This is what happens when you look for a job while unemployed
After a long year of layoffs, the financial services job market is awash with people who are out of the market. By our count (using data from recruitment consultancy Morgan McKinley), there are around 40,000 more new jobseekers than new jobs this year in London’s financial services sector alone.
Finding a job when you're out of the market is never easy. “Why don’t you have a job? Is something wrong with you? We’re sure as hell not going to give you a job,” is the typical reaction from putative employers. But a new research paper published by the IZA – Institute of Labor Economics in Germany suggests there's more to it than that.
It turns out that the longer you're unemployed, the less motivated you are to find a new job. “As the unemployment spell progresses, job seekers send fewer applications, have lower chances to be invited to a job interview," say the researchers.
Worse, the longer you're unemployed, the less likely it is that the applications you send will result in an interview. The researchers found that whilst the average jobless person makes 11 applications in their first month of unemployment and 10 in months 12-15, their chance of getting a job interview out of an application halves from the start to the end of this period (from a 5% chance in month 1 to a 2.5% chance in months 12-15).
Turns out there's a negative feedback loop. "Our model emphasizes that negative search outcomes make jobseekers more pessimistic about their own labor market prospects,” the paper says. Ouch.
And yet, it's not all bad. Once you hit rock bottom and start applying for the sorts of jobs you would never have applied for initially, you may have some success. - The researchers found that while only 20% of people got job offers from interviews in the first month, this had risen to 25% by months 12-15. “The long-term unemployed widen their (occupational and regional) search radius and end up applying to jobs that are less likely providing a good fit," postulated the researchers.
In other words, just lower your standards. It's a difficult message, but something people being let go by Citi today, and from Credit Suisse, Goldman Sachs and Morgan Stanley previously might find helpful in 2024.
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