Hidden Job Market

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The so-called hidden job market refers to the large number of job openings that either are not advertised publicly or which are done so only as a perfunctory formality to satisfy corporate human resources department rules. In many of the latter cases, the hiring manager already has decided upon a specific person for the position in question, and applications from others are summarily rejected for one purported reason or another. Indeed, under the latter scenario, a lengthy list of pseudo-requirements frequently are attached to the job advertisement, and they typically mirror precisely the background of the preferred, predetermined job candidate.

The large scope of the hidden job market is yet another example of the importance of networking in uncovering career opportunities. Also see our related discussion regarding workplace sponsors and the clout that they exercise in the hiring process.

Jobs Created for Specific Persons: One aspect of the hidden job market is the creation of new positions earmarked for certain persons. In this situation, a manager may learn that a particularly talented person is available, and goes ahead to create an opening tailored for that person. In such cases, the manager in question may not have an immediate need for a new person on staff, but sees the longer term value in bringing that specific person on board.

To gain the services of that person in a timely fashion, before he or she has time to consider other possible offers, the hiring manager may seek to circumvent normal corporate rules for advertising job openings publicly. Such circumventions, not surprisingly, tend to be more common the more highly placed and influential the hiring manager is.

Effect of Labor Market Conditions: The weaker the job market is (that is, the less hiring is done in the aggregate versus the number of job seekers; stated differently, the higher the unemployment rate is in a given field), the more common it is for jobs to be filled in this relatively informal fashion. As a result, applying for many advertised job openings actually is a complete waste of time, since hiring decisions already have been made before these postings see the light of day.

By contrast, in strong economic periods, where unemployment is low, employers typically are compelled to advertise publicly to fill job openings.

Extent of the Hidden Job Market: Outplacement executive Duncan Mathison, author of Unlock the Hidden Job Market, published in 2009, estimates that about half of all jobs are filled outside a formal, open and competitive job posting process. He bases his estimate on a combination of labor statistics and recruitment surveys.

One of Mathison's methods is to compare data from the federal Bureau of Labor Statistics (BLS) on employers' planned hiring in the next month with their actual hiring. If a firm takes on more new employees than its estimated hiring, he draws the conclusion that the excess represents the filling of unadvertised jobs.

The HR Response: Human resources professionals defend an open process of advertising for job candidates as a way to open up the pool of prospective talent, and to increase the odds that the most qualified person is indeed hired in the end. Moreover, they caution that a closed process, in which jobs are not filled in a competitive fashion, can increase the risk that the firm will face (and lose) lawsuits over discriminatory hiring practices, or be subject to audit by the federal Equal Opportunity Employment Commission (EEOC) and its counterparts in state and local governments.

When HR rules force the advertisement of a job that actually is already earmarked for a specific person, this creates a so-called phantom job posting. This represents a closely related issue in corporate hiring practices.

Tapping the Hidden Job Market: Among the strategies recommended by experts are:

  • Network regularly with managers in your company, so that they have you in mind should an opening occur in their areas.
  • Think about the types of jobs that could use your skills and experience, the companies where someone like you is apt to succeed, and the types of managers (and management models) under which you would thrive.
  • Speak candidly with your boss to determine whether you are a likely candidate for promotion in your current organization.
  • Attend events in your industry or field, and make contacts with hiring managers, not fellow job seekers.

Source: "Beware the Phantom Job Listing: Some Posts Go Unadvertised as Executives Tap Their Contacts," The Wall Street Journal, January 9, 2013.