Hysteresis in Action: Firms Allowing Recruiting Functions To Wither

A blog about business and economics.
Jan. 28 2013 9:45 AM

Hysteresis in Action: Firms Allowing Recruiting Functions To Wither

148129022
A job-seeker holds a flier before meeting with a recruiter in San Francisco

Photo by Justin Sullivan/Getty Images

"Hysteresis" is a funny-sounding word for a funny-sounding problem—when a spell of cyclical unemployment goes on for a long time, the structural level of unemployment goes up.

The reason this happens is that matching workers with jobs isn't a trivial task. If a single parent or both adults in a two-parent household are going to work, there needs to be child care arrangements for the kids. Firms with openings need a way to communicate the existence of job openings to potential applicants and then screen them in an efficient way. Yet as high unemployment persists, the tendency is for these matching functions to wither away. And that's the right way to understand Nelson Schwartz's piece about companies increasingly relying on internal referrals to fill new positions, thus locking the long-term unemployed and those without connections out of jobs.

Advertisement

After all, running a recruiting operation is a cost of doing business. If you're able to fill all the jobs you need filled without running one, then why bother? If the unemployment rate were 5.5 percent, then the point of running a recruiting operation would be that it's cheaper than constantly offering everyone raises so that nobody ever quits. But when the unemployment rate's been lingering above 7 percent for years, it makes more sense to focus on cost-cutting rather than expanding your labor pool. But as companies disinvest in recruiting functions, people who are isolated from the labor market become even more isolated.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Doublex

Crying Rape

False rape accusations exist, and they are a serious problem.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B

How Will You Carry Around Your Huge New iPhone? Apple Pants!

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

Television

The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

Lifetime Didn’t Find the Steubenville Rape Case Dramatic Enough. So They Added a Little Self-Immolation.

No, New York Times, Shonda Rhimes Is Not an “Angry Black Woman” 

Brow Beat
Sept. 19 2014 1:39 PM Shonda Rhimes Is Not an “Angry Black Woman,” New York Times. Neither Are Her Characters.
Behold
Sept. 19 2014 1:11 PM An Up-Close Look at the U.S.–Mexico Border
  News & Politics
Weigel
Sept. 19 2014 9:15 PM Chris Christie, Better Than Ever
  Business
Moneybox
Sept. 19 2014 6:35 PM Pabst Blue Ribbon is Being Sold to the Russians, Was So Over Anyway
  Life
Inside Higher Ed
Sept. 19 2014 1:34 PM Empty Seats, Fewer Donors? College football isn’t attracting the audience it used to.
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
  Arts
Brow Beat
Sept. 19 2014 4:48 PM You Should Be Listening to Sbtrkt
  Technology
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Medical Examiner
Sept. 19 2014 5:09 PM Did America Get Fat by Drinking Diet Soda?   A high-profile study points the finger at artificial sweeteners.
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.