We do not have a talent shortage, we have a hiring system problem

This picture is from the 2016 Venture for Canada Fellow Training Camp.

If you have ever posted a role and felt buried, or applied and felt invisible, it is not you. It is the ATS and resume screening model collapsing under AI driven volume.

We do not have a talent shortage. We have a hiring system that hides talent and then blames workers for the consequences.

Employers say they cannot find qualified candidates. Job seekers say they cannot get a fair look. Both are true. The issue is not a shortage of ability. The issue is a hiring process that wastes skill, then shows up later as weak productivity, higher employee turnover, and a miserable candidate experience.

What broke in the modern recruitment process

A huge share of recruiting now runs through online job boards and an applicant tracking system, usually called an ATS. Long before AI in recruiting became mainstream, the system was already strained. AI tools simply made it easier for candidates to apply at scale, and that pushed high volume hiring over the edge.

Once mass applying became effortless, the old resume screening model collapsed under its own weight. A single posting can attract hundreds or thousands of applications in days. Many look similar because people use the same tools to match the same keywords.

A hiring manager opens their ATS and sees 1,000 resumes for one junior role. They have fifteen minutes between meetings. They skim a handful, search for familiar school names, lean on referrals, then move on.

Most hiring today is not talent acquisition, it is spam filtering.

Why resume screening and ATS filters create hiring bias

When the pile is that big, hiring becomes a game of shortcuts.

First shortcut, referrals. They shrink the pile instantly.

Second shortcut, automated screening tools inside the ATS. They promise speed.

Both create a recruitment process built for convenience, not performance. Many systems try to match applicants to what past hires looked like. That bakes old assumptions into the selection process and quietly increases hiring bias. It also punishes candidates with unconventional backgrounds, career gaps, immigration stories, non traditional education, or lateral moves.

The hidden cost is lower productivity and worse job matching

Productivity improves when people land in roles where they can perform at a high level. When your hiring funnel filters for familiarity instead of competence, you get misallocation. Roles stay open longer. Teams carry skill gaps. Managers spend time rehiring instead of leading.

That is a productivity tax. It is also self inflicted.

The fix is skills based hiring

Skills based hiring is just evidence based hiring with a clearer name.

Stop guessing. Start measuring.

Instead of using resumes as the main gate, ask candidates early to complete a short job relevant work sample. Then score it with a consistent rubric.

Not a multi week take home project. Not unpaid consulting. A realistic exercise that takes about twenty to forty minutes.

This is what skills based recruitment looks like in practice.

• If you are hiring a policy analyst, ask for a one page briefing note.

• If you are hiring sales, run a simulated customer call.

• If you are hiring operations, give a messy process and ask for a diagnosis and a simple improvement plan.

• If you are hiring marketing, ask for a campaign brief with constraints, target audience, and success metrics.

Then do a structured interview with the highest performers, and use the resume as context, not as the gate.

The three layer hiring funnel that works

Most hiring funnels are backwards. They start with the noisiest signal, the resume, then they wonder why they miss great people.

A better funnel has three layers.

• Layer 1, Give every applicant the same short job simulation. Score it with a simple rubric.

• Layer 2, Interview the top performers. Ask the same core questions. Score answers consistently.

• Layer 3, Now look at background, experience, and credentials to add context and check for alignment.

Do not use them to decide who got a fair shot.

This approach does two things at once. It improves hiring quality, and it widens access, because unconventional candidates can demonstrate competence before the process filters them out.

What I saw at Venture for Canada

I saw this repeatedly while leading Venture for Canada, which has supported more than ten thousand young Canadians in starting their careers.

The pattern was consistent. Smart, capable people would apply for roles they could do, and they would never hear back. Not because they lacked ability, but because the hiring process never let them through. They lost to volume, credential proxies, and resume screening long before anyone looked at their work.

That is not a talent shortage. That is a broken selection process.

What employers should do

If you want to hire better, start small and make it real.

1. Choose one role you hire for often, design a short work sample that reflects the job.

2. Build a simple rubric with three to five criteria, score every candidate the same way.

3. Use the work sample score as your first screen, then use resumes to add context.

4. Use structured interviews, ask the same core questions, score answers consistently.

   
   

The bottom line

We are not short on talent. We are short on hiring systems that can recognize it.

Productivity will not improve until employers stop optimizing for resumes and start optimizing for real performance.

Are you selecting for competence, or are you selecting for familiarity?