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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.

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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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AUTHORZeno Toulon
  • Sh
    24 November 2023

    I experienced periods of unemployment in March 2018 and previously in February 2005, with each job search lasting six months. During these times, compromising my professional standards or presenting myself with undue humility to prospective employers was not a strategy I pursued. This prompts a fundamental question: why should one diminish their expectations? In both instances of my layoff, the primary reason was a comparatively higher salary within my peer group, which made me a more apparent target for downsizing unless I actively embraced additional responsibilities and welcomed changes within my role, thereby disrupting established routines.

    It is evident that becoming too complacent within a role and resisting organizational changes could be significant contributors to the risk of retrenchment. To mitigate this risk, it is crucial to demonstrate a proactive approach, such as taking on new projects and adapting to evolving responsibilities. In a professional context, a lack of social networking and participation within the organization can further exacerbate vulnerabilities during periods of restructuring. Recognizing the importance of continuous professional development and an openness to change is essential for maintaining resilience in today's dynamic job market.

  • Gl
    Globe spoiler
    22 November 2023

    They think you are a bin with an empty brain...

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