Posts Tagged Informal job market
Remember your senior year in college? If it was a good one, maybe you don’t remember much. However, at some point you started looking for a job. If I were a betting man, I’d guess you did a few of the following:
- Visit career sites like Monster.com or Careerbuilder.com
- OR maybe you knew those sites were black holes and visited a site with slightly less traffic like craigslist.org thinking you were outsmarting the others.
- Search by general terms like “finance” or “sales.”
- Briefly scan the actual job description and focus on salary and requirements. Who cares what the job does if it pays well?
- Address your generic cover letter to “Whom it may concern” or “Human Resources.”
- Click submit and repeat half a dozen times per day.
- Play video games and beer pong while you wait for your phone to ring.
That’s how most of us, myself included, used to apply for jobs. What I just described to you is called the formal job market. And believe it or not, some of us are still trying to find jobs this way (minus the beer pong).
But what if I told you that only 20% of jobs get filled this way?
The Informal Job Market
Despite government’s best efforts at bankrupting our country to lower unemployment, it remains a rock solid 9.1%. Throw in the other folks working part-time wishing they had full-time work, plus the people working at a job they hate, but are too afraid to leave and that figure increases dramatically.
This post originates from an article I read on Tim Ferriss’ Four Hour Workweek blog. It was a guest post written by Michael Ellsburg, author of the book The Education of Millionaires: It’s Not What You Think and It’s Not Too Late. He describes the informal job market as “all jobs that are not filled through someone responding to a job advertisement. Usually, these are jobs that are filled through relationships.”
More gold from Michael here:
Either there is a position at the firm that needs to be filled, and an employee at the firm knows someone who’s qualified. Or, the firm wants to bring a specific person they know to join the team, and they create a position for that person out of thin air. If you do some Googling on the informal job market, you’ll learn something shocking: according to various estimates (on CNN, CBS, MSNBC, and NPR) somewhere around 80% of jobs get filled informally. In other words, only 20% of jobs get filled through people responding to job ads (the primary method of job seeking most people do).
So, how does the 80% of hiring that occurs in the informal job market actually happen? The way Eben did it: by building up a professional relationship with people within the organization doing the hiring, long before the hire is made.
Connections. Referrals. Knowing people who know people.
This means that, in the vastly larger informal job market, human relationships and a solid network are far more important than GPA figures on a resume.
The 80/20 rule is back. 80% of us are trying to find jobs in the formal job market, which produces just 20% of the hires. What if you focused your search where 80% of the hires are made and the competition is much, much less?
What Should I do?
To get started with your job search, tell everyone you know you’re looking for a job. The more specific you are about what you’re looking for, the more helpful your friends and family can be.
Second, find 4- 5 companies you’d like to work for, then work backwards. Study up on them. What are their needs? Are they struggling with anything? Usually we search for the job first, and the company is secondary. Sounds kind of backwards, don’t you think? We should put at least equal weight on the place we’ll be spending 50 hours a week at for the next few years.
Third, what are your skills? How can you help these companies? Before you meet with anyone, watch this video by Ramit Sethi where he describes his briefcase technique.
Fourth, use your network to get your foot in the door with someone at these companies. Linked In is huge asset for this. Somehow, someway get in front of a player you can prove yourself too. Buy them coffee, a beer, lunch – something. Then form a relationship with them.
Remember: People love talking about themselves. Showing a little interest goes a long way.
Finally, make sure you stay in touch. Even if they don’t have something at that moment, stay in contact by sharing articles they might find interesting and give updates on cool projects you’re working on. They may refer you to friends who have openings at their companies.
The MBA and MA are BS
There is value in the MBA and a Master’s degrees, if you’re doing it for the right reason. Getting an MBA so you’ll be qualified for jobs is not the right reason though.
Let’s think about this for a second. Check out this “basic qualification” I found in job description:
“MBA degree – Top Tier school preferred”
If you see similar requirements over and over again it’s natural to think you need one. But guess how much an MBA at Columbia costs?
Gulp. That is a lot of money for one bullet point in a job description.
This is another big reason the informal job market is so important. Going back to Michael’s article, he says this:
So let’s get clear about one thing. Saying that a BA and MA is “required” to do a certain job is BS. These degrees are not actually required to do the job well. Rather, they serve as convenient screening tools for recruiters needing to wade through piles of cold resumes on the formal job market. That’s it, nothing more.
Your entire multi-year, six-figure education is reduced to a simple check-mark used to get past impatient screeners on the other end of a Craigslist ad.
For a person seeking a job or economic opportunity, this whole system of job screening is wildly inefficient.
What if instead, you focused on the informal job market, which is vastly larger and more accessible (especially if you learn some basic networking skills)?
People like to give economic opportunities to people they know and trust. Requirements be damned.
Right or wrong, men tie a lot of their worth to their jobs. It gives us a sense of purpose, and when a job is taken away part of our pride goes with it. This shouldn’t really be the case, but if it is you may as well do something you care about. An informal job search can get you there.
I admit it’s tough out there, and if you have a mortgage and family it’s harder to think about leaving a job you hate. And it sure seems like it’s going to get worse before it gets better. But recessions our cyclical and we’ve been through them before, and we’ll go through them again. Think for a minute though about the person you will be in 20 years.
Will the older you be happy you got scared in a tough job market and blew $150K on a degree to avoid job hunting in a bad economy? Or you stayed at that crappy job just because you were too afraid to leave the security of your current one?
What’s the worst that can happen? You get fired six months after joining your new company? Not only is that highly unlikely, but by reading this post and Michael’s article as well as your own research, you have a leg up on 80% of job hunters for your next search.
Think about what you’ll feel in 20 years as opposed to what you’re feeling now. It will probably change your decision-making. At the end of the day, we are responsible for our own careers and the income we make. We can go about it like everyone else and be average, or we can be anything but.
I’d love to hear your thoughts and questions on this post and any other job tips you can share with Ag readers. I’m also happy to help with your own search in any way I can. Again, you can read the article by Michael Ellsberg here.