According to a report published by the Harvard Business School today, automated hiring software is overlooking a lot of talent in the U.S.

The report states that millions of job candidates in the U.S. don’t even get a foot in the door, not because they are unqualified for a position, but because the software automatically rejects job applicants on bad or overly simplistic criteria.

It’s said that these days around 75% of employees in the country use such software, but that goes up to 99% for Fortune 500 companies. Although using technology to go through countless applications no doubt saves companies a lot of time, according to the researchers it’s leaving a worrying number of applicants on the shelf. They say this is now a crisis in the labor force.

“The irony that companies consistently bemoan their inability to find talent while millions remain on the fringes of the workforce led us to seek an explanation,” said the authors of the report. They added that some 27 million workers in the U.S. remain “hidden” because of the software, with Germany and U.K. also having a similar problem.

One of the major reasons why a company might miss out on a perhaps spectacular candidate is simply because they have been “missing from the workforce,” meaning they haven’t been employed or looking for work for a certain period of time. That could mean applicants taking time out to write a book or missing work for a pregnancy.

As was stated in the Wall Street Journal today, some applicants have been turned down for not having “computer programming” qualifications when the job at hand was simple data inputting. Other companies have seen the error of their ways. IBM Corp. told the Journal that it stopped adding college degree requirements to jobs when they weren’t explicitly needed. “Strategically, our point of view was if you have the skills why should it matter how you got them?” said the company.

Nonetheless, a large number of applicants don’t get their foot in the door because they don’t have traditional qualifications, even if the job is hardly rocket science or the applicant is a brilliant autodidact. This is reminiscent of a tagline in a British comedy sketch series that satirizes automation in the workplace: “Computer says no” is the response when a human should know better.

What’s perhaps surprising is that nine out of 10 executives who were interviewed by the researchers said they were well aware that automated systems were denying many good candidates from having an interview. Some said this was a matter of concern and something they wanted to change, although according to the researchers, it might take overhauling the entire hiring system.

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