Hunting for Talent: Firm-driven Labor Market Search in the United States

Research Summary: We analyze firm-driven labor market search, where firms "hunt" for talent rather than rely on workers to apply for vacancies. We leverage three approaches. We develop a model of firm-driven search and derive equilibrium conditions under which firms use this channel. We test our model's predictions using two data sources. Data from a nationally representative survey of 10,000 workers shows that the percentage hired through recruiting has increased from 4.9% in 1991 to 14.3% in 2022. This share is larger for higher-skilled workers and those with online profiles on LinkedIn. We complement this analysis with data on the near universe of online job postings from 2010 through 2020. Consistent with our model and worker survey evidence, we find firms that demand higher-skilled workers or operate in labor markets with heavy LinkedIn use are more likely to "hunt for talent."Managerial Summary: We study the phenomenon of "hunting" for talent, where firms fill open positions by searching for workers and inviting them to a recruiting process, rather than relying on workers to apply directly. We find that the percentage of workers hired through hunting has increased from 4.9% in 1991 to 14.3% in 2022. We propose that firms that rely more on high-skilled workers and/or operate within industries with a higher share of available candidates with online profiles are more likely to hunt for their talent. We find support for this conjecture using two data sets, documenting the worker and firm side of the labor market. Data from a nationally representative survey of 10,000 workers shows they are more likely to have been "hunted" by their employer if they work in an occupation that requires more skills, or if their industry has more candidates with online profiles. Moreover, data on US-wide job postings over the past decade shows that firms in need of highly skilled workers are more likely to invest in outbound recruiting capabilities.