Face to
Face
With Fred Coon
November 25, 2003 -
The "Unadvertised" Job Market is Back with a Vengeance! Recent Bureau of Labor Statistics reports
clearly indicate that even HR departments are now unaware of available jobs within their own companies.
Moreover, 60% of U.S. companies are not reporting all of their job openings.
At our November FEC Career Services staff meeting, my guest Jim Clark, an executive recruiter with the
Phoenix, AZ MRI office, and I were discussing issues of mutual interest that were impacting the recruiting
industry and the job market. Jim kindly shared the following article by John Sumser. It is a powerful
statement about what is not known about job openings available in today's job market. I have shared a few
thoughts that Jim and I had as well as the bulk of the article by John Sumser.
During the "dot-com" period of the late 90s and early 2000s, recruiters have been clearly aware of
impending labor shortages. 9-11-2001, the "dot-bomb" fiasco and the current unemployment rates hovering
around six percent most likely have changed the look of the job seeking population and, more importantly,
the nature of the available jobs.
When you first look at the charts provided by the Bureau of Labor Statistics, they might appear to be
contradictory in nature. According to John Sumser, "The Bureau of Labor Statistics does a great job of
tracking and analyzing the various changes in the domestic American workforce. In addition to unemployment
statistics, they cover a broad range of statistics about the economy. Their analysis of Job Openings and
their Labor Turnover Survey are really important and highlight a myth (hidden job market) that we thought
had been buried." What follows are John's thoughts.
The chart shows a very interesting trend. Over the past 2.5 years, employers have become less likely
to describe all of their hiring as "having job openings." In December 2000, employers were reporting
nearly all of their openings. However, in July 2003 only 60% of hiring transactions were described
as openings in the BLS survey.
The following graph shows the same data, expressed as the percentage of hires reported as openings.
The red trend line suggests that the likelihood that a new job will be reported as an opening continues
to fall. It's very clear that employers, in general, have lost their ability to plan effectively. Budget
conservatism and economic gloom, coupled with pressures to radically improve productivity (apparently)
lead to huge numbers of last minute hiring decisions. This chart can be seen as the degree to which
workforce planning is failing in organizations today.
From a job hunter's perspective, the so-called hidden job market, declared dead in the dot-com boom,
has reappeared with a vengeance. We have returned to a market in which a large minority (nearly half)
of all jobs are not advertised or even understood as openings by the HR department.
Across the board, users of Applicant Tracking Systems must be experiencing pure chaos. The BLS
data suggests that a huge number of hiring decisions are being made on the fly and outside of the
bounds of the system. From a human perspective, it's a very understandable response to global events,
layoffs, outsourcing and economic uncertainty. From a management perspective, it's a nightmare. There
is no way that any ATS could be used effectively in these circumstances.
We believe that Job Board revenues and transaction volumes are probably directly related to the level
at which employers say that they have openings to fill. If our analysis is correct (and we're pretty
sure it is), Job Boards are leaving huge dollars on the table."
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About the Author: Fred Coon
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