Hunting for talent: Firm-driven labor market search in the United States

77 Pages Posted: 9 May 2020 Last revised: 14 Sep 2021

See all articles by Ines Black

Ines Black

Duke University - Fuqua School of Business

Sharique Hasan

Duke University - Fuqua School of Business

Rembrand Koning

Harvard University - Business School (HBS)

Date Written: April 15, 2020

Abstract

This article analyzes the phenomenon of firm-driven labor market search—or outbound recruiting—where recruiters are increasingly “hunting for talent” rather than passively relying on workers to search for and apply to job vacancies. Our research methodology leverages three approaches. We first develop a labor market model that incorporates firm-driven search and then derive the equilibrium conditions under which firms use outbound recruiting and study its effect on hiring strategy, performance, and worker outcomes. We then test our model’s predictions using two data sources representing worker outcomes and firm choices. First, data from a nationality representative survey of 13,000 US workers shows that the percentage of workers hired through recruiting has increased from 4.2% in 1991 to 17.8% in 2020. This share is larger for higher-skilled workers, those with online profiles on LinkedIn, and those employed in high-technology hubs (e.g., Silicon Valley). We complement this analysis with data on the near universe of online job postings from 2010 to 2020. Here, we find that firms, especially those that need high-skilled workers, are hiring more recruiters with significant skill in scouring the internet for passive candidates. Indeed, demand for such recruiters has tripled over the past decade. A key implication of our model and findings is that outbound recruiting is most beneficial for firms that have higher skill demands, and at the margin, may shift firms to seek out higher-skilled workers.

Keywords: Hiring, Networks, Referrals, Strategy, Outbound Recruiting, Labor Markets

Suggested Citation

Black, Ines and Hasan, Sharique and Koning, Rembrand, Hunting for talent: Firm-driven labor market search in the United States (April 15, 2020). Available at SSRN: https://ssrn.com/abstract=3576498 or http://dx.doi.org/10.2139/ssrn.3576498

Ines Black

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Sharique Hasan (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Rembrand Koning

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Boston, MA 02163
United States

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