Monday, February 4, 2008

I'm listening if you are paying.

Yesterday on Marginal Revolutions feature “Markets in Everything” there is a link to a new website called NotchUp. The website pays people to interview for jobs. There is some sound economic theory behind, but is it search costs or imperfect information.

Let’s start with search costs. In simple job search economic models a person decides to look for a new job based on the potential other jobs out there that might be better than their own. But they also have to factor in the opportunity cost of their time searching. Interviews take time and time is money so pay people and they interview more. Notchup suggests this helps set up interviews more quickly making up for lost revenue of not having an employee. By using Notchup, companies avoid the cost of a recruiter, which they claim is typically 20% of a jobs salary.

So what is to stop someone from trying to take as many interviews as possible and never accept a job? Can Notchup prevent this problem of imperfect information, where the candidate know if they are serious and the interviewer does not? Notchup will try to do this with a similar function to Ebay where the interviewer and interviewee rate each other. You can also see how many interviews a person has taken. Interviewees are not paid if the company thinks they do not take them interview seriously (although there needs to be checks they don’t claim all failed interviewer were with non-serious candidates).

My guess is this will work best for executives or IT jobs, given their larger salaries and greater movement between positions.

I also wonder if the interviews are phone or in person. But after arranging visits for job candidates visiting Towson, I’m not sure you could pay me enough to do another interview.

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