What is the Hidden Job Market

I hear this term a great deal in my profession and try to explain it to my clients.  Especially today, February 2011, the hidden job market is becoming more hidden.  Job openings are going up but online job posting are dropping off.  Why?  Well, it is simple.  Employers are becoming more and more overwhelmed with the number of resumes they receive for each posting.  The time it takes to review and respond is killing their productivity.  So the employee referral path is much more inviting.  Employee referrals are potential candidates that current employees refer to the company.  They recommend the people that could be their future co-workers.  Many times companies will offer a bonus to go with the referral.   If the new hire stays for a certain amount of time, the employee who referred them, gets a bonus.  Not bad and a good incentive all the way around.  

What does this mean to you?  It means that your networking, to get you into your A list of companies and in front of the hiring managers, is crucial to your future employment.  I have included an article written by Beverly Harvey, of Harvey Careers, an expert in the job search strategy world.  She explains the hidden job market.  I hope you find it enlightening.

- Lisa

Understanding the Hidden Job Market

Often referred to as the “hidden job market” this segment of unadvertised positions has been recently increasing. A few of the reasons why jobs may not be posted and thus, classified as “hidden” include:

• Staff reductions have left many Human Resource departments operating with a bare minimum staff. The HR department simply does not have the resources to respond to the hundreds or thousands of resumes they receive for advertised positions. Therefore, they do not post the open positions.
• In an effort to cut costs, many companies who regularly contracted with an executive search firm have decided to eliminate this expense. Some companies are conducting a referral-style recruitment process and some have created a small internal group to manage recruitment of senior level executives.
• The board of directors or venture capital owners may want to replace a non-performing senior executive, however they do not want to upset the current executive and cause him to leave before they have identified a new candidate to replace the existing executive.
• The current executive may have submitted his resignation but agreed to stay until a replacement is secured. The company may not advertise the position because it may gravely impact the subordinates performance and an important initiative the executive is leading.
• While there are many frozen positions, there are many that are simply sitting vacant and the company is not in a rush to fill the positions unless the “perfect” candidate appears on their radar screen.
• A company decision maker may be formulating a new position, but has not yet developed the job description, skill requirements or received budget clearance for the new position.

In reviewing the Department of Labor, Bureau of Labor Statistics reports, the majority of all jobs are hidden or unadvertised. The actual percentage changes month to month but has been interpreted by some experts to be as high as 80 percent. This would indicate that only 20 percentof jobs are posted.

Given these percentages, pursuing the hidden job market makes sense. This unadvertised segment will require a targeted search, extensive networking, and a crystal clear value proposition. One of my clients who followed this plan of attack identified several target companies and began a focused networking process. The result: he landed a position in the function, geography and salary range of his choice.

Another client identified one target company, began an internal networking process, met with several senior executives, and was offered a newly created position at a favorable salary.

As such, pursuing the unadvertised market makes sense.