Why Job Searching is the Second Most Popular Activity on the Internet

Why Job Searching is the Second Most Popular Activity on the Internet

Published: December 05, 2001 in Knowledge@Wharton

Consider the following:

  • Monster.com,
    the largest online job board, has more than 20 million registered
    users; on a typical Monday afternoon from noon to 4 p.m., six million
    people are conducting job searches.
  • In a recent survey of
    employees by WetFeet.com, more than one-third of the employees polled
    said they are very happy in their current job; these same employees
    also said they are interested in finding out about other job
    opportunities and would be willing to move within six months.
  • In
    a survey of MBA students worldwide conducted by PricewaterhouseCoopers,
    students said what they wanted most out of their first job was "a good
    reference for their future career." In the same survey, only 20% of
    those polled said they expected to stay with their first employer more
    than five years.
  • General Electric last year announced that from
    now on, half of their new hires would be people the company had already
    employed as interns, co-ops or workstudy students.
  • In April
    2001 employers said they expected to hire 19% more college graduates
    than the year before; by September 15, they expected to hire 20% fewer
  • What all this points to, says Peter Cappelli, director of Wharton s Center for Human Resources,
    is the emergence of a dramatically different labor market that is
    changing not just the way people are hired and fired, but also how they
    view their jobs, their employers and their careers.

    Speaking at
    a Nov. 19 executive education forum on "Managing in Tough Times:
    Perspectives on Leadership and Change," Cappelli told executives in
    human resources and leadership development that changes in the labor
    market are taking place under conditions managers have never before
    faced  the need to downsize juxtaposed with the increasingly difficult
    task of recruiting new employees and retaining those who are already
    top performers. All this under the cloud of a now official recession
    and the events of September 11.

    "For those of us who study management," Cappelli says, "it is a unique" convergence of challenges.

    The  Rank and Yank Model

    among those challenges is talent management – a recognition that the
    best people in an organization have a significant impact on that
    organization s success. To put this issue in perspective, Cappelli
    asked his audience to focus on the worst employee they have, and then
    focus on their best employee. How much more valuable to the
    organization is the best employee vs. the worst employee, he asked.

    typical response, Cappelli says, is five to ten times better. And when
    you look at jobs where you can easily measure productivity  such as
    the amount of error-free code produced by computer programmers  the
    best programmer has been shown to be 22 times more effective than the
    average programmer.

    Now consider how much the best employee is
    paid vs. the worst employee. The typical response is about 10-15% more.
    In other words, the performance differences are orders of magnitude
    bigger than the pay difference.

    Why does this matter? "The
    ability of organizations to hire away your star workers" has increased
    significantly in the last few years, says Cappelli. "If somebody can
    come along and figure out who your best employees are, they could
    double their pay and still make out like bandits. So being able to find
    good people and keep them is a new phenomenon."

    A brief word about those worst performers: what to do about them? In Jack Welch s latest book, Jack: Straight from the Gut,
    the former head of GE differentiates between the top 20% of employees,
    the bottom 10% and the middle 70%. Those in the bottom 10% get pushed
    out, an approach known in consulting circles as "the rank and yank"
    model. "This really changes organizations," Cappelli points out. "It
    says that there is something about the worst employees that would be so
    difficult to correct that it s not worth making the effort &
    Ranking is an evolutionary system designed to make the company work
    better." But not without risk, Cappelli adds, citing Ford Motor Co.,
    whose attempts earlier this year to enforce rankings resulted in age
    discrimination suits, among other complaints, before the system was
    finally abandoned.

    Back to the best employees: How do you keep
    them? According to the WetFeet.com survey mentioned earlier, even
    employees who are happy in their jobs are willing to be enticed
    elsewhere given the proper incentives. These employees, says Cappelli,
    are called "passive applicants"  people who could be lured to a new
    company if that company takes the initiative in finding them.

    online recruiting, how easy it is now to do that. The 20 million people
    plugged into monster.com make up 15% of the U.S. workforce. Peak job
    searching time is from noon to 4 p.m. on Mondays (after the morning
    meetings) and job seeking is currently the second most popular activity
    on the Internet.

    But online recruiting is more than just posting,
    or responding to, a job listing. Cappelli points to Cisco Systems, a
    no-hold-barred master at both keeping its talent and hiring talent away
    from others. For example, the company runs contests on its website
    seeking input from outsiders in solving a particular problem in the
    area of, say, engineering. That helps the company identify good
    engineers outside the company and also allows Cisco to start flashing
    banner ads asking interested engineers to apply for jobs. Once an
    applicant fills out a job profile, that person is put in touch with an
    employee at Cisco in the same job category. The employee contacts the
    applicant. "It s called  Making a Friend at Cisco, " says Cappelli.
    If the applicant is hired, the  friend gets a bonus.

    it should be added, approaches the task at hand with a sense of humor.
    An employee of another company who is filling out a job profile for
    Cisco need not worry if his or her boss suddenly shows up. The employee
    can quickly click on a button labeled "oh, no! my boss is coming" and
    be transported to a page entitled "Seven Habits of a Successful
    Employee." Scroll down and there is a list of gift ideas for boss and

    It s not just jobs that are peddled on the web, but
    job information as well. Take Vault.com, a web site that sells
    information to job seekers about what it is like to work in a
    particular company. Vault.com s information is based on interviews
    with company employees. Those interested in a particular firm can buy
    that information, and they can also visit message boards where current
    employees post their own opinions of the workplace. "Do you think these
    boards attract your average well-balanced employee?" Cappelli asks.

    The point is, the company no longer controls the
    information that is out there, says Cappelli. "Company recruiters used
    to be able to direct recruiting by deciding how to pitch the company to
    job applicants. Now someone else is shaping that pitch."

    So what are recruiters to do? One answer is to get more sophisticated about the way they do their job.

    "We Cheat Death"

    the last 20 years, recruitment In most organizations was not a hard
    task, says Cappelli. The company merely had to hint that it was
    thinking about hiring, and job applications poured in. That s no
    longer true. Since about 1998, companies have realized that recruiting
    deserves not just more attention, but more creative thinking.

    the following facts: This past year, half of the college graduates made
    commitments to employers at the beginning of their senior year; MBA
    recruiting now starts in the first year of the two-year program;
    Accenture has begun co-op and internship programs in the sophomore year
    of college; the number of internships and co-op programs in high
    schools jumped dramatically between 1997 and 2000; UPS is making
    pitches about job opportunities in junior high schools.

    reason GE and other companies now focus heavily on their internship and
    co-op programs, says Cappelli, is that they have already worked with
    these employees and more importantly, these employees have worked with
    them. Someone who is already familiar with the company is less likely
    to leave shortly after signing on. The result is less turnover.

    the real challenge for recruiters these days is understanding the
    importance of marketing, especially on the web. Statistics show that
    one in five people who apply for a job at a particular company do so
    because of that company s product market ads. "IBM is especially good
    at this," says Cappelli. "They generate ads that don t mention the
    products at all but talk about innovation, creativity, being
    future-oriented. People see the ads, think they are neat, go to the web
    site and apply for the job.

    "What we are moving toward is a model
    of thinking about hiring as an employee value proposition," says
    Cappelli. Look at it this way. Suppose, he asks, you had to sell your
    job in a competitive market, knowing that there are a number of other
    firms out there trying to hire the same people you want. What could you
    say to persuade these people to come work for you? What, for example,
    could you say about what it is like to work for your company?"

    companies have already incorporated this question in their recruitment
    ads. McKinsey, for example, basically tells employees "that they will
    have to work very hard and that what they will get back is experience
    working with the cutting edge of the U.S. economy," says Cappelli.
    "Amgen has a motto in their employee value proposition that says "we
    cheat death. In other words, employees who work here will be creating
    drugs that keep people alive who would otherwise be dead. The Booz
    Allen website has a video description of a day in the life of an entry
    level consultant. And some companies announce that new hires will never
    have to work with a team member who isn t carrying his or her weight."

    to determine how to sell a company to future employees is a "real
    wakeup call" to recruiters, Cappelli says. "It requires them to think
    like marketers."

    What all this means, says Cappelli, is that
    it s fairly easy for companies out here to find your good employees.
    It s also easy for job applicants to find out information about a
    particular company that the company itself doesn t provide. "There is
    a sense that the labor markets have opened up. When that happens, and
    when people no longer expect careers inside the same organization
    forever, it begins to change the way they behave. Both talent
    management and online recruiting add to these new behaviors. The next
    generation of workers is the first group to experience this."

    The Emerging Workforce: What s In It for Me?

    question then becomes, just who is this next generation of workers?
    According to the study cited earlier of MBA students in industrialized
    countries (including the U.S.), the most important attribute of a new
    job for these workers is that it will provide a good reference for
    their future career. The second most coveted attribute is agreement
    with the company s values, including career/personal life balance,
    followed by likeable, inspiring colleagues (third) and competitive
    salary (fourth).

    Is this new generation really different from
    other generations, Cappelli asks. The answer is yes, and no. The
    sharpest change in attitude among American workers occurs in people
    born before World War II vs. people born after World War II. "People
    born after the war have a dramatically lower sense of commitment, of
    community, of involvement, and a much greater sense of the importance
    of individualism and keeping their options open. It s the baby boom
    generation moving forward. But if you look at people born in the 1970s
    and 1980s who are now entering the work force, they are not that
    different from the baby boomers. It s the baby boomers who are truly
    different from the generation that came before them."

    The real
    issue for the emerging group of new workers is their view of the
    market. "They have seen their parents going through downsizing,
    restructuring, all sorts of cutbacks, so they don t have a
    particularly pretty picture of corporate loyalty," Cappelli says. "They
    don t expect it. Their attitude is,  I had better take care of
    myself. "

    This new generation also seems to be more willing to
    take risks. It is no longer "such a black mark to go with a company
    that failed, whereas 20 years ago it was something you buried on your
    resume. Now people say,  oh, a failed start-up. That s interesting.
    Maybe he or she learned something, " says Cappelli.

    And finally,
    these young people are focusing on building careers across jobs, which
    means "they really want good performance management," Cappelli notes.
    "They want someone to tell them what is expected of them, how it will
    be measured, and what they will get for a job done well, not
    necessarily in terms of salary but perhaps in terms of experience or
    some sort of credential. They want all this because they are trying to
    build a career. They don t anticipate being at a particular company
    forever and they want to make the most out of their time there before
    they move on."

    What does this mean for the companies who are
    hiring these workers, Cappelli asks. It means that companies are paying
    much more attention to first-level management. For the last two
    decades, companies could get away with poorly-trained first-level
    supervisors, Cappelli says. "People were promoted on the basis of
    seniority, not on how well they could manage. And unless a company was
    sued, it didn t see the costs of this. Because there weren t a lot of
    jobs out there, employees tended to stay where they were."

    the labor market tightened up at the end of the 1990s, "suddenly
    first-level management becomes crucial," Cappelli says. "More attention
    is paid to doing better performance reviews, conducting them in ways
    that are more objective. It s the kind of feedback employees should
    have been offered all along from their supervisors."

    Cappelli offered several other observations to his audience:

      • In
        a survey of U.S. companies done two years ago, 63% of the companies
        said they were laying off employees in one part of the organization
        even as they were hiring in another part. "Before the economy began its
        downturn, more than half of the companies in the U.S. were having
        layoffs," Cappelli says. "It doesn t mean they were shrinking. It
        means they were getting out of certain businesses and into others."
      • The
        average college student takes six years to complete his or her college
        education. At Division One colleges and universities in particular,
        only 60% of the students graduate within five years.

    shortage of technical workers in such fields as engineering, software
    and IT is based on an imbalance between supply and demand that is
    related to the length of time it takes to get degrees in these areas.
    "In 1991, for example, with a recession and a downturn in the IT area,
    many companies decided to back off this function as a competency and to
    outsource it instead. Jobs began to dry up and college students no
    longer enrolled in IT programs. By 1995-96, IT workers were therefore
    in short supply – just when the market began to take off." Now,
    Cappelli says, IT programs are booming once again. In four years, he
    asks, will we begin to see an oversupply of these workers? The answer
    depends in part on the health of the technology sector.

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