OrderBoard focuses on “upside-down” job markets where the demand for talent far exceeds the supply. In upside-down markets, employers are sellers and potential employees are buyers. In some markets – data security and data science for instance – there is no unemployment – anyone who is not working is likely taking a personally chosen sabbatical.
OrderBoard measures the number of employees in such markets – everyone who could do the job to assess the “Total Supply.” However, knowing that there are 70,000 American workers who have the education, skills, experience and professional certifications to handle a particular job does not help a company hire ten of those people. What matters is the “Addressable Supply” –the number of people who are open to considering employment at a new company. The “Addressable Supply” measures the market in which a new job opportunity has to be sold.
A starting point for measuring addressable supply is the rate at which people in a particular job market move to new employers. If we examine how many people are switching jobs, and whether the rate of job switches is increasing or decreasing, that suggests the rate of job switches. If 7% of the people with a particular skill changed jobs in the past year, then the 70,000 total supply reduces to 4900 addressable supply.
That number may be further reduced by specific job requirements. A company may want people with a specific level of experience, in a certain location, at a limited cost, or with a particular degree. Each of these requirements further limits the addressable supply.
And there are personal characteristics that impact addressable supply. People are less movable at certain points in their career: after recent job changes or promotions for example. People are more movable if they have fewer family obligations as well.
Why does this matter?
Understanding addressable supply can drive recruiting strategy. Recruiting success requires a sizable pool of candidates – since just being addressable does not mean a candidate will jump at a specific offer. If the addressable supply is too small, that can provide a reason to change job requirements to increase the supply. For example, knowing where more potential candidates are located might cause a company to change its location plans.
Understanding addressable supply also can drive talent strategy. A company may start with a plan to recruit talent in an upside-down market. Understanding addressable supply could lead to the conclusion that competing for talent in the open market has a low chance of success. That company might consider focusing on training and growing internal resources or pursuing an acquisition as alternative to competing for market hires.
Regardless of the action taken, making choices based on data about addressable supply is a step towards actually treating job markets as if they are markets.