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  • 2021
  • Working Paper

Hunting for Talent: Firm-driven Labor Market Search in the United States

By: Rembrand Koning, Sharique Hasan and Ines Black
  • Format:Print
  • | Language:English
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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; Referrals; Outbound Recruiting; Labor Markets; Selection and Staffing; Networks; Recruitment; Strategy; United States

Citation

Koning, Rembrand, Sharique Hasan, and Ines Black. "Hunting for Talent: Firm-driven Labor Market Search in the United States." SSRN Working Paper Series, No. 3576498, September 2021.
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About The Author

Rembrand M. Koning

Strategy
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