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  • 28th Nov 2018

How behavioural insights can improve employment policies and programmes

A job is more than a source of income

I graduated from university at the peak of the global financial crisis. Back then, the youth unemployment rate in Italy was over 40%. I vividly remember looking through online job boards, with no more than a handful of vacancies, mostly underpaid internships. After months of unsuccessful unsolicited applications and low skilled temp jobs, I visited a local recruitment agency.

After signing a bunch of forms, I discussed my career aspirations with an employment advisor, whose focus wasn’t to help me find a fulfilling job, but to fill vacancies, mostly replacing redundant workers on a short-term basis.

It was all very depressing. Weeks of targeted job search quickly turned into months of random, low quality, job applications. Luckily for me, a Professor from my university then told me about available scholarships for Masters and PhDs, and encouraged me to consider moving overseas.

Years later, I found myself in the office of a job service provider in the beautiful city of Sydney, speaking to employment advisors and government economists about the challenges that young Australians face in finding a job. We were brainstorming evidence-based and cost-effective solutions to improve the Australian labour market, and it was striking to spot the similarities with other countries where I had lived and worked.

Why is finding a job not as easy as getting a coffee?

I realised then that the similarities between Italians and Australians extended far beyond a love of good coffee, and rather stretched into the seemingly unrelated territory of employment policy.

For the coffee lovers amongst us, coffee shops are not all the same. But for the café owners, who the customer is matters far less than whether they pay for the coffee or not. That is because it’s the price that regulates the demand and supply of the coffee. But in other markets, prices don’t matter as much, and one cannot just choose, but must also be chosen.

This is certainly the case for labour markets. We cannot just choose the company we want to work for, because we must also be chosen by that employer. In this market, it matters a great deal what the behaviours and biases of job seekers and employers are. Also important is the way both parties interact through intermediaries such as online job boards and employment agencies.

How behavioural insights can support job seekers, employers and employment agencies

From some of the very first trials we ran in the UK back in in 2010, to our cutting-edge partnership with the Australian Government’s Department of Jobs and Small Business, we have found time and time again that behaviourally-informed solutions, when robustly tested, make a big difference to labour markets.

Our new report, Applying Behavioural Insights to Labour Markets, summarises some of the work we’ve done with partners around the world – including in the UK, the US, Singapore, Australia and New Zealand – and offers ideas for other countries and organisations interested in replicating these approaches locally. Some of the case studies in the report include:

  • Shifting from compliance to goal focused job search planning helped UK job seekers find a job faster
  • Providing job search tips, and CV and cover letter templates to Australia job seekers online helped many find employment within 4 months, whilst reducing the burden on frontline staff at employment agencies
  • Blinding recruitment increased the quality of hired candidates by employers
  • Using the right mix of social and financial incentives nudged staff at employment agencies to increase productivity and collaborate more, placing more job seekers into employment

As I look back at my career so far, I cannot help but think about those who haven’t been so lucky to be nudged in the right direction at the right time in their lives. Many of them are close friends. And anyone who’s been unemployed, or has close friends or family who have been out of the job for some time, can tell you that a job is much more than just a source of income. It gives you a sense of identity, social inclusion, and contributes to positive health and wellbeing.

From automation to the gig economy the only constant in the labour market is change. As markets evolve, and in doing so alter the patterns by which we live and work, new challenges arise.

Ultimately, it will be responsive and evidence-based policies that will make a difference to the future of workers and employers. We have good reasons to believe that behavioural science offers useful solutions to these issues that can complement, and sometimes even replace, complex labour market reforms.