Blog Archives

Liquidity in Job Markets

For the past month or so, I have been  looking at job postings in my field of specialization – Geotechnical Engineering – across the US and Canada. During my searches, I noticed some general trends that the companies exhibit when it relates to the expectations and/or qualifications of the candidates they want. Most are what is to be anticipated for the corresponding position. But of all the different expectations listed, one particular aspect has many interesting collateral impacts for the overall job market. And that is the requirement of Experience.


In general, I noticed the following breakup in the job postings (I do not have hard numbers, but a constant exposure to the postings will pretty much confirm this):

  • Senior Geotechnical Engineer (40% of available positions): 10-15+ years of experience.
  • Intermediate Geotechnical Engineer (30-35% of available positions): 5-10 years of experience.
  • Junior/Entry Level Geotechnical Engineer (25-30% of available positions): 0-3 years of experience.

At first glance, the above description appears to be rather innocuous. A direct correlation between seniority of position and expected level of experience from the candidate is fairly obvious and definitely warranted. But this does not provide the complete picture. What needs to be looked at is that about 70% of jobs in the market are only for candidates who have experience in the range of 5-15 years or more. So what does this imply?

First, we have to understand where the labor supply – all experience levels – comes from and where they are currently and where they will be in the future. In the field of Geotechnical Engineering, I can think of a few hundred people graduating with a Master’s degree every year in the US, and a Master’s degree is pretty much a requirement for a career in Geotechnical Engineering. So that means there is a constant supply of maybe 200-400 eligible candidates every year for the Junior/Entry Level positions. For the sake of discussion, let us assume that all these graduates get an entry level job. (From my own experiences in trying to hire entry level candidates for my company, I can say that the demand exceeds supply. So this assumption is valid). And let us also assume that most, if not all, of the demand for the entry level/junior Geotech positions is fulfilled. So far, so good.

But this is where the fun starts. Because you see, unlike the constant supply of eligible graduates for Junior/Entry level positions, there is absolutely no such supply for the Intermediate and Senior level positions. The people graduating from colleges are unemployed and actively looking for entry level jobs. Companies are also actively looking to fill their junior/entry level positions. So there is a constant match between demand and supply for the entry level jobs.

But there is no such connection available between eligible candidates and the Intermediate/Senior positions. The ‘eligible’ candidates for these positions are typically already employed and lack any incentives to change jobs. The lack of incentive only increases with a person’s experience. That is, the longer a person spends time in a city or a company, they are unlikely to move away from either or both. People develop professional connections, drop roots in a community, buy houses, start a family and get settled in one place as they progress in their career.

If anything, the factors listed above only contribute to a ‘cost’ for the person if they were to consider changing companies and/or cities. And any company looking to hire for an Intermediate/Senior position will have to ‘compensate’ for that cost in some visible form – higher salary, higher position, faster career growth, better living/working conditions, etc. And it is not sufficient for the company seeking to hire the candidate to be just ‘better’ than the candidate’s current employer. They will have to be ‘significantly better’ since they will have to provide additional compensation for the ‘cost’ the candidate has to pay to change jobs.

All this points to a job market where the entry level positions are continuously filled and the intermediate/senior level positions are hard to fill. Most of the intermediate/senior level jobs typically stay open for a long time (several months). Anyone can login to any job platform and see this for themselves. In spite of this, one cursory look at the tone and content of the job posting requirements for intermediate and senior level positions reveals such a sense of idealism on part of the company seeking the candidates. There are typically such a large number of specific requirements listed for a candidate in these positions, one has to wonder exactly how successful are these companies in hiring people for this level?

And that is not even a rhetorical question from my side. I am genuinely interested to know what the success rate is for companies seeking to hire intermediate and senior level positions in a specific high skilled profession. What percentage of these positions actually get filled? How long are they typically open for? Do the recruiters ever relax their requirements? Do they promote someone from within the organization and/or give them additional responsibilities? Are the recruiters even aware of the nature of the job market? What do they do when they absolutely need someone?

Or in other words, exactly how liquid is the job market at the intermediate and senior positions for high skilled professions? 

These questions take me to yet more interesting aspects/impacts on the overall job market. In an illiquid job market, what does job creation even mean? Exactly how valuable is experience for a given role? How would/should one define skills shortage? And how should this be addressed? What should be the role of immigrants in such a situation?

These are questions I seek to address in future posts. Stay tuned.