The DHI-DFH Recruiting Intensity Index quantifies the effective intensity of recruiting efforts per vacancy by employers with vacant job positions. It captures the impact of advertising, hiring standards, compensation packages and other employer actions that influence the pace of job filling. The index construction follows the method developed by Steven J. Davis, R. Jason Faberman and John Haltiwanger in “The Establishment-Level Behavior of Vacancies and Hiring” in the May 2013 issue of the Quarterly Journal of Economics.
The pace of new hires in the economy depends on the number and type of job seekers, the number and type of job vacancies, and employer actions that affect how quickly vacant jobs are filled. These actions include the choice of recruiting methods, expenditures on help-wanted ads, how rapidly employers screen job applicants, hiring standards, and the attractiveness of compensation packages offered to prospective new hires. The BLS Job Openings Rate captures the availability of job vacancies in the economy, whereas the DHI-DFH Recruiting Intensity Index captures the effective intensity of employer efforts to fill those vacancies. The index is available at the national, regional and industry levels.
The index construction follows the method developed by Steven J. Davis, R. Jason Faberman and John Haltiwanger (DFH) in “The Establishment-Level Behavior of Vacancies and Hiring,” published in the May 2013 issue of the Quarterly Journal of Economics, and extended to industry and regional indices in “Recruiting Intensity during and after the Great Recession: National and Industry Evidence,” published in the May 2012 issue of the American Economic Review.
DFH estimate the relationship between recruiting intensity per vacancy and the employer-level hiring rate using hundreds of thousands of establishment-level observations covered by the Job Openings and Labor Turnover Survey. Given this estimated relationship, DFH recover the mean effective recruiting intensity per vacancy in the U.S. economy from published data on the U.S. hiring rate. The hiring data are available in the monthly releases of the BLS Job Openings and Labor Turnover Survey. DFH apply the same method to produce regional and industry-level indices of recruiting intensity per vacancy.
DFH undertake several exercises to validate the performance and information content of the resulting recruiting intensity indices. For example, they show that applying the DHI-DFH Recruiting Intensity Index improves on the standard economic model for tracking (a) the rate at which employers fill vacant jobs and (b) the rate at which job seekers find new employment positions. They also show that the DHI-DFH Recruiting Intensity Index accounts for a substantial fraction of movements over time in the national hiring rate, and that it yields a more stable Beveridge Curve relationship between unemployment and (effective) vacancies. See their scholarly publications here and here.
The DHI-DFH Vacancy Duration Measure quantifies the average number of working days taken to fill vacant job positions. The measure follows the method developed by Steven J. Davis, R. Jason Faberman and John Haltiwanger in “The Establishment-Level Behavior of Vacancies and Hiring” in the May 2013 issue of the Quarterly Journal of Economics.
Vacancy durations depend on the relative numbers of job seekers and job vacancies, the recruiting and search methods available to employers and job seekers, employer recruiting intensity per vacancy, the search intensity of job seekers, and the degree to which the requirements of jobs on offer match the skills, locations and preferences of job seekers. Other things equal, a larger ratio of job vacancies to job seekers yields longer vacancy durations.
The DHI-DFH Vacancy Duration Measure follows the method developed by Steven J. Davis, R. Jason Faberman and John Haltiwanger (DFH) in “The Establishment-Level Behavior of Vacancies and Hiring,” published in the May 2013 issue of the Quarterly Journal of Economics. That method combines a simple model of hiring dynamics with data on hires and vacancies from the Job Openings and Labor Turnover Survey (JOLTS) conducted by the U.S. Bureau of Labor
Statistics. Using their model and the JOLTS data, DFH estimate an average daily job-filling rate for vacant job positions in each month. Taking the reciprocal of the daily job-filling rate yields the DHI-DFH Vacancy Duration Measure, which is available at the national, regional and industry levels.
The average daily job-filling rate is closely related to the “vacancy yield,” the ratio of hires during the month to the stock of vacancies on the last business day of the previous month. Unlike the vacancy yield, however, the daily job-filling rate (and the DHI-DFH Vacancy Duration Measure) adjusts for job vacancies that are posted and filled within the month. Working days are defined as Mondays through Saturdays, excluding major national holidays.
