Web Economics
I just thought about the economic impact of the web evolution, trying to remember what I have learned years ago during study times. Also if this was not a lot it is still fun to have some thoughts about it!
It is evident that Market transparency is drastically improving with the web evolution. Being one of the elements of perfect competition which economists generally use for their theoretical models, it significantly contributes to enforce a free market economy. As a result the price will more strictly follow supply and demand.
Let's think about what consequences Recruitment 2.0 could have for companies. Differentiation between “ companies to work for” and “companies not to work for” due to their reputation in the market will grow with increasing transparency through web information. Consequently the demand to work for companies that have a good reputation increases to the extent that employers in that category have an overflow of talent to choose from.
Could this mean that for them the price of labor would drop? We already know companies today who have a compensation philosophy targeting lower market rates because they constantly have a huge talent pipeline based on their image as an employer. Would that gap get bigger? From an economic perspective the price (salary) should fall until the over supply will again exactly match the demand. Can this really be applied to human labor and corporate compensation schemes? Maybe the next generation will accord a higher priority to a fun working environment and is ready to compromise on their salaries?
On the other hand companies with a bad image would have to pay high premiums to attract people. Would that mean that employees who want to maximize their income need to go work for less attractive employers to get higher salaries?
I have no fears for Sun. Our motto is “sharing”, being open, having open standards, open software, we have an open culture inside and are even encouraged to take it outside by blogging (as you see this web page is a blogging page explicitly for Sun employees!). Our CEO Jonathan Schwartz promotes openness daily. I really enjoy working for Sun Microsystems!
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Posted at
03:41PM Nov 10, 2006
by Volker Seubert in Human Resources |
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Comments[1]
Posted by Sean Kelly on November 10, 2006 at 11:06 PM CET #