A recent working paper by Anton Cheremukhin and Paulina Restrepo-Echavarria proposes splitting job vacancies into two categories.
- Job vacancies that firms intend to fill with unemployed workers; and,
- Vacancies firms intend to fill by poaching employees from other companies.
The dual approach, known in the paper as “dual vacancy”, offers a compelling explanation for the puzzling behavior of the Beveridge curve in recent years.
The puzzling behavior:
- Historically, when unemployment went down, job vacancies went up, and vice versa.
- Recently, the pattern changed. More job vacancies than expect given the unemployment rate.
- That means that even with lots of job openings, unemployment isn’t decreasing as much as it used to in similar situations. Hence, some job openings may be for poaching already employed people.
The findings align with point 3 above. There’s been a significant surge in “poaching” vacancies compared to earlier periods.
In a complex job market, what does this mean for us as leaders?
- Consider the vacancies you’re creating — who are they for? The poached or the unemployed.
- Are we adapting our recruitment strategies accordingly?
The paper finds implications for monetary policy, but I’m more interested in what this means for our day-to-day talent management strategies. Are we clear on which of our openings are aimed at bringing in fresh talent versus attracting experienced hires from competitors? How does this impact our approach to retention?
My personal philosophy: talent is everywhere and there are opportunity costs of hiring employed vs unemployed talent. Consider that the unemployed person may be more generative and more driven than the person currently employed. For the teams I build, drive and generativeness are attractive qualities.
Talent Revolution 