Informal Network Non-Displacement Effect
RCTReview
Employers frequently worry that adopting digital recruitment platforms will simply displace existing informal hiring channels rather than expanding total firm employment.
Picture this
Imagine a fishing company that usually catches fish using traditional shore nets. If they buy a modern motorized boat with advanced sonar, they do not throw away their shore nets; instead, they keep using their shore nets at full capacity while sending the new boat out into deeper waters. Because the new boat catches fish from previously unreachable areas without interfering with the shore nets, the total catch grows larger instead of shifting from one net to another.
What the evidence says
Firms in the combination advertising and verification group increased online portal hiring by 8 percentage points (68 percent increase) while maintaining baseline recruitment volume through traditional informal networks, resulting in net total vacancy expansion.
- Who was studied
- 1,719 job vacancies across 1,576 urban firms in Bengaluru, India.
- How
- Randomized Controlled Trial (RCT) with 6-month longitudinal tracking of overall firm hiring across portal and traditional recruitment channels.
What to do
Integrate digital recruitment portals as additive sourcing streams alongside existing employee referral programs rather than replacing informal recruitment channels.
From the source
"Firms in the combination group also successfully filled more vacancies overall because they did not reduce the number of people hired through traditional networks, even as they hired more candidates from the online portal."
Online Job Portals and Firm Hiring in India.pdf