2015/06/03 (Wed) Graduates and employment Mismatch

Graduates and employment

Mismatch

THIS month Britain's universities will churn out 350,000 graduates in the class of 2015. But once the end-of-year celebrations are over, almost half of those who manage to find work will be entering jobs that do not formally require a degree (see chart). That has not stopped employers complaining of skills shortages. For instance, on June 1st Adzuna, a job-search-engine firm, reported the highest number of vacancies since the recession.

Economists believe that much of this difficulty lies in matching the supply of graduates to the available jobs. In 2010 Peter Diamond, Dale Mortensen and Christopher Pissarides won the economics Nobel prize by demonstrating that unemployment can stay high in times of vacancies. It is not possible to assume that buyers and sellers of labour immediately find each other; in many markets this only happens after a costly and lengthy search process. To understand this problem, economists have started to look in a surprising direction for inspiration: online dating.

With its complex matching processes, costs of looking around, and emotional highs-and-lows, a job search shares many characteristics with the world of virtual love (or virtual world of love). In both, there are search costs. It takes time and effort to create an online dating profile, just as it takes time and effort to create a curriculum vitae. And then there is the problem of so-called "mutual choosing options". Those looking for love and careers cannot simply make their choice and be done with it; they need the person or employer they like to also pick them as well.

But if digital dating suffers from many of the same afflictions as the graduate job market, it may also offer solutions. In 2012 Sean Rad, a college dropout, created Tinder, which shows users photos of potential suitors nearby and matches those who mutually "like" each other's pictures. Now it has accumulated over 50m users.

As a result, graduate recruiters are falling over themselves to copy the idea. Among the new crop is Switch, which allows candidates to thumb through job listings: flick left if uninterested and right to register for a potential work match. A competitor, Jobr, which also employs the swipe-if-you-like model, uses information from LinkedIn to recommend jobs that candidates might find interesting. Since its launch last year, Jobr has submitted more than 100,000 job applications for its members each month. Large firms are joining in, too. Last year, Zappos, an online retailer based in Nevada, scrapped formal job postings and replaced them with a new site encouraging candidates to engage with each other and the firm in a way not dissimilar to existing online-dating forums.

For the anxious 21-year-old leaving campus for the last time, the worlds of economics and online dating have a few lessons. First, pick a thick market. Just as the most successful lonely hearts go to the apps with the highest-number of potential suitors, so should graduates also head to where the most job opportunities are. Second, just as online daters "signal" their qualities by posting photos, job applicants should also try to communicate their strengths to employers effectively. And finally, settle. Expend the costs of searching for a partner or job only if those costs are outweighed by the expected benefits of a new opportunity or lover. Who said economics wasn't romantic?

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