Spatial Aspects of Recruitment Behaviour of Firms: An Empirical Investigation

Abstract

It is widely recognized that employers' hiring standards and spatial search radius are closely linked to their recruitment decisions. A strategy to identify the right people in the right place may save firms a substantial amount of effort and financial resources. Unfortunately, economic theory has often neglected this item when dealing with spatial search and recruitment issues. In this paper firms' recruitment strategies and channels of recruitment are addressed in relation to the spatial search radius for new employees. The spatial radius is linked to the employer's attempt to convey the vacancy-related information to a targeted group of potential applicants, with a focus on the distribution of the distance between the location of the firm and the place of residence of the hired applicant. In this framework, a new statistical model is developed in order to investigate the impact of different recruitment strategies—which differ with respect to both the spatial search radius and the type of information used—on the probability of a match between the vacant position and an applicant located at a given distance from the firm. The model is implemented and tested by means of an extensive micro data set on the recruitment behaviour of Dutch firms. It is found that job requirements with respect to educational level and required working experience are important elements in the recruitment procedure, as they significantly affect the spatial dimension of search. Moreover, the use of interactive information through informal communication channels seems to be effective for short-distance matches, thus suggesting the relevance of local contact networks.