline for training for bringing people into the industry.'”

And as Elrod goes on to note, the gig economy has made it so there’s “no need for companies to internalize the costs of wages or social insurance – much less education and training.”

The curse of HR software

The second reason is that automated recruitment and resume filtering systems exclude too many workers.

Applicant Tracking Systems (ATS), which manage the job application pipeline, and Recruiting Management/Marketing Systems (RMS), which help support and automate work for recruiters, are widely used in companies. More than 90 per cent of employers surveyed for the report said they use their RMS to filter or rank potential middle-skills or high-skills candidates.

Yet these systems use specific data points in inefficient ways – treating a college degree as a proxy for a desired trait like work ethic, for example, or using a gap in employment to automatically reject potential workers – thereby reducing the applicant pool unnecessarily.

“As a result, [these systems] exclude from consideration viable candidates whose resumes do not match the criteria but who could perform at a high level with training,” the report says.

“A large majority (88 per cent) of employers agree, telling us that qualified high-skills candidates are vetted out of the process because they do not match the exact criteria established by the job description. That number rose to 94 per cent in the case of middle-skills workers.”

… qualified high-skills candidates are vetted out of the process because they do not match the exact criteria established by the job description

In other words, these systems appear to be set up to minimize the workload of recruiters and hiring managers by excluding marginally less qualified job seekers rather than to maximize the supply of potential job applicants.

A third reason that hidden workers get overlooked is when companies choose to consider this group is that they tend to do so halfheartedly through corporate social responsibility programs, as if it were “an act of charity or corporate citizenship, rather than a source of competitive advantage.”

The authors argue hidden workers represent an untapped asset. They say firms open to hiring overlooked and arbitrarily disqualified job seekers report being 36 per cent less likely to face talent shortages than companies that ignore hidden workers. What’s more, these companies say hidden workers “outperform their peers materially on six key evaluative criteria — attitude and work ethic, productivity, quality of work, engagement, attendance, and innovation”

The report suggests several possible ways to make hidden workers more obvious: re-evaluating job descriptions regularly rather than piling new skills and requirements onto existing qualifications; switching from “negative” filters in ATS/RMS systems designed to thin the applicant pool to “affirmative” ones that bring in a broader range of experiences; and creating new hiring metrics that focus on time to productivity, attribution rate, and advancement rate rather than expense minimization.

Not mentioned in the report is whether lack of wage growth for non-executives has dissuaded prospective job applicants from participating in the labor market. According to the Economic Policy Institute, a progressive think tank, CEO compensation grew 1,322 per cent between 1978 and 2019 while worker compensation grew only 18 per cent between 1978 and 2020.

As McSweeney’s, a satirical literary publication, recently put it, “We will do anything to get you to work for us except pay you enough.” ®

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Big tech’s pro-climate rhetoric is not matched by policy action, report finds | Environment

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The world’s biggest tech companies are coming out with bold commitments to tackle their climate impact but when it comes to using their corporate muscle to advocate for stronger climate policies, their engagement is almost nonexistent, according to a new report.

Apple, Amazon, Alphabet (Google’s parent company), Facebook and Microsoft poured about $65m into lobbying in 2020, but an average of only 6% of their lobbying activity between July 2020 and June 2021 was related to climate policy, according to an analysis from the thinktank InfluenceMap, which tracked companies’ self-reported lobbying on federal legislation.

The report also sought to capture tech companies’ overall engagement with climate policy by analyzing activities including their top-level communications as well as lobbying on specific legislation. It found that climate-related engagement levels of three of the five companies – Amazon, Alphabet and Microsoft – had declined compared to the previous year.

Tech companies, which have some of the deepest pockets in corporate America, have been racing to come out with increasingly ambitious climate pledges. Amazon has a target to be net zero by 2040 and to power its operations with 100% renewable energy by 2025, and Facebook has a target of net zero emissions for its entire supply chain by 2030.

In 2020, Microsoft pledged to become carbon negative by 2030 and by 2050 to have removed all the carbon the company has ever emitted. Apple has committed to become carbon neutral across its whole supply chain by 2030.

And Google has pledged to power its operations with 100% carbon-free energy by 2030, without using renewable certificates to offset any fossil-generated power. “The science is clear, we have until 2030 to chart a sustainable course for our planet or face the worst consequences of climate change,” the Google and Alphabet CEO, Sundar Pichai, said in a video announcing the policy.

Yet this strong pro-climate rhetoric is not being matched by action at a policy level, according to the report. “These gigantic companies that completely dominate the stock market are not really deploying that political capital at all,” said the InfluenceMap executive director, Dylan Tanner.

Tech companies have not been entirely silent. Apple, for example, has expressed support for the Biden administration’s proposed clean energy standard, which aims for all US-generated electricity to be renewable by 2035.

But these efforts are significantly outweighed by those of big oil and gas companies, which have ramped up their climate lobbying over the same timeframe, according to the report. “Most of their political advocacy is devoted to climate change and it’s negative,” said Tanner.

A lack of engagement is especially disappointing given the new momentum around climate action under the Biden administration, said Bill Weihl, a former Facebook and Google sustainability executive and now executive director of Climate Voice, which mobilizes tech workers to lobby their companies on climate action. “The dominant business voice on these issues is advocating against the kind of policies that we need,” he said.

Joe Biden’s $3.5tn budget reconciliation bill, which includes large investments for climate action, is facing fierce opposition from some industry groups. The US Chamber of Commerce, the country’s most powerful business lobbying group, has said it will “do everything we can to prevent this tax raising, job killing reconciliation bill from becoming law”. All of the tech companies, with the exception of Apple, are members of the Chamber.

“Our best chance to lead the planet to safety in the race against climate change is through this reconciliation bill, yet InfluenceMap has shown that big tech is still MIA on climate in Congress,” said Senator Sheldon Whitehouse, a Rhode Island Democrat and longtime advocate for climate legislation.

Microsoft and Apple declined to comment on the report and Alphabet did not respond to requests for comment. A spokesperson for Amazon said the company engages at local, state and international levels to “actively advocate for policies that promote clean energy, increase access to renewable electricity, and decarbonize the transportation system”.

A Facebook spokesperson said “we’re committed to fighting climate change and are taking substantive steps without waiting for any legislative action”, adding that the company supports the Paris climate agreement goals and helped found the Renewable Energy Buyers Alliance.

But these actions are not enough given the scale of the crisis, said Tanner. The UN warned in a report published on Friday that even if current climate emissions targets are met, the world is still on a “catastrophic pathway” for 2.7C of heating by the end of the century. “We’re running out of time,” Tanner said, “physically on climate but also on a public policy level.”

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Some of you have dirty green credentials • The Register

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TechUK – the UK’s digital trade association representing computer giants and start-ups alike – has called on firms to check their green credentials and make sure they stand up to scrutiny.

The warning comes as UK businesses were told to brush up on their eco-claims or risk public humiliation and enforcement action by the Competition and Markets Authority (CMA).

Businesses have until the New Year to make sure their environmental claims – such as those regarding energy consumption, packaging, recycling, and product lifecycle assessments – comply with the law and are not simply an exercise in greenwashing.

As part of its efforts to steer companies, the CMA has published a six-point Green Claims Code in a bid to make it clear that anyone spouting eco-friendly claims “must not omit or hide important information” and “must consider the full life cycle of the product.”

The CMA is targeting sectors that some onlookers may regard as low hanging fruit including textiles and fashion, energy-hungry travel and transport, and fast-moving consumer goods.

However, any sector and the companies that operate within it – including tech – could fall within the CMA’s crosshairs.

In a statement, Andrea Coscelli, chief exec of the CMA, said: “We’re concerned that too many businesses are falsely taking credit for being green, while genuinely eco-friendly firms don’t get the recognition they deserve. Any business that fails to comply with the law risks damaging its reputation with customers and could face action from the CMA.”

However, there are worries the new rules may lead to confusion. In its evidence to the CMA, techUK said the six principles set out in the guidance were “not specific enough” and also called for more information to help tech firms. It also warned that different variables made in lifecycle assessments could lead to misleading results [PDF].

In a statement, Susanne Baker, associate director for Climate, Environment and Sustainability, techUK, told us: “The CMA’s guidance is important for any company making a green claim about their services, products and company. With more green claims being made by the tech sector than ever before, it’s absolutely vital that these aren’t deemed to be greenwashing.

“Firms have until the new year to address this and will need to think carefully about any green claim they make, be sure they can substantiate them, that they aren’t misleading, and are truthful and accurate,” she said.

The CMA announced that it was investigating the impact of green marketing on consumers last year when it found that 40 per cent of green claims made online could be misleading – suggesting that thousands of businesses could be breaking the law.

In June, The Register reported how a shortage of plastics – rather than a desire to protect the planet — could be one reason why recycled plastics may be working their way into laptops and other gadgetry.

Amazon recently found itself fending off a whistle-blower’s claims alleging it dumped unsold goods to landfill, and later bragged that it had achieved lower carbon “intensity” in its business practices. The latter claim was shot down by an unimpressed scientist close to The Reg who remarked that the fact Amazon’s business was growing was not “helpful to Earth”, and the fact it polluted less per unit of activity didn’t change the bottom line “which is that they are polluting more this year than they did last year.”

Meanwhile, Tesla CEO Elon Musk recently announced the electric car maker will stop accepting Bitcoin payments for its vehicles, due to the “increasing use” of fossil fuels, particularly coal, to support Bitcoin’s electricity-hungry mining and transaction processing.

An Intel sponsored report by non-profit Resilience First, highlighted in June the role of tech in reaching net-zero carbon emission goals. However, making chips has been a dirty business, with a 2002 study concluding that a single 2g semiconductor chip required a whopping 1.6kg of secondary fossil fuels and 72g of chemical inputs to be put into production. ®

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Fivetran nears five times its unicorn valuation as it plans further growth

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The data integration business growing its EMEA HQ in Dublin is set for further expansion following a $5.6bn valuation and key acquisition.

Silicon Valley-headquartered Fivetran has announced $565m in Series D funding alongside a deal to acquire HVR.

This latest funding round sees the automated data integration provider’s value reach $5.6bn just over a year after it first reached unicorn status.

The funding round from new and existing investors included General Catalyst, CEAS Investments and Matrix Partners. Andreessen Horowitz led the round, which also brought in new investors Iconiq Capital, D1 Capital Partners and YC Continuity.

In total, Fivetran has raised $730m to date. And in tandem with its Series D funding round, the company also announced a $700m cash and stock deal to acquire data replication business HVR.

‘Without an always-on, accurate and reliable way to centralise data, global organisations aren’t maximising the use of data or data infrastructure’
– MARTIN CASADO, A16Z

For Fivetran’s mission to help businesses make use of the data they have, in a way that is quicker and requires fewer resources, HVR brings database replication performance along with enterprise-grade security.

“HVR is a recognised leader for enterprise database replication and shares our same vision – to make access to data as simple and reliable as electricity,” said Fivetran CEO George Fraser. “Their product is the perfect complement to our automated data integration technology and will be instrumental for us to help enterprise organisations that want to improve their analytics with a modern data stack.”

Fraser added that the latest injection of funding from investors will enable the company to expand its capabilities and accelerate its global growth.

Fivetran established its EMEA HQ in Dublin in 2018. The following year, fresh investment saw the company plan to double its Irish workforce. Last summer, a $100m funding round saw these expansion plans furthered.

In terms of market opportunity, Andreessen Horowitz general partner Martin Casado says Fivetran is a “critical component” of the modern data stack, which represents “a paradigm shift for global enterprises, with billions of dollars of revenue at stake”.

“Without an always-on, accurate and reliable way to centralise data, global organisations aren’t maximising the use of data or data infrastructure,” said Casado.

The acquisition deal has been approved by the boards of both companies and is expected to close in early October, subject to regular approvals.

Customers from both companies are expected to benefit from each of the business offerings. On the side of Fivetran, this client list includes Autodesk, DocuSign, Forever 21, Lionsgate and Square, while HVR services dozens of Fortune 500 brands.

“Combining HVR and Fivetran will enable a next-generation solution that will better inform business decisions by providing the freshest data available,” said HVR CEO Anthony Brooks-Williams.

“We’re thrilled to be joining forces with Fivetran and look forward to what this incredible opportunity will provide for our growing team, partners and customers.”

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