Search Effort Substitution
RCTReview
Firms expend substantial internal time and financial capital searching candidate CV databases and sorting unvetted applications, which consumes valuable manager bandwidth and suppresses overall hiring propensity.
Picture this
Instead of a restaurant manager spending hours sourcing fresh ingredients at multiple early morning markets, an external food distributor takes over the entire sourcing and quality check, allowing the manager to spend 100% of their energy running the restaurant.
What the evidence says
Treatment vacancies saw a 76% reduction in firm-initiated candidate CV database searches (0.84 fewer matches from a control mean of 1.102, p < 0.01) and a 39% reduction in direct jobseeker applications (2.67 fewer applications from a control mean of 6.862, p < 0.01), proving firms actively delegate sourcing labor to public employment counselors.
- Who was studied
- N = 1,705 permanent contract vacancies posted by small and medium-sized French firms during the RCT sanctuary period.
- How
- Inverse propensity weighted (IPW) regression measuring candidate application volume and channel source across treatment and control vacancies during the first two weeks post-posting.
What to do
Outsource initial candidate database sourcing and applicant filtering to dedicated public employment counselors to reduce internal corporate recruiting bandwidth expenditure.
From the source
"This substitution between firm and caseworker search effort is an important result and is consistent with further evidence on successful counselor-made matches."
Are_Active_Labor_Market_Policies_Directed_at_Firms_Effective_Evidence.pdf