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Unclogging the labour market with Big Data

Sitra's Mikko Hyttinen examines how better advertising of job opportunities could fill many of Finland's still-vacant posts.


A recent topic of public debate has been the best way to promote employment: is it to increase the demand for labour or the labour supply? What if the best way to increase the supply would be to improve the market visibility of both jobs and employees?

Finland is full of unfulfilled work; the amount of latent jobs has been estimated to be as high as 360,000. At the same time, many people dream of finding a job – any job – a new job, or the job of their dreams. Too often, open vacancies remain unfilled, because not enough time or the correct measures have been allocated to finding the right person for the job.

In the housing market, transparency increased significantly with the improved advertising of the supply through property portals. Could improved advertising also increase the demand for labour? It may well be that advertising has been the deciding factor in many property sales: “Look, what a lovely terraced house. Maybe we should move?” Perhaps the same could be applied in the labour market: “See this guy here, Pena. He seems to have the kind of expertise that we need in our new unit.”

While technology has made the management and processing of information easier and cheaper than before, the competences and resources required at workplaces are often sought through invisible means using personal networks.

How could we improve the visibility of job opportunities? By creating an advanced marketplace for labour, where everyone’s competences are showcased in order to attract potential job offerings. The way to do this is by increasing the amount, quality and openness of information concerning everyone in the labour market, including the unemployed, active jobseekers and employed persons looking to “upgrade” their jobs.

Sharing employment details would benefit everyone

A new and advanced marketplace for labour would be in the best interest of individuals and society as a whole, increasing our economic and perceived well-being. Everyone in the marketplace would be advertised and showcased for the purpose of matching them with a job that is best suited to them.

Creating such a marketplace would require a national model that would encourage everyone to make their employment details publicly available. The enthusiasm with which Finns use social media to publish their personal information and thoughts for all the world to see suggests that throwing employment issues into the mix would not be a problem.

From the perspective of employers, the model has both challenges and opportunities: it would become more difficult to retain key experts, but also easier to find new, even better employees. There would be more competition for employees, which is ideal for improving governance and the management of human affairs in workplaces. Fairness would also increase and placement in the labour market would be less dependent on chance.

Interviews, tests and references will of course continue to be necessary in making the final decision to recruit, but more broad-based information of a higher standard would help get a better picture of what is on offer, trigger hidden needs and make the recruitment process easier.

How can such a system be created in practice? First of all, it will require an attitude adjustment and a general approval of the idea that improving information and increasing openness makes matching the labour supply with job opportunities more efficient.

Such a “resource cloud” could be founded on an entity implemented under the Ministry of Employment and the Economy’s digitisation project, a kind of “open marketplace for labour”. Its goal would be to improve the quality of information and its use by the labour administration from the inside. In an ideal scenario, the resource cloud would form a widespread and decentralised entity comprising various information sources, in which the labour supply would be effectively displayed.

The digitisation project of the Ministry of Employment and the Economy is also creating a type of matching system to meet the labour administration’s needs, but which will hopefully also be introduced for wider use. The information sources could include the labour administration’s systems, information produced by individuals themselves, HR service companies, recruitment service companies, private employment agencies, social media, training providers and companies, and educational institutions. In other words, genuine Big Data. If implemented, the system would be based on obtaining the individual’s consent.

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