Applicant Screening Practices at Korean Firms

Firms’ Problem in Applicant Screening

Employers traditionally inquire about qualities of applicants that have bearing on applicants’ expected job performance or dedication (Phelps, 1972; Light & Ureta, 1992; Cole et al. 2003). These depend on applicants’ cognitive as well as noncognitive skills (Heckman et al. 2006; Borghans et al. 2008). Noncognitive skills are particularly difficult for employers to assess. Some are unquantifiable, unlikely to be reported honestly, or even unknown to the applicants themselves (Barrick et al. 2001; Moy & Lam, 2004). Screening of applicants’ personal characteristics allows employers to infer applicants’ type more precisely. The extent of screening depends on how informative the surveyed characteristics are about applicants’ skills, and on composition of firms’ applicant pools, job skill requirements, duration of employment, and compensation structure (Hlasny, 2014).

In addition to the economic motivation for applicant screening, we may be concerned about its propriety vis-à-vis equal opportunity laws or norms. There are various standards of appropriateness for factors used in the screening of applicants (Arvey & Renz, 1992; Gilliland, 1993; Truxillo et al. 2004). Legality of recruiting practices and of the collected information is the minimal benchmark. Procedural justice would necessitate that recruiting practices be objective, consistent and not susceptible to personal biases, and done by multiple decision-makers who are professionals (Gilliland, 1995). Content-fairness would require that the applicants’ characteristics surveyed be legal, merit-based (in the power of applicants to affect), job-related, non-invasive to applicants’ privacy, and difficult to falsify or distort. Finally, outcome-fairness would require that the recruiting practices impact all protected groups of applicants similarly to the mainstream group, resulting in similar selection rates.

The aim of this study is not to assert that Korean employers’ screening of personal characteristics is inappropriate or discriminatory, but to merely identify patterns in employers’ use of personal information, match it to firms’ observable features, and report employers’ own justifications. Nevertheless, a brief review of the legality of screening questions is warranted.

All personal questions evaluated in this study are inappropriate under one or more standards of fairness. Their content is not merit-based or job-related, is invasive to applicants’ privacy, and requires subjective evaluation by HR officers or employers untrained in HR management. Moreover, applicants may lie on questions about their beliefs, habits, and backgrounds. Perhaps most importantly, when employers act on the collected information, these personal questions incidentally affect selection rates among different groups of applicants. The disadvantaged category may include even protected groups of workers, and so the relevant form of screening may be in direct violation of equal opportunity laws, which are typically concerned with outcome fairness. Under the current legislation and adopted labor treaties, Korean employers are prohibited from considering factors unrelated directly to performance in their treatment of workers. The Act on Equal Employment and Support for Work-Family Reconciliation, Section 2(1), defines discrimination as any “unfair measures by employers in the process of personnel recruitment and in the establishment of working conditions on the basis of gender, pregnancy, marriage or family status.” The Ministry of Employment and Labor (MOEL) and the National Human Rights Commission (NHRC) have attempted to curb firms’ screening practices. The MOEL (2007) put forth guidelines for appropriate recruiting practices, aiming to ensure equal opportunity at the initial stage of recruiting (referred to as the documents stage). The NHRC (2003b) analyzed application forms of 100 Korean employers who hired over fifty fulltime employees during 2002, and recommended that employers voluntarily remove personal questions that are not directly related to job performance.

Existing Understanding of Firms’ Problem in Recruiting

The existing studies have, for the most part, been limited to identifying discrimination in employment, and policy evaluation. They have focused on measuring the outcomes of recruitment rather than on understanding the search process itself. Surveys of employers’ job advertisements and application forms have been conducted in the United States (Jolly & Frierson, 1989), Canada (Saunders et al., 1992), Australia (Bennington & Wein, 2000), New Zealand (S. Harcourt & M. Harcourt, 2002; Harcourt et al., 2004; Harcourt et al., 2005a, 2005b), and China (Kuhn & Shen, 2009, 2013; Hlasny & Jiang, 2012; Hlasny, 2013). A common conclusion of these studies is that a substantial number of employers ask applicants about their illnesses and handicaps, and about their dependents, in violation of relevant laws and norms protecting vulnerable groups such as women and the elderly. The count of personal factors screened by various employers is surprisingly similar across Western and East Asian countries (Wallace et al. 2002; Hlasny, 2009).

In Korea, Park (1990), Lee (1994) and Lee et al. (2001) surveyed employers about their criteria in hiring and motivation for the criteria, with greatest focus placed on differences in hiring criteria by applicants’ gender. Hlasny (2011, 2012) analyzed application forms and recruiting criteria of large samples of firms, and inferred statistically the economic rationales for asking various personal questions. Regarding appropriateness of screening methods, Truxillo et al. (2004) reviewed various measures of selection fairness, and their implications for workers’ and firms’ outcomes. Studies surveyed by them indicated that recruiting practices do not affect workers’ performance on the job, and thus firms’ outcomes.

The importance of application form information in the hiring process

Human resource officers typically use information from the documents stage to infer candidates’ skills, motivation, personality, and job fit (Cole et al. 2003, 2007). Application forms are a major source of such information.³ According to the interviewed HR officers, personal background questions provide employers with the following four general sets of information: job-specific skills, obstacles to working effectively, ability to harmonize with the firm, and dedication to the firm. The first set of information sought relates to the needs of particular openings. For most jobs, employers look for candidates with problem-solving ability, creativity, passion for the job, leadership and pro-activeness. Some firms that ask more personal questions report that, among applicants with similar qualifications, they look for those with “well-rounded” backgrounds. In addition to these general characteristics, candidates should possess job-specific skills. Questions about eyesight and color blindness are important in precision occupations, and in laboratory and factory jobs. Ability to drink alcohol is desirable in jobs requiring frequent contact with clients and participation at receptions (Lee & Rowley, 2008, p. 162). According to one interviewee, even when personal questions pertain to only specific positions, firms with job-rotation or promotion systems may ask these questions to all applicants.

Regarding applicants’ appearance, interviewees differ in the importance they attribute to it. Refer to Table 1. On a 1-5 Likert scale, the mean reported importance is 2.86, slightly lower than the middle of the Likert range corresponding to medium importance. According to one HR officer, applicants’ appearance is important for front-office workers, secretaries, reporters and consultants, as their appearance helps to establish good impression and trust during interpersonal dealings. An applicant’s photograph carries different importance across firms too. The mean reported importance is 2.25. One interviewee, an HR department clerk, mentions that his office judges the reliability of the content of an application form by how trustworthy the applicant appears in his photograph. Another interviewee explained that the purpose of questions about applicants’ height and weight is to exclude outliers such as highly obese or short individuals. At his firm, the questions are not intended to identify superior applicants under some subjective standard of beauty. Physical traits are surveyed merely to sieve out outlying applicants. But he added, good appearance may still be an advantage when an applicant satisfies other prerequisites.

Some interviewees, however, say that appearance is evaluated only in person at the interview stage rather than from a photograph on an application form. This is because recruiters care about applicants’ looks in reality, but the limited features in applicants’ photographs do not reveal those. Four interviewees also mentioned that the photograph may affect an applicant’s outcome negatively if it is very different from the applicant’s true look.

The next type of information sought by recruiters concerns any physical obstacle or inconvenience that would prevent workers from working effectively. Questions about health status and chronic diseases help to evaluate this. Six out of fifteen firms in our sample ask male applicants about the reason for their discharge or exemption from military service. Also, five firms ask applicants to undertake a physical examination before getting officially hired. Their officers argue that physical examinations are important for their firms because certain diseases may harm workers’ own work, their coworkers, and the firm at large.

The third set of information ascertains applicants’ ability to fit in with the firm’s existing workforce. Most interviewees state that applicants should possess the ability to adjust to the specific needs and organizational structure in a firm, including the ability to harmonize with coworkers, submit to the culture of the organization, and contribute to it in the long term. Religion may be surveyed to screen out applicants with abnormal views, social skills, or needs from a job. Religion is also an indicator of a well-rounded personality, according to one HR officer. Employers only consider whether an applicant comes from one of the mainstream religions. If an applicant comes from another persuasion, he may hold abnormal views on certain subjects, which may hinder his ability to harmonize in the workplace.

Finally, as the fourth set of information, applicants’ financial status and the financial status of their parents indicate whether they would work for the firm in the longer term. According to one interviewee, poor employees have a higher tendency to move when they are offered a higher salary elsewhere. Another interviewee explained that applicants’ dwelling type indicates their fixed monthly expenditures, which affects their desired structure of compensation. Employees with rental housing allegedly need higher base salary to pay monthly wolsae rent, or principal and interest on chonsae housing deposits, so they seek jobs with a higher base salary than house-owners or those who live in their parents’ house. Marital status and family background proxy for applicants’ willingness to move for work. According to one employer who has branches in several provinces, and asks for addresses of applicants’ family members, and when an applicant’s spouse works in another province, this applicant would have a higher tendency to accept a job offer near the spouse’s home or workplace. Furthermore, workers’ productivity, regardless of gender, may suffer if they live far from their spouses.

The observed distribution of questions across firms’ application forms and firms’ justification for them appear to confirm that firms screen information systematically and hierarchically. Most firms screen factors that are more directly informative of applicants’ productivity or loyalty, and less intrusive, and only some firms continue on to screening less directly informative and more intrusive characteristics (Hlasny, 2014).

Our interviewees denied that screening using personal questions is discriminatory. One interviewee explained that personal information is more predictive of applicants’ productivity than standardized test scores. For example, whether an applicant lives 100km away from the firm has greater bearing on his productivity than a score of ten more points on the Test of English for International Communication (TOEIC). Personal questions are also allegedly intended to promote affirmative action. Applicants’ disability is allegedly surveyed to offer preferential treatment to disabled workers, in compliance with the Act for the Employment Promotion and Vocational Rehabilitation of Disabled Persons. Questions about religion, birthplace, military service or age may be asked to comply with the organization’s founding principles, or with legal age limits.

Applicant Screening at Different Types of Firms

Having evaluated the composition of firms’ application forms, we may start noting patterns between employers’ characteristics or broader human resource practices, and the number of personal questions asked. Figure 1 shows that more mature firms tend to ask more personal background questions than younger firms. This is consistent with prior anecdotal and statistical evidence of a positive relationship between the extent of applicant screening, and the age of firm’s current majority owner or founder (Hlasny, 2009). Both of these trends may be explained by inertia in firms’ responses to changing regulatory conditions and new laws. Figure 2 appears to confirm this conjecture. Employers who update their application forms more frequently, and are thus less susceptible to inertia, tend to ask fewer personal questions today.

Figure 1.

Firms’ type and year of incorporation, and the count of personal questions askedNote: Pearson correlation coefficient is -0.30.

Figure 2.

Firm type, update cycle of application forms, and the count of personal questions askedNote: ‘Not regularly’ denotes updating of application forms when the firm HR policy changes, when business partners request it, or on another arbitrary date (say, 2009 yearend).

Figure 1 indicates another interesting relationship – that between the firms’ ownership structure and the number of personal questions asked. Domestic firms tend to ask significantly more personal questions than multinational and foreign direct investment corporations. The latter firms are among the youngest in our sample. Hence, changing ownership structure across firm cohorts provides another account for why more established firms appear to ask more personal questions on application forms. For alternative explanations, or to explain why some firms update their applications more often than others, we would need to turn to conjectures about the business environment in which firms operate, about firm hierarchy and adaptability of firms’ management style, or about owners’ moral standards. Unfortunately, such information is unreliable or missing, and we have too few observations for different types of firm (various industries, local labor markets, firm organizational structures, founder personalities etc.) to draw reliable conclusions.

Industry does appear to be associated with the extent and type of applicant screening. Among the industries represented more heavily in our sample, manufacturing firms appear to ask more personal questions than financial and insurance firms. Manufacturers inquire about applicants’ birthplace, family background, and physical conditions more often than firms in other industries. Financial and insurance firms ask more about home ownership and religion. The only firm in our sample asking about the ability to drink alcohol is a publishing firm. These facts are consistent with a prediction that firms inquire about characteristics that have bearing on applicants’ performance on the job. Different requirements for skills across industries and types of firms give rise to different forms of screening. Because of small sample size, however, it is impossible to determine how important industry classification is in driving the observed pattern of screening practices across firms. Even among firms facing similar business conditions – industry, incorporation years and size – we observe quite diverse application forms. Differences in human- resource institutions, practices and attitudes at different firms may explain this. The following paragraphs explore the limited available evidence.

The Role of Human Resource Management

Two properties about recruiting practices that are relevant to this study and that notably vary across firms are frequency with which they update their application forms, and familiarity with discrimination laws reported by their HR officers. Figure 2 shows that employers updating their application forms more frequently tend to ask fewer personal questions. Difference in means of the number of questions between the annually (6 firms) and less-frequently updated application forms (7 firms) is highly statistically significant. Firms exhibiting inertia in responding to regulatory conditions are stuck with an older, larger set of personal questions today. Secondly, the observed inertia may reveal something about firms’ latent attitude toward application forms. Firms that assign greater importance to application forms, or their appropriateness, may keep them more up to date and more consistent with legislation.

Figure 3 provides more evidence on firms’ attitudes. Firms whose officers are allegedly familiar with discrimination laws are shown to ask fewer personal questions than other firms. The difference between the two group means – 1.5 and 4.3 – is highly statistically significant. The officers’ responses to why each personal question appears on their application form are equally interesting. The four officers who ostensibly believe that it is a firm’s right to know applicants’ personal background all work at firms asking many personal questions (black diamonds in Figure 3). Two other officers at firms asking many personal questions claim that information on application forms is not crucial to hiring decisions (black dots). We may interpret these trends in a number of ways. Firms with better informed HR departments may adopt less intrusive recruiting practices. Furthermore, employers who believe that they have the right to know applicants’ personal background tend to inquire about it, even if the benefit of the information is small. Alternatively, these responses may simply serve to rationalize firms’ observed behavior. Employers caught asking intrusive questions may claim that they lack knowledge of pertinent laws, believe that the questions are warranted, or claim that they don’t use the collected information to discriminate. Next, we turn to employers’ perceptions of the importance of personal questions.

Figure 3.

Interviewees’ familiarity with discrimination laws, importance of personal questions, and the count of personal questions asked

Some officers emphasize that they use personal information only at a later stage of recruitment, during interviews. They do not reject applicants in the documents stage based on their personal information. On the other hand, firms that do not ask personal questions report that they focus more on applicants’ skills and ability than on their personal background in all stages of recruitment. One plausible interpretation is that, in the use of personal information, the documents stage is representative of other stages of the overall recruitment process at firms. Firms asking personal questions on application forms use this information one way or another – in the documents stage or the interview stage – while firms with short application forms truly ignore personal information. Another possibility is that personal considerations taint the decisions in the interview stage at all firms, and the prevalence of personal questions on application forms is irrelevant to the eventual use of personal information. Officers’ responses may simply be evasive. Employers caught asking for personal information downplay its importance – at least in the documents stage – while firms who are not caught never acknowledge considering this information.

Figure 4 considers explicitly the importance that firms reportedly attribute to application forms. The importance of application forms in decision- making about applicants varies significantly across firms, from one to five on the 1-5 scale (mean 2.87). On average, those who report importance of three points higher tend to ask one personal question fewer. Higher reported importance of application forms is associated with higher frequency of updating of application forms at firms (white circles in Figure 4). Once again, this tendency may represent ex post rationalization by HR officers. Employers asking many personal questions may report lower importance of application forms to downplay the role of personal factors in recruiting.

Figure 4.

Update cycle and importance of application forms, and the count of personal questionsNote: Pearson correlation coefficient is -0.24.

Consequences of Screening on Workforce Composition

To independently evaluate the impact of firms’ recruiting practices on the composition of their workforce, Figures 5 and 6 plot the number of personal questions against the average continuous working years, and the gender ratio among the firms’ current workforce. HR officers claim that a primary reason for asking personal questions is to infer applicants’ expected tenure with the firm. However, Figure 5 shows that there is extremely weak correlation between the questions asked and workers’ tenure. Knowledge of applicants’ personal information does not appear to help predicting their long-term performance at the firm. Employers who ask 3-5 personal questions tend to have essentially the same average tenure among workers as employers asking 0-2 questions.⁴ A similar result was obtained for the relationship between the extent of screening and firms’ overall prosperity. The correlation between the number of questions in 2008, and firms’ net profit for 2009 is -0.32, suggesting at face value that expending resources on applicant screening may actually hurt firms. At the same time, Figure 6 shows that employers asking more personal questions tend to have a lower fraction of women (correlation -0.28) than employers asking fewer questions.

Figure 5.

Application-form update cycle, average employee tenure, and the count of personal questionsData source: Financial Supervisory Service.Note: Pearson correlation coefficient is +0.14.

Figure 6.

Firms’ gender ratio, and the count of personal questionsData source: Financial Supervisory Service.Note: Pearson correlation coefficient is -0.28.

On the face value, evidence in Figures 5 and 6 supports the allegation that firms’ screening practices contribute to discrimination in hiring even more than they affect quality of the hired workers, or firms’ overall performance. If we believe the causal interpretation of the figures, we may conclude that the employers, in attempting to sieve out high-turnover applicants, incidentally disqualify some protected groups of workers such as women. For every additional personal question asked, the predicted fraction of women falls by 36 percentage points.⁵

Returning to the standards of appropriateness (Arvey & Renz, 1992), the recruiting practices identified in this study may conform to the criterion of procedural justice, as the surveyed personal characteristics are objective and are evaluated by a professional team of HR officers. Most information collected by firms is dispassionate (with the exception of appearance surveyed from photographs or during interviews), not subject to interviewers’ interpretation and straightforward for applicants to measure and provide. The recruiting practices may, however, violate the legality and content-fairness criteria of appropriateness. Some of the questions asked by employers are in explicit violation of the Act on Equal Employment and Support for Work-Family Reconciliation (Article 7). Furthermore, many questions are not merit-based or sufficiently job-related, and are invasive to applicants’ privacy. To the extent that these recruiting practices result in the hiring of fewer women or other protected individuals, the practices may be in violation of outcome fairness. Unfortunately, reliable data at the level of individual applicants are missing.

Career, a Korean online recruiting portal, surveyed 1,016 applicants on their views about the appropriateness of questions on application form s.⁶ The results agree with our conclusion that applicant screening practices at Korean firms may be problematic in terms of both content and outcome fairness.