Labor market stands to benefit from online talent platforms, says report

Online job-searching and recruitment tools could reduce inefficiencies in the labor market and boost the global economy, according to a report by the management consultants McKinsey & Company.

The report estimates that within a decade, the efficiencies made possible by online talent platforms could create 72 million full-time jobs and boost global GDP by $2.7 trillion, or 2%.

Such platforms encompass traditional job-hunting sites like Monster, social networks like LinkedIn, and marketplaces for services such as the car-hire app Uber.

McKinsey estimate that increased use of online talent platforms could boost firms’ output by 9% and reduce their HR-related costs by 7%. Workers also stand to benefit from more suitable positions, better hours, and shorter periods of unemployment.

Fully realising this potential will require policy interventions including provisions for expanded broadband access, updated labor market regulations, and clearer data and privacy laws, according to the report.

The findings of the report echo Peter Kuhn’s IZA World of Labor article on online recruitment and job searching, in which he writes: “Online tools, including job boards and social networking, could significantly reduce frictions in labor markets. Much of this potential is only now being realized, as early evidence showed no friction-reducing effect… After a slow start, the internet-based job market is beginning to be used effectively.”

The McKinsey report can be accessed here.