Digital innovation is rapidly transforming how labour markets shape the competition for jobs. We now spend more time online and create more digital data than ever before. Over 90 per cent of the population in many developed countries has access to the internet (World Bank 2021), and spend a lot of time on it. Eighteen to 35 year olds in the USA spend the equivalent to a full working day a week on social media alone (Nielsen 2018). In relation to job search, Adecco (2019) estimates that today candidates spend, on average, three quarters of their job search time online. Platforms include Linkedin, Facebook jobs, Google Careers, Glassdoor, Twitter, amongst many others. People’s increasing online presence means that to recruit talent companies increasingly have to operate in that digital space and with digital tools: they are now using digitalized advertising to reach more candidates, digitalized CV analysis to make faster decisions, and interview data analysis to make better predictions on employee performance. But what is new about the digitalization of labour markets? Our research discusses three characteristics of digital labour markets that distinguish them from earlier ‘analogue’ models: Information, Control and Engagement (ICE), and its consequences.

Information

Digital tools give job seekers new ways of describing themselves and employers additional data on candidates, in real-time and at low cost. The digital labour market is much more information intensive and offers the possibility to observe candidates in ways that were previously unimaginable. The nature of the CV is altered: 3D CVs offer detailed information on applicant’ profiles and qualifications through meta-data supported by digital means. Observation of skills and previous work is facilitated by digital technologies. Job-readiness can be observed through tasks to be performed online and online tests. The recruitment process is expanded to include new sources of information, such as social network sites. Some legislators have begun to react against the most blatant strategies for digital scoping and vetting such as asking candidates to provide passwords or usernames or to send invitations to connect online to examine their profiles, but regulation is still in its early days. Digital vetting may lead to data that recruiters should be encouraged to ignore (e.g. image, age, political views, relationship status or sexual preferences). This is linked to a control shift.

Control Shift

In analogic labour markets, what applicants communicate to employers is largely created specifically for the selection process. In digital labour markets there is a change in control of the information from the applicant to the employer. The information can come directly from the applicant but also be extracted by the recruiter, sometimes without the awareness of the candidate, using digital footprints: videos recorded, social media posts on and from the individual, blogs, photos, previous company websites, etc. These digital footprints are often not produced with the recruitment process in mind. They can contain information produced by the applicants’ network, rather than the applicant. Applicants have more limited control over when, and in what order, their online information is accessed by employers. Information processing can also be partly automated, delegated from humans to machines, resting on the claim that they are faster and more ‘accurate’. This market is dominated by companies like Oracle, but there are hundreds of HRTech solution providers. Some, like Taleo, automatically rank applicants comparing their resume to the job description. While these systems automate the process and seek to make it consistent, they are not necessarily free of bias, including ‘confirmation bias’: as algorithms are fed with company data to identify relationships that predict performance, existing biases may be replicated. This suggests that in spite of their veneer of objectivity, algorithms can learn our biases.

Engagement

The digital labour market also changes the nature of engagement for both hirers and job seekers, as it becomes increasingly boundaryless in time, activity and geography. There is no switching off recruitment: digital technologies enable an examination of the past as well as the present; applicants lose control over the time dimension. The ‘candidates’ engagement in the process changes as the distinction between active and passive candidates no longer seems sufficient. Now every internet user can be a potential applicant. The possibility to post personal profiles on employment sites also generates 24/7 competition, even with applicants who are not aware of the vacancy, as employers’ algorithms search through job seekers’ profiles for headhunting opportunities. Facebook, Twitter or Instagram show job adverts to users whose profile could be matched to a job and who have not taken any steps to present themselves as job seekers. They are what we could call ‘dormant’ candidates. Some vendors specialize in finding such candidates gathering information from various websites and compiling an individual profile that is then incorporated into the recruiter applicant tracking system (ATS). The role of geography is reconfigured as recruitment processes are globalized.

Where do these changes lead?

The above processes blur the boundaries between what is work relevant and irrelevant, as access to data on the ‘self’ of candidates is facilitated. Employers view the ‘digital self’ as a door to seeing the real ‘personality’ of applicants. Adecco (2019) found that about three quarters of employers consider social media profiles to be a ‘true reflection of a more complex reality, which is more accurate than a static tailor-made CV’. These digital tools are not only used at the top end of the labour market. Personality profiling based on social media data to score personality has been used to predict risk of bullying or bad attitude of babysitters, for example.

The rise of the digital labour market challenges existing theories of job competition focused on the role of credentials in determining job market outcomes. As Jeff Weiner, LinkedIn CEO put it, the qualities that employers are seeking:

“are qualities that you don’t necessarily pick up from a degree (…) Increasingly I hear this mantra: Skills, not degrees. It’s not skills at the exclusion of degrees. It’s just expanding our perspective to go beyond degrees”.

Companies do not engage in recruitment in a uniform way or with the same purposes, as technologies may be used to reproduce or challenge labour market inequalities, with different consequences in terms of social inclusion and exclusion. For example, some companies may use technology to reduce the range of educational institutions they engage with while others seek to use technology to expand them. This has fundamental implications for how educational and labour market inequalities are organized in relation to each other. Johnson and Gueutal (2011) describe how Microsoft mined data on the relationships between variables such as university attended, work experience and previous employers to target certain universities and companies for future hiring. Google employed a similar approach, to narrow down the universities it approached to those that provided their top talent. But Unilever used technology to target more universities. With AI, and making use of recruitment tools such as Facebook, WayUp and Muse, it expanded its campus milkround from 840 to 2,600 universities, while reducing costs. Other approaches go further, not trying to use universities in the process at all to better reach candidates from non-elite universities.

There seems little doubt that the digital labour market has profound implications for current accounts of the education-work relationship and social inequalities, but there is still a lack of clarity regarding how digital recruitment tools are being used and shape recruitment processes and outcomes. Moreover, the digital labour market is evolving across various aspects of the recruitment process, often co-existing with established labour market practices. But the direction of travel is towards an increasingly digital labour market. For this reason the Digital Futures of Work Research Programme is now examining these issues with companies to explore their approaches to digital hiring practices.

Access the full paper here.

References

Adecco (2019) Work trends study 2019. https://www.adecco.it/come-trovare-lavoro/worktrends-study-2019 [accessed 12-02-2021].

Johnson, R.D. and Gueutal, H.G., (2011) “Transforming HR through technology” SHRM Alexandria, VA.

Nielsen (2018) Connected commerce: Connectivity is enabling lifestyle evolution. Available at: https://www.nielsen.com/au/en/insights/reports/2018/ connected-commerceconnectivity-is-enabling-lifestyleevolution.html [accessed 15-01-2021]

World Bank (2021) Individuals using the internet (% of the population) https://data.worldbank.org/indicator/IT.NET.USER.ZS [accessed 03-02-2021]