Understanding Labor Markets

Learning some basics about labor markets aids in understanding recruiting. Labor markets are the supply pool from which employers attract employees. Several methods can be used to identify labor markets. One useful approach is to take a broad view of labor markets and then narrow them down to specific recruiting sources.

The broadest labor market component and measure is the labor force population, which is made up of all individuals who are available for selection if all possible recruitment strategies are used. For firms with operations in multiple countries, the labor force population can be much larger than that of a business operating in only one country.

The applicant population is a subset of the labor force population that is available for selection if a particular recruiting approach is used. This population can be broad or narrow depending on the jobs needing to be filled and the approaches used by the employer. The applicant pool consists of all persons who are actually evaluated for selection. Many factors can affect the size of the applicant pool, including the reputation of the organization and industry, a company’s screening efforts, the job specifications, and the information available.

The availability of employment and labor, in terms of supply and demand has a significant impact on your recruitment efforts.