Trends Revolutionizing the Job Search
NEWSLETTER volume 4 number 2
This is our last newsletter of the millennium so we thought it was fitting to take an in-depth look at three trends that are revolutionizing the job search.
The most profound and far-reaching of these is clearly technology, which Intel chairman Andy Grove calls "a rebuilding of the infrastructure." Two other trends - an increasing shortage of talent and shifts in employee motivation - are also significant. All these changes have implications that will affect the hiring process well into the next century.
One of those implications is even greater candidate mobility, and another is an increase in the speed with which candidates are interviewed and hired. Finally, effective interviewing techniques will be more important than ever in the years ahead.
Trend #1: Technology-Driven Change
Back in 1994, Jeff Taylor, then a 33-year-old ad agency executive, started an Internet site that was supposed to help link employees with employers. Job seekers could post their resumes for free and look through a job database; employers paid a nominal fee to access resumes or post job listings. Today that site, Monster.com, boasts a database of more than a quarter of a million jobs and 1.5 million resumes. But Monster.com is more than just another multi-billion-dollar web venture. It has also been the catalyst for an employment revolution.
In the five years since Monster.com began, close to 30,000 Internet job boards have been launched. Right now, at least 2.5 million resumes are available online, and more and more employers are using the Internet to find and recruit candidates. A year ago, only 17 percent of Fortune 500 companies were recruiting online; this year that number was 45 percent. For some companies the figure is even higher. Cisco Systems says it hires 66 percent of its workers and receives 81 percent of its resumes through the Internet.
These are not just entry or mid-level jobs, either. A number of top companies, including Motorola, Prudential, and Sony, are listing executive positions; one Motorola offering has a compensation package of over half a million dollars. And contrary to popular belief, the Net isn't only for techies; 65 percent of all online job seekers work in fields other than technology.
What's more, digital job search and recruitment is not only getting bigger, it's becoming much more sophisticated. Until recently, all job seekers had to wade through interminable listings on huge sites like Monster and CareerPath. Now, though, they can find thousands of niche sites, from the sublime (projectmanager.com; 6figurejobs.com) to the, well, less than sublime (funeralnet.com). They can even auction themselves off in Monster's new Talent Market, a concept that so far is generating more debate than actual jobs.
Employers are also benefiting from technology upgrades. For one thing, the playing field has become much more level; a small company can compete for talent right along with the national firms by sending its job postings directly into students' dorm room computers.
Corporate recruiters, too, are using technology to identify and source prospective employees in ingenious new ways. Known as e-recruiting, this approach is basically digital James Bond.
One particularly sneaky, though completely legal, technique allows users to "flip" a company's web site - that is, access pages not available through the site's home page. Recruiters can visit an unsuspecting employer's web site and find staff directories (sometimes with photos and contact information) and even organization charts. Recruiters also track prospective employees online, listening to what they say in Internet newsgroups and then approaching them via e-mail.
Meanwhile, the ultimate use of technology in job hunting may be just around the corner. Jeff Taylor, the man who started it all, envisions employers and employees setting up electronic relationships with each other long before job openings ever exist. Candidates, in effect, are always in the market, and the ideal job offer just a mouse click away.
Although there is no doubt that technology has forever changed the way people find jobs, trends in the labor market have also had a huge impact on the job search.
Most of those trends began in the 90s with a decade-long decline in the number of entry-level workers - approximately five million fewer than in the 1980s.
But it is not only new workers who are in short supply. McKinsey & Company predicts that the demand for executives will increase by about a third over the next 15 years. Yet the number of 35 to 44-year-olds, the age group that represents much of the future mid-to-senior level management pool, will actually decline by 15 percent between 2000 and 2015. In the past, similar shortfalls were offset by immigration and an influx of women into the workforce, but that isn't likely to happen now.
At the same time, corporate recruiters are confronted with an increasingly diverse pool of candidates, especially in high tech fields. Because fewer American students are earning degrees in computer science and engineering, for example, companies are hiring foreign nationals to fill key positions. This trend is clearly reflected in the numbers. In 1997, foreign nationals accounted for 11 percent of those receiving B.S. degrees in Computer Science or Electrical Engineering; 42 percent of those receiving Master's degrees; and 48 percent, or nearly half, of all Ph.D.s.
McKinsey points out that companies will continue to need more sophisticated and better educated workers to meet the challenges of this increasingly multicultural workforce as well as to stay competitive in a global marketplace.
Trend #3: Motivation-Driven Change
A third major change is in worker motivation. As Betsy Morris noted in a recent Fortune article, nearly every B-school student in the country has a bad case of web fever. But dot.comitis isn't just affecting MBAs; it's also striking law school grads, art history majors, and student teachers. Still, the infection is most noticeable at the top-tier business schools whose alumnae traditionally swell the ranks of consulting firms, investment banks, and other not.dot companies.
Now, though, many B-school graduates are opting for something other than the "blue-chip path:" they're trading a comfortable corporate berth for a risky but exhilarating ride with an Internet startup.
In 1995, for example, 38 percent of Harvard MBAs joined consulting firms, while 17 percent went into investment banking. In 1999, these numbers had shrunk to 29 percent and 12 percent respectively. On the other hand, 12 percent of Harvard graduates joined venture capital or high tech firms in 1995; this year, 32 percent did. Futhermore, an increasing number of MBAs are opting to start their own businesses - more than 50 in the class of 1999 alone.
At the same time, more and more old guard firms are losing personnel to startups. McKinsey & Company has seen its turnover rate increase from 17 to 20 percent in the last five years, primarily because of raiding by technology companies. Even established talent seems to find the assured future at an established firm less motivating than the opportunity to be part of a cutting-edge venture, not to mention a big IPO payoff.
A case in point - George Shaheen, former CEO of Andersen Consulting, left his firm, with its $9 billion in revenue, to join an online grocery delivery business whose revenue was almost zero. A dumb move? Not really. Andersen's compensation could potentially top $100 million if the online company's IPO succeeds.
An added plus for adventurers like Shaheen is that in the unlikely event their gamble doesn't pay off, a stint with a startup still looks good on a resume: it's not failure, it's "experience."
Still, the blue chip firms aren't taking defections of this sort lightly. For an idea of how they're meeting the startup challen