Hunting for talent: Firm-driven labor market search in the United States
70 Pages Posted: 9 May 2020 Last revised: 25 Jul 2022
Date Written: April 15, 2020
We analyze the phenomenon of firm-driven labor market search, where firms increasingly "hunt'" for talent rather than relying on workers to apply to vacancies. Our methodology leverages three approaches. We develop a model that incorporates firm-driven search and derive equilibrium conditions under which firms use this channel. We test our model's predictions using two data sources. Data from a nationally representative survey of 10,000 workers shows that the percentage hired through recruiting has increased from 4.9% in 1991, to 14.3% in 2022. This share is larger for higher-skilled workers and those with online profiles on LinkedIn. We complement this analysis with data on the near universe of online job postings from 2010 to 2020. We find that firms, especially those with high-skill demand, have increased by 50% the search for recruiters with the ability to scour the internet for passive candidates.
Keywords: Hiring, Networks, Referrals, Strategy, Outbound Recruiting, Labor Markets, Search and Match
JEL Classification: J24,J64,M12,M51
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