The Impact of Technology on the Labor Procurement Process

Abstract

We construct a mathematical model to explore why digitization of employee recruiting process so far has not resulted in employers reporting hiring better candidates faster. We model multidimensional impact of Internet technology with increases in the total number of applications, in the rate at which applications arrive, and in departure rates of applicants. We also assume that technology leads to a stochastic decrease in the quality of the applicants. We then model a firm's recruiting process and investigate analytically and numerically the expected outcome. We show that the decrease in quality can be the dominant effect resulting in poorer outcome.