Recruitment, Job Chances and Work Barriers

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• Recruitment, Job Chances and Work Barriers
• - The Employer Perspective
• Jacob J. Pedersen
• jacobjp_at_socsci.aau.dk
• Department of Economics, Politics, and Public
  Administration
• Aalborg University
• 29.10.2007

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Plan for presentation - Interest - Existing
Research Theoretical Expectations - Data,
Research Design Research Questions - Empirical
Findings - Concluding Remarks
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Interest Recruitment and Unemployment

• Point of departure Two obvious statements
• At the same time as workers are looking for
  vacant job openings, companies are looking for
  workers to fill the vacant job openings
• Most vacant positions are filled after a process
  where the employers chose from a pool of
  applicants rather then applicants choosing from a
  pool of vacant positions (Barron, Bishop
  Dunkelberg 1985)
• Reflection
• It seems obvious that to understand the job
  match it is necessary to have a solid
  understanding of how and why companies recruit as
  they do. This can help us understand why some
  people easily get a job, while others are left in
  more or less chronic unemployment.

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Existing Research and Theoretical Expectations

• Both in active labour market policy and in
  research the main focus has been on the supply
  side.
• Since the 1960s there has been an interest in
  companies recruitment processes (see e.g. Rees
  1966, Rees Schultz 1970, Fernandez et al.
  2000). However limited research in this area in
  Denmark (with the exception of Csonka 1995, and
  Bjerregård Bach 1997)
• Main focus on describing recruitment processes
  and on securing recruitment processes that are in
  the companies best interest and less on how it
  affects unemployment.
• International research identified a number of
  advantage to informal recruitment (Rees 1966
  Rees Schultz 1970 Fernandez et al. 2000 )
• Cheap way of recruiting
• Reduces expenses in relation to screening and
  recruiting applicant
• Reduced training costs
• Reduced control cost
• Reduced costs in relation to turn-over
• It locates better qualified applicants
• It therefore seems that companies have an
  incentive not to make job information available
  for all

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• Gorter, Nijkamp Rietveld (1993) has shown that
  use of informal search channels reduce the chance
  that an unemployed will fill the vacant job
  opening.
• Lindeboom, Van Ours Renes (1994) has shown that
  advertisement and informal search are effective
  in matching vacant job openings with already
  employed workers. However public employment
  offices are effective in matching job opening
  with an unemployed.
• Companies act differently when there are low and
  high unemployment in society. Use of more diverse
  recruitment channels when low unemployment (Russo
  et al. 1997).
• Companies act differently when they are hiring
  low and high skilled labor. Typical they use more
  resources when hiring high skilled labour
  (Barron, Berger Black 1997).
• Statistical and taste discrimination will in some
  cases affect the outcome of the job match process
  (but it is hard to measure see e.g. Becker
  1957, Arrow 1973).

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Data and Research Design

• Survey register data
• Disko 4 Survey among private companies with more
  then 20 employees
• Combined with register data from Statistics
  Denmark. Information about the employees, the
  workplace and the company.
• Disproportional sample but weighed by company
  size and branch
• Limitations to the data
• No public companies not possible to compare
  recruitment in the public and the private sector
• Today only a sub sample (982 companies)
• Preliminary results
• Only preliminary results so far, but

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Research questions

• We can try an give some answers to
• Thru which channels does companies recruit new
  employees? Why do they use informal search
  channels? And does it differentiate across
  branch?
• How does companies view the job chances of ethnic
  unemployed, long-term unemployed and unemployed
  above the age of 50?
• Why does long term unemployment severely affect
  the chance of being successful in the job match
  process?

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How do the company typically post vacancies?
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Points

• Companies recruit through a number of different
  channels (which could also be expected in light
  of the low unemployment rate).
• Public recruitment channels are only used often
  by one out of four companies! Seems very low in a
  situation were many recruitment channels are in
  play, and were companies have trouble hiring.
• The most common recruitment channels are the ones
  that marginalized groups can be expected not to
  access. Newspapers, journals, Internet, and
  social network.
• Overall the most popular recruitment channels are
  the onesw that reduces the chance of hiring an
  unemployed.

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Recruitment in different branches
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Points

• There are differences in how companies in
  different branches recruit new employees. And
  therefore also different job chances for
  unemployed.
• The variation across branch are in some degree
  most likely the result of what labour type that
  is needed.
• Large companies use waiting lists and contact to
  former employees more then smaller companies.

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There can be a number of reasons for using
informal contacts (mouth to mouth method) when
hiring new staff. How significant are the factors
mentioned below?
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How would you judge the job possibilities for
these groups at your company?

• Three out of four sees limited or very limited
  possibilities for a long-term unemployed to get a
  job.
• Theoretical explanations?
• Deskilling-theory
• Lemon effect

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What are the most important risks with employing
unemployed with a long record of unemployment?
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Concluding remarks

• Different branches, different recruitment
  strategies. Further research needed into the
  cause (both quantitative and qualitative). A more
  detailed understanding of how different companies
  act in the recruiting process could be valuable
  information.
• The reasons for informal recruitment does not
  seem to be financial (as existing research
  stipulate). Its more a question of securing
  better applicants.
• Long-term unemployed has the worst odds (compared
  to ethnic groups and 50 unemployed). Not so much
  because of deskilling (as theory tells us) but
  more due to employers view of long term
  unemployed.

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Extra slide I What are the most important risks
with employing unemployed with ethnic
(not-Danish) background?
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Extra slide II What are the most important risks
with employing unemployed above 50 years?