The Role of Internet in Labor Markets
The Internet has dramatically changed the way people solicit talents and search for jobs. The exponential growth of online labor markets in recent years enables millions of workers to get hired and deliver jobs online. The advancement of various online channels also facilitates job seeking in traditional labor markets. More and more executives are relying on social media for personal branding to enhance their career prospects. Given the prevalence of these online platforms, it is crucial for us to understand their social and economic implications, write Assistant Professor WANG Jing and CHEN Yanzhen at the Department of Information Systems, Business Statistics and Operations Management, HKUST Business School.
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Hiring preferences in online labor markets (by WANG Jing)
In the last few years, we have witnessed a rapid growth in online labor platforms. These platforms (e.g., UpWork, freelancer, guru) serve as an intermediary for employers and workers by hosting a myriad of jobs ranging from software and web development to administrative support, multimedia design, and writing and translation. As the entire process does not require any offline face-to-face interaction, these platforms are able to attract and retain a large pool of global workers. Many large enterprises such as Airbnb, Dropbox, Samsung, Accenture, and P&G are shifting their contingent workforce to online labor platforms to reduce costs and save time. It is projected that online labor markets will grow to a US$23 billion industry by 2020.
Given the enormous scale of online labor markets, an interesting question to ask is whether systematic gender hiring biases are present. Gender hiring biases have been studied extensively in traditional labor marketplaces. The majority of past studies in offline settings reveal that employers prefer to hire males over females even when they have similar characteristics. Yet, the distinct aspects of the online environment can influence the way employers perceive and utilize gender cues in the hiring process, leading to hiring considerations that are distinct from traditional settings.
In a recent study, Professor Jason CHAN and I [WANG Jing] investigated whether gender-related information would influence hiring outcomes in online labor markets. Utilizing machine learning techniques via name and picture recognition, we were able to infer workers’ gender from their names and profile photos for our empirical analysis. We analyzed the detailed data of a total of 264,875 job postings that solicited more than 5.7 million applications from a large online labor platform in 2012-2013.
We found that the odds of a female applicant being hired were 13% higher than those of a male applicant. Sub-analyses show that women are preferred in feminine-type occupations while men do not enjoy higher hiring likelihoods in masculine-type occupations. We also found that the observed hiring bias is only present for workers from developing countries, and diminishes as employers gain more experience on the platform. By conducting an online experiment, we showed that our findings were likely to be driven by the fact that stereotypical feminine traits of trustworthiness and cooperativeness help overcome uncertainty and opportunism within the online market.
Technology reshapes job seeking strategies (by CHEN Yanzhen)
Since Tom Peters coined and popularized the term “personal branding” in his now classic article “The Brand Called You”, the idea of personal branding (PB) has been extensively discussed and exploited by practitioners. In the age of traditional media, PB was often the luxury of celebrities and leaders in business and politics. However, the arrival of the Internet era has fundamentally changed this inequality. Nowadays, physical proximity in social interaction is no longer a necessary condition. The rise of social media technology in the past decade has further democratized the power of PB. Today, PB is within reach of almost anyone through social media. As Tom Peters argued, in the age of individualism, everyone has the power to be their own brand, the CEO of Me Inc.
Social media platforms such as Twitter have turned this inspiring concept into a powerful technology within reach of almost everyone. Job seekers could potentially benefit from PB on social media by increasing their eminence and thus boosting their careers. For managers, PB is probably even more important, as was argued in a recent Forbes article that concluded: “Personal branding is no longer an option; it’s a powerful leadership enabler.” However, the same article also emphasized that PB on social media is a full-time commitment to the journey of defining oneself as a leader and should be carefully thought about beforehand. Similarly, a recent article in MIT Sloan Management Review argued that CEO tweeting can benefit the company an employee works for in different ways, but also carries an inherent risk.
To understand the impact of social media self-branding strategy on job market performance, Professor Huaxia RUI, Andrew WHINSTON and I [CHEN Yanzhen] conducted a study following S&P 500 executives’ career path for four years. We drew on examples from the Twitter feeds of these senior executives. Not surprisingly, similar career-related contents crop up repeatedly in the postings of individuals keen to publicize their views and enhance their career prospects in this way.
We found strong evidence that strategic use of social media to disseminate opinions and polish one’s image does pay off for those aiming to move into/stay in C-suite or equivalent roles, especially when their relative performance in their most recent employment did not go well. In the recruiting process, such a strategy can be more salient in particular markets, such as the CEO and CMO (Chief Marking Officer). Additionally, once an executive becomes employed in a given position, self-promotion on social media can enhance their opportunities for a raise. For example, according to our results, self-promotion can increase a CMO’s compensation by up to $95,256 to $129,924, depending on their past performance.
Besides the inspiration of utilizing social media personal branding in job acquisitions, our study also revealed the firm preferences on other perspectives of a candidate such as education, recent performance and social capital, which could also be particularly useful for job candidates.
Our Thoughts on Future Labor Markets
Nowadays, organizations are starting to rely on the online workforce (aka, the human cloud) as a scalable and cost-effective way to address their business requirements. Online labor platforms hold great promise for eliminating skill shortages, reducing the unemployment rate, and attracting talents who prefer flexible work schedules (e.g., millennials, parents with young children, workers with disabilities). In future, more and more jobs that were traditionally filled by full-time employees will be split into many small tasks, and then scattered into a virtual cloud of on-demand workers who can work anywhere in the world at any time. Given the enormous potential of these platforms, employers’ hiring decisions between workers in different demographic groups deserve significant attention from scholars and practitioners, as these decisions can impact the distribution of job opportunities and the incomes of millions of workers worldwide. As this new labor market gains popularity among business managers and workers, it is imperative for policymakers to develop a set of guidelines and regulations to enforce labor equality and achieve more socially optimal hiring outcomes.
As for remaining full-time employees in the future, job candidates cannot afford to miss the evolving role of technology empowered personal branding in their job searching strategies. Online self-promotion channels such as social media create a level playing field for every job candidate rather than the privileged few. In this looming new age of technologies, we believe job seekers who are open to, and can harness, new technologies to augment their abilities are likely to survive and thrive.
