New study: Companies overlook unemployed candidates despite labour shortages
A new study by Associate Professor Birthe Larsen from the Department of Economics, together with researchers from the University of Copenhagen and Banque de France, has been featured in the Danish business newspaper Børsen. The research sheds new light on why many companies struggle to recruit employees despite widespread reports of labor shortages
Based on survey responses from more than 2,000 Danish companies linked with national register data, the study shows that many employers prefer hiring candidates who are already employed rather than those who are unemployed. It also finds that search costs, training requirements and matching challenges are just as important as wage costs in explaining why firms hesitate to hire.
According to Associate Professor Birthe Larsen, relying on employment status as a signal of candidate quality can make it harder for companies to find the talent they need. While employed candidates may, on average, have slightly stronger labour market outcomes, many unemployed individuals have comparable qualifications and represent an overlooked source of skilled labour.
The findings suggest that broadening recruitment practices and investing in training could help businesses address hiring challenges more effectively.
The study, What Makes Hiring Difficult? Evidence from Linked Survey-Administrative Data, has been published in the European Economic Review.
https://borsen.dk/nyheder/virksomheder/nyt-studie-virksomheder-fravaelg…