Many people in the financial world are puzzled by the modern labor market which refuses to conform with traditional models. The unemployment rate is low, employers are having a hard time filling slots, yet median wage increases have been sluggish and the percentage of working age people in the labor force is still at multi-decade lows.
Parents give job search advice to their children, who roll their eyes because it doesn’t seem to apply to the job market today at all. Boomers call Millennials lazy, while Millennials call Boomers greedy. Distance between generations seems almost as wide as that of the 1960’s, but for totally different reasons which seem difficult to explain.
The entire way the job market functions barely resembles that of 30 years ago, but it didn’t change overnight. The changes can be divided into sections, however, as a different primary catalyst shaped the system.
I. Mid 1990’s and prior: The age of the physical job search.
During this period, job searching had a very local factor. Job seekers would look through the classified ads, often in local newspapers, or would drive out to industrial and commercial centers and ask about openings and employment opportunities. Job applicants often sent out letters and resumes by mail in response to these ads as well. Employment offices in the college campuses played a large role for large corporations, who would seek employees from a fresh block of new grads. However, small businesses provided a large number of job opportunities with decent incomes, and labor unions were still a powerful force in the private sector.
The major concern at this time was big chains and corporations stomping out the small private stores. Small video rental stores all started to be replaced by The Warehouse and Blockbuster. Local hardware stores were being replaced by Home Depot and Lowe’s. Local bookstores lost out to Borders and Barnes & Noble. Local electronics stores (Remember Babbage’s?) lost to Circuit City, Comp USA and then Best Buy. Starbucks began to displace local coffee shops. The list goes on.
II. Late 90’s to mid 2000’s: The rise of the internet
The early internet was very different from that of today. No one knew how big it could get, or what problems could crop up, just that it’s potential was huge. AOL was the first platform to totally dominate the space. Other fairly early sites were My Space for social media and Monster for job search. These early sites were all drastically affected and lost out because of the first major problem that the open space created: Spam. People found their AOL email accounts bombarded with ads and scams, abandoned their accounts, and dissociated with AOL. MySpace became creepy, fast. Monster bombarded companies with resumes and job seekers with openings which were often out of date.
As companies continued to consolidate into larger entities, they also responded to the wave of spam by looking inward for job search and creating their own corporate job-search portals. Smaller businesses continued to use Monster to some extent, but they began to rely more on intermediaries (job hunters) to help them advertise and fill positions.
Meanwhile, the days of corporate power loomed ever larger and they began to win the fight against the private sector unions. Wal-Mart pulled into the grocery market as a staunchly anti-union power. First there were waves of anti-Wal Mart demonstrations, but they spread further. Then there were waves of strikes at the local grocery stores as pay and benefits were slashed to compete. The days of raising a family in a small apartment as a retail clerk came to an end. Right to work laws began to prevail in many states, and unions everywhere were under more intense pressure than ever.
The job market at this time was still fairly sound, and solutions were being found to help combat spam … spam filters in emails, along with the rise of personal networks by invitation started to form (Facebook for social media, LinkedIn for job search). As a job-seeker at this time I transferred from the Navy to a high paying temporary job for Hurricane Katrina work in less than two weeks, and from that to a career in commercial construction in less than 2 weeks. It was getting easy – tailor resumes and applications to a number of places, get a few interviews, and get a job offer. I suppose it was too good to be true.
III. Late 2000’s to mid 2010’s: The Great Recession
Two factors suddenly came to a head in the Great Recession, which drastically changed the nature of Job Search:
1. Companies were flooded with job applications and resumes like never before, for a relatively small number of openings.
2. Computers and the internet were seen as the ultimate tools to deal with problems.
By this time, the idea of “showing up” to commercial and industrial areas to ask about openings was completely unwelcome. People doing this would be shooed out – either semi-politely with statements of “apply at our website please” or more rudely with accusations of trespassing.
Companies responded to these problems in two major ways:
First, they began to use ever more arbitrary ways of cutting down applications. Jobs that never required college degrees would be filtered for college grads only. Then they’d filter out people who’d been unemployed more than a year. Then they’d filter out anyone without specific degrees or without specific industry experience.
Second, they began to add more steps to the job application process. They would look only for well-tailored resumes, ask essay questions, and require specific online forms (often with questions they could use to filter out applicants).
Job searches during this time were brutal. You would spend hours, sometimes days, applying to individual jobs only to have them filtered out in microseconds. You would go to job fairs hoping that face-to-face contact would help, and then just be told to apply online. Nothing seemed to work and yet people kept telling you to pour more and more time into these applications. You would often hear things like “what do you mean there’s no jobs – I just pulled up a search and there’s some here, here, here… It was very frustrating and de-humanizing. People felt utterly rejected by the system and found ways to survive outside it in droves – applications for food stamps and social security disability soared.
Trust in the entire job-search system was broken. You would spend hundreds of hours to be auto-filtered out for arbitrary reasons. Companies would leave jobs listed that were already filled, or create positions required for open search with internal employees already in mind. Postings with one opening would receive thousands of applicants. Job seekers had absolutely no way to determine if they would receive a real chance at getting a job or if they were just wasting their time. Spam on the company side was matched with spam on the job seeker side, as websites promised to send your resumes to thousands of employers.
College employment offices were strongly pushing the building of LinkedIn social networks at this time. The advice was to target an industry, tailor your resume to the industry as a whole, follow any companies you can think of in it, request to follow employees there, go to industry-specific networking events, use these feelers to discover where the opportunities are. They advised to treat job-search as a full time job in itself.
During this time, private sector labor unions practically died out while central banks and government policies encouraged corporate consolidation on a scale not seen since before FDR. Correspondingly, small business lost much of its place in the economy, industries began to show more signs of monopolistic behavior, and the wealth gap grew by leaps and bounds.
IV. Mid 2010’s and on: The rise of employment agencies and job search networks
The economy went through a long and painfully slow recovery, and companies were beginning to have trouble filling slots once again. Traditional job search sites would get spam or nothing, company specific portals would list jobs that got no qualified applicants. Nothing seemed to work and they began to pay third party employment agencies to help them advertise and fill positions like never before.
Many people still feel that they are underemployed and opportunities are limited, yet they feel like it’s a waste of time searching online because it’s a lot of work for little to no feedback. Headhunters are beginning to contact potential employees and encourage them to apply for specific positions, yet the whole system remains opaque.
With this loss of trust, employees are still wary of job changes, wondering if they’ll be kept when the economy turns again. Employees are also skeptical of working for Wall Street firms requiring long hours, feeling like they’re being used and their hard effort will come to nothing as their promised upward mobility fails to materialize and they are simply discarded in 5 years for the next set of suckers.
All the while, people feel left out of the system as labor mobility & opportunities remain elusive and costs of living soar – and they increasingly respond politically. Private sector unions practically died out during the downturn, and what remains of the small businesses sector doesn’t provide nearly as many job as it used to.
Lack of trust in the labor market needs to be recognized and understood as a problem with the labor force today. This can be combatted using a more balanced system for both employers and job seekers. Here’s my main recommendation:
Give job seekers the information and tools they need to find your job by including relevant information in judging their chances – and allow them to search by them. Include:
1. Number of applications received for the position
2. Number of positions needed to fill
4. Use clearly defined minimum requirements which totally replace the use of hidden auto-filters
E. Clearly indicate pay ranges for advertised positions
F. Include a description of what you hope to find in an employee
Right now, the job market for employers is a serious challenge while overqualified employees, often working long hours, are reluctant to spend their free hours applying for jobs unless they feel they will actually be considered. Employers will have to consider the positions of those they seek in order to find ways of reaching out. Headhunters have their methods which can be effective, so I won’t be surprised if they continue to gain market share.
For job seekers, your best bet is to get good at networking with LinkedIn. Follow all the companies you’re interested in working for and you can hear about real openings. Add individual contacts with those employers if possible because someone might give you that hot tip on a job they’re having trouble filling. Unfortunately most people can’t tell what jobs employers are having trouble filling without some kind of personal link – and the goal here is to find the places where your application will actually be read and considered. Just applying to listings that come up can take a lot of time and won’t necessarily get you any feedback.
Please note that there are some problems which we simply cannot control, we just have to see how they get resolved in the messy political system. These include the decline of private sector unions, the decline of small business, soaring costs of living, getting people off food stamps or disability and back into the labor force, and so on. The only recommendation I can give there is to focus on your own situation – how best for an individual to seek a job and how best for an employer to attract job seekers.