There is currently a discussion on LinkedIn Answers about whether a hidden job market exists and the common belief that the majority of jobs are never posted. I posted an answer, but a much better answer was posted a little while later by Gerry Crispin of CareerXroads. CareerXroads does some great research of the job market and Gerry’s answer provides some excellent insight.
The original question on LinkedIn was:
Does anyone have a statistic to back up the old 80/20 rule on networking? i.e. 80% of jobs are never posted
Here’s Gerry’s answer:
The statement is not true. It never was but it arose as a legacy of the print classified culture pre-internet. In those days the Sunday classifieds section of newspapers defined "a published lead" and clearly they represented no more than 20% of the actual positions open. Today, more than 95% of all positions are published – primarily on the websites of the various firms that have approved them. The "hidden job market" has nothing to do with the opening being hidden – it is now all about the transparency of what the job really requires, the firm, the hiring manager, etc.
Networking is absolutely not about uncovering the "hidden market" as leads – that’s just a sadly misleading image that still sends job seekers down blind alleys.
For a job seeker:
- Networking can be about sharing leads with others in a disciplined way so as to leverage the research of many.
- Networking can be about obtaining unpublished information about the published leads to gain a competitive edge when interviewed.
- Networking can be about identifying and reaching out to individuals in target firms where you have seen published leads or have reason to anticipate that a new opening will be approved…for one reason…to obtain permission for that person to be your "employee referral."
The real story about referrals is not that nearly 1/3 of positions are reported as being filled from employee referrals. Instead it’s that fact that so many positions are filled from so few referrals that is important. Nearly 1 of every 4 referrals results in a hire!
By my calculation [and I do have data] job seekers applying for a position with an employee referral are 70 times more likely to be hired than w/o one. (Even a third party recruiter putting forth several candidates is more likely to get his/her candidate past finalist to new hire if the candidate has an internal referral.)
It is better to say: The 20% of jobseekers who managed to find a job without networking probably took 80% longer than their colleagues who did. I would also suggest that they also 80% more likely to perform below average than their colleagues who network….and 80% less likely to know it.
The conclusion is pretty clear. Make sure you’re networking to improve the information you have and utilize relationships to get referred into a company. According to Jerry’s stats… getting a referral into a company improves your chances by 70 times!