Have you ever wondered why “placement agents” or recruitment firms are ubiquitous in Indian cities? These entities claim to connect jobseekers to suitable jobs or employers to suitable candidates at a certain fixed premium, hence saving both the hassle of searching, screening and eventually recruitment. Implicit in the operation of these entities is the presence of a significant amount of information asymmetry for both job seekers and employers.
This information asymmetry manifests in unemployment in a unique way. The most obvious causes of unemployment are a surplus of skilled workers but lack of enough vacancies or a surplus of jobs but lack of enough skilled workforce to fill them. However, there is also a third possibility, wherein there are sufficient skilled workers and jobs but what’s absent is a mechanism to link one with the other the other. And this is the type of unemployment that can be solved by addressing the information asymmetry in the job market.
Key Aspects of the Problem
Since 2017, the Department of Employment, Haryana has been working on mitigating this problem of linkages and information asymmetry. Conversations with various employers operating in Haryana, ranging from large industries and corporates to small stores and micro enterprises, reveal the problems they face with respect to recruitment.
On the other hand, candidates are unclear about several things:
Most entry-level job advertisements are not explicit about the above parameters. The result? Candidates apply to jobs with limited or no information and then quit soon after joining because there is an expectation mismatch. During a series of job fairs held in Haryana between January 2019 to July 2019 only 18% of the candidates who received an offer joined, and then a further 40% of those who had joined, quit the job in the first 3 months, due to one or more of the above reasons
How Haryana is solving this problem
Based on this data and interactions with employers and job seekers, the Department of Employment, Haryana was able to identify three interventions to address the job linkage problem.
To this end, the Department of Employment has now taken up the role of a facilitator to enable smart matching of employers to jobs, and vice versa. Previously the government was actively organizing physical mega job fairs and enabling job discovery through matching on their own. However, as a facilitator this role undergoes two key shifts.
Firstly, it entails the Government collecting data on all potential job seekers in the state with their employment preferences and bringing this on a common portal envisioned as Haryana Rozgar Portal. Currently, this data resides in disaggregated databases in multiple departments such as Skill Training, Higher Education etc. The Department of Employment has already brought data of more than 10 lakh candidates under its purview through this exercise and on completion should have unique records of more than 50 lakh potential job seekers across the State.
The second key component is where the Government enables access to the portal for multiple job linkage platforms, which aggregate job openings from various employers. With online systems already developed to perform matching and then link candidates to suitable jobs, its these platforms that establish the final job linkage instead of the Department doing job fairs themselves.
Hiring through these digital job linkage platforms ensures that candidate preferences and a macro picture of their skill-sets are available for an employer to view before they get to the interview stage. This saves a lot of effort in negotiations which happen post an offer is made as well as attrition post-joining. Conversely, based on information available on the platform, candidates can apply only to those jobs that meet their preferences.
Currently, the Rozgar Portal has onboarded more than 17,000 industrial employers looking to hire post the lockdown and they have been given access to candidate profiles. The second stage of the same will involve allowing aforementioned linkage platforms to be users of this platform and link candidates to jobs in large numbers.
Employment linkage has remained a problem of information asymmetry. Introducing innovation in the job discovery process through the lens of a facilitator might prove to be the key for governments to link more people to jobs.