Hiring fallacies adding to displaced PMETs’ woes

I refer to the The Big Read article “Despite help, displaced PMETs find the ‘perfect cocktail’ to a new career elusive” (July 16).

While reskilling, relearning and lowering salary expectations are emphasised as the conditions of getting back in the game, the problem of market failure aggravating the situation cannot be ruled out.

Better-qualified older professionals, managers, executives or technicians (PMETs) have been passed over because inferior younger candidates are cheaper and are assumed to be able to learn fast.

The belief that younger, cheaper workers will be equivalent to experienced workers in due course, in terms of competencies and contribution, is not self-evident. This can be a red herring for hiring managers who are younger than senior job applicants.

The real reason could be that these managers do not feel comfortable managing workers who are more experienced than them. Another reason could be that firms making hiring decisions see the cost but not the benefit.

This is a market failure because an efficient allocation of economic resources did not occur — the most suitable applicant was not hired.

When this happens on a large scale, with thousands of unemployed PMETs, it is a misallocation of resources within the economy.

This should not be seen solely as structural unemployment, as the older PMETs have the appropriate skills, are superior and would have been more productive had they been hired.

They could create more economic value per dollar spent by employers, but are not hired, while less productive but younger workers are.

So besides retraining and helping unemployed PMETs learn new skills, the authorities should look at policy measures to address this market failure. This can only be good for the economy, firms and displaced PMETs.