Changing Search Equilibrium in the Labor Market
Tyler Cowen sends us to the Economist:
Recruitment firms: Joining the queue: The recession has accelerated big changes for firms that help people find jobs: “IN 2008 10m people came to us, and we placed 4m in jobs. In 2009 it was 11m, and we only placed around 3m. It’s been a tough year.” So says Jeff Joerres, the boss of Manpower, an employment-services firm best known for its army of temporary workers. The highest unemployment rates in decades have meant that more people than ever have turned to firms that specialise in finding people jobs. But at a time when firms are hiring far less, if at all, that can easily add up to more disappointed clients. One thing Manpower has got better at during the recession, says Mr Joerres, is figuring out quickly which job-hunters can be helped, and which to send elsewhere rather than risk leading them on. In the final quarter of 2009 Manpower’s profits were down by 62% from the same period a year earlier, on revenues that were 4% lower.... Monster, an online job-listing firm, posted a loss in the fourth quarter. Its shares, though up since last March, remain two-thirds lower than in February 2007, before the deterioration of the American economy became apparent. Even so, Sal Iannuzzi, Monster’s boss, is upbeat... his firm, like many in the industry, has made big changes to improve its prospects as the market recovers.... Monster has developed a search engine called 6Sense, which is designed to help recruiters screen out “aspirational applicants” (the spammers). It also allows recruiters to search for suitable candidates themselves....
Manpower is increasingly having to compete by finding new ways to help recruiters, helping them manage high-powered but short-lived projects, for example. Companies are putting together many more ad hoc teams often connected virtually around the world, notes Mr Joerres. “Perhaps only 20% of a team will be on the full-time staff,” he says, “so they need a much more on-demand talent spigot, which we can provide.” Recruiters are clearly becoming far more sophisticated, thanks to the new search tools that are available, says Aberdeen’s Mr Saba: “You’d think with 10% unemployment, jobs would be filled more quickly, but the focus on sourcing the right people, screening them and so on means that the time to fill has not fallen.” Mr Joerres believes that the increasing sophistication of recruiters means that firms will do less “anticipatory hiring” than in previous recoveries. Instead, firms will wait to get exactly the staff they need, when they need them...
Which would mean an even more jobless recovery...
