No more missed connections in the job market

No more missed connections in the job market
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A healthy labor market not only has plenty of jobs, but also adeptly matches workers and employers. With a record 7.1 million job openings, the 2018 U.S. labor market gets high marks for the first criterion.

But when it comes to matching workers with job opportunities, the U.S. has a long way to go. Harnessing the power of technology can help.

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Pairing qualified workers with suitable job openings is often a tall order. Employers devote substantial resources to finding qualified workers, often with only limited success.

This mismatch between workers and employers can have a profound impact on the labor market: A paper by the New York Federal Reserve found that during the recession employment mismatch boosted the unemployment rate by roughly a whole percentage point.  

The promise of improved technology has not yet solved the mismatch challenge. For approximately two decades, job searches have moved primarily online.

Employers advertise jobs through their own websites, and aggregators — like Monster and CareerBuilder — compile stockpiles of jobs and potential applicants. While economic research has shown conclusively that the internet has improved both the frequency and quality of matches, research has also demonstrated that mismatch remains a real concern.

A first-order part of the problem is a lack of standardized, openly accessible information across jobs postings. While information — such as projected wage, required education and desired skills — will likely be key to an eventual match, there is no formal requirement that this information be included in a job posting, nor that it be freely available for use by any application looking to improve job matches.

This not only means that participants in the job search will have trouble finding the right match but that online job data is not “open and machine readable,”meaning that it cannot be easily used by another platform or adopted for another purpose, such as measuring demand for particular types of jobs.

Indeed, incomplete information can play havoc with a market; imagine trying to trade stocks without knowing the share price or searching for a house without knowing the square footage.

Some policymakers have taken on this challenge. In Virginia, for example, then-Governor Terry McAuliffe in 2016 launched an initiative to pilot the creation of a single, machine-readable, publicly available dataset of job openings within the state, resulting in several new applications developed in a matter of weeks.

The private sector has begun to lead on this, too. Earlier this year, the U.S. Chamber of Commerce Foundation announced an effort to make job postings more consistent by building a job registry for employers that adopt a standard framework for postings.

The chief goal of the project is to better match workers and employers, but it will have the auxiliary benefit of better allowing all stakeholders, including government agencies, to track labor market data in real time.

These steps by the private sector and state governments are important, but insufficient. Adopting a nationwide, open-job posting data standard is key toward a new apps economy competing to better match workers and employers but won’t happen by accident.

The federal government can lead on this challenge by offering to adopt an industry-consensus standardized format for its own job postings; this action alone could, in turn, help scale the standards across more private-sector employers.

The federal government can also incentivize take-up among federal contractors by deeming standardized job postings sufficient to meet notice requirements for veteran hiring. Google Cloud’s recent veteran job search application represents a new generation of matching tools that can scale faster with standardized job postings.

Many problems in public policy require complex solutions or expensive fixes. Fortunately, the problem of job mismatch is not one of these problems; it can be largely mitigated through a new competitive marketplace of applications built upon the widespread adoption of open-job posting data standards.

Agreeing to such standards will likely take both cooperation from the private sector and leadership by states and the federal government, but will lead to much better outcomes for workers and firms in the long run.

Aneesh Chopra is president of CareJourney, which harnesses open data, methodologies and APIs to provide market intelligence. He was formerly the chief technology officer of the United States.

Benjamin Harris is the chief economist for Results for America and was formerly chief economist to Vice President Joe BidenJoseph (Joe) Robinette BidenMeet the lawyer Democrats call when it's recount time O'Rourke receives invite to visit Iowa from Democratic Party in Des Moines Nearly six in ten want someone other than Trump elected president in 2020: poll MORE. He is also the executive director of Kellogg Public-Private Initiative at the Kellogg School of Management at Northwestern University.