Adzuna co-founder Doug Monro asks whether new technology can fix Britain’s broken jobs market.
With UK unemployment hitting 2.7 million, an 18-year high, and the economy lurching back towards recession, there is a lot of doom and gloom around the jobs market. But, in fairness, it is a bit of a train wreck.
The outlook is worst for young people looking for work. There are now 1.04 million of them, taking the unemployment rate for 16 to 24-year-olds to a terrifying 22 per cent. Candidates with experience are landing new-graduate level jobs, leaving the latest wave of new graduates in a predicament. Fresh graduates all too often find themselves in a Catch-22 situation, where they are rejected from roles due to lack of experience, yet are given little opportunity to gain this first experience in their chosen fields.
Research by the Bank of England has found that most companies in the services sector, which accounts for three-quarters of the economy, plan to reduce headcount. As we slide into recession, unemployment is likely to increase as businesses cut jobs alongside public sector retrenchment.
At these levels of unemployment, there is certainly no shortage of job applicants, and competition for vacancies is fierce. Stories of hundreds of applicants per position, especially for unskilled work, are commonplace. Companies are also often under increasing financial pressure, so it becomes even more crucial that they hire the right person for each role and improve productivity.
There are also some massive structural problems: the wrong people in the wrong places with the wrong skills. Our research shows that there are 50 unemployed per job vacancy in Hull compared with fewer than one in Oxford or Cambridge. Yet can anyone find a Perl developer in London for a sensible salary?
Employers and recruiters are starting to recognise the changing landscape in which people are finding jobs. Savvier employers are starting to embrace social networks like Twitter, Facebook and Linkedin to try to find top talent for free, although most still find most of their roles through recruiters or direct advertising.
Leaving aside the state of the underlying economy, it is clear that the web has not yet brought all its promise to the world of recruitment. Listings that used to be bought in newspapers have now largely migrated online, but if you look at the functionality of the major job boards today, there is little on offer that is new beyond the basic listings search product which was brought in by the likes of Monster nearly 15 years ago.
Candidates have to search across many websites, dominated by swathes of anonymous ads placed by recruitment agencies to attract CVs, then register their details in multiple places. They are often bombarded by irrelevant alerts and phone calls for jobs that often do not suit them.
Human resources departments, often focused on internal issues like “people development” and unwilling to screen hundreds of applications per position, outsource recruitment to agencies with relatively little scrutiny of their processes, and then leave hiring managers to pick from the best of a bad lot. It’s not a brilliant situation.
* * *
Let’s face it, tech start-ups will not in themselves directly create three million jobs overnight to plug the hole. We would be pretty happy if we created a Facebook (employees: 3,000) or two in the UK. In fact, old style e-commerce businesses like Amazon that actually ship stuff probably create a lot more direct employment than the internet businesses that dominate the start-up world.
Helping to fix the recruitment process is an area in which innovation can make a difference, though. Start-ups in this space can surely help reduce transitional unemployment, wasted money on unnecessary fees, bad hiring and the poor employee productivity that results. Fix this for the whole economy and there have got to be employment benefits.
Tech start-up innovation in recruitment is generally focused in two areas: the first is the job search process.
The job search process is hugely inefficient. Not only is recruitment broken, as described above, but the job ad market is hugely fragmented, meaning that candidates typically have to search at least five or six job boards, plus a handful of specialist ones in their particular profession, to make sure they have covered the majority of roles out there.
Many ads are out of date, or their chances of finding the right person are low, due to no personal connection between the company and the applicant. Candidates are not educated to know what their skills are worth, so often apply for jobs way above (or below) the value of their skills.
My own start-up, Adzuna, aims to fix this. There are around 500,000 fresh, live vacancies in our search index from all the top job boards and companies: nearly every job ad in the UK in one place. Were we to fill them all, it would shave 20 per cent off the unemployment figures.
We offer simple, fast search of these jobs, then overlay social and data layers to help maximise candidates’ chances of finding the right role for them. If you connect with LinkedIn or Facebook, we’ll show you jobs at companies you’re connected to (first or second-degree), and the people who can introduce you.
Because we list all ads, we can also produce meaningful stats about the value of a ruby developer or the average salary for graphic designers in Nottingham.
Other players are also addressing the rise of social job search. LinkedIn is the grandaddy in user terms, but due to limited job inventory is as much CV database as search engine. But US startups Jibe, TopProspect and BranchOut all have interesting models to try to create social networks around job ads. They problem is that they’re trying to build critical masses from a standing start.
In the UK, free sites like Workinstartups.com bring a welcome niche focus on startup roles, but they don’t offer much by way of innovation.
The second opportunity is in how companies acquire and manage talent: They’re needed because, at the other end of this broken chain, you have the employers, and a clutch of B2B startups that aim to change how they hire.
Software as a service businesses like Jobvite or incumbents like Taleo offer HR managers more effective ways to get their vacancies advertised through a variety of sources – including their own web pages and social media as well as job boards – and track applicants through to interview and employment.
The US, again, leads in this area, because recruiters typically have less of a stranglehold on the market, so employers are more used to direct recruiting. But there are players in Europe like BraveNewTalent trying to create talent management communities for employers.
Recruitment via social media remains nascent, despite much hype. Those who have found jobs via Twitter remain outlying case studies despite the vast volume of automated ad posting that goes on, but SocialCV, which provides software to let employers snoop on your social profiles, has some traction.
Hirematch.me is an interesting new concept out of London and Austin that aims to better match candidates true skills and aptitudes to an employer’s culture.
Unemployment in most of the developed world isn’t going away any time soon. But the promise of innovation in job search and how we match candidates to roles can bring some massive efficiencies in reducing frictional unemployment (think, for a start, of the three months’ salary typically paid to a recruiter) , matching people to the right jobs and companies, and improving their productivity and job satisfaction once they get there.