Why Companies Hire Only People Who Already Have a Job

By Stephen Bucaro

One thing that's keeping the unemployment rate high today is that companies want to hire only people who already have a job. Some companies are even bold enough to state in their help wanted ads "unemployed need not apply". Why do many companies only want to hire people who already have a job, and how do you overcome that bias?

1. Normally when a company fires someone, they need a good reason, otherwise they can get sewed for wrongful termination. When the stock market crash and massive layoffs occurred in late 2007, no one was asking questions about why people were fired. It was obviously because of the recession. Companies took advantage of that opportunity to dump their dead weight employees. So a company looking to hire assumes that if you were one of those that was laid off, you're an undesirable.

2. If you're a salesperson, you have valuable customer contacts and market knowledge. But when you're out of work for a while, those contacts go away, and that market knowledge becomes outdated. When a company hires a salesperson, that salesperson's customer contacts and market knowledge comes as part of the package. Companies don't get that valuable asset when they hire someone who is unemployed.

Similarly, if you're in a technical or skilled field, you have valuable knowledge of the latest products and techniques in your field. When a company hires a technical or skilled person, that person's knowledge of the latest products and techniques comes as part of the package. When you're out of work for a while, that knowledge becomes outdated. Companies get a better value when they hire someone who is currently employed.

3. Companies believe that people who have been unemployed for a while are demoralized and pessimistic. They believe that people who have been unemployed for a while have been sitting around watching TV and getting soft, unable to survive the fast pace of post-recession of business. Companies want to hire only people who are energetic with a positive, optimistic attitude.

These are the reasons many companies only hire people who already have a job. It's difficult to overcome this bias, or even just get an interview, if you're currently unemployed. You need to convince companies that you're up-to-date with the latest advances in your field. To do that join industry organizations and attend industry events. And you need to highlight any further training or education that you've attained while unemployed. You need to convince employers that, when they hire you, they're getting valuable industry knowledge as part of the package. They're not just getting a warm body.

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