Nudging Monsters to Help the Poor

Policy Recommendations to Catalyze Informal Sector Job Marketplaces


In particular, governments should:

1. Encourage the use of standard digital formats for job seekers and jobs, enabling friction-less and free digital interoperability among employers, job seekers, government ministries, schools and digital exchanges.

2. Expose job seeker registration data collected by government agencies to job exchanges, freely and transparently in order to lower the costs of job seeker enrollment

3. Expose digital verification APIs of government identification, school and certificate programs so exchanges can easily showcase these verified job seekers to employers

4. Avoid creating employer or customer facing digital exchanges themselves, but instead allow multiple exchanges to compete for employer revenue, with varying levels of usability, accessibility, technical outreach and placement services.

The Value of Choice in Livelihoods

Thus, in addition to the goal of creating more jobs, well-meaning governments also should strive to enhance the choice of livelihoods for all citizens. In this sense, governments and digital job exchanges, such as and, share similar goals. Namely to connect everyone to relevant job opportunities that are located where job seekers want to work, pay attractive wages and perform valuable activities for which the job seeker is currently qualified. Additionally, both share the goal of connecting employers with large pools of relevant, qualified labor.

This may sound simple to say but is in fact quite difficult in practice, with countless inefficiencies hindering the marketplace and individual choices. Job seekers are often only aware of jobs that are known to their social network. In the informal sector, centralized, accessible and searchable repositories of jobs rarely exist. Though digital exchanges may exist, informal sector workers may lack the literacy or skills to access PC-based, English language website. Employers complain of a need to hire but lack access to large pools of job seekers. Jobs and job seekers are rarely geo-coded — i.e. exactly where on earth are they — even though every job seeker wants a job with a short commute and savvy employers know that job seekers with long commutes often quit. Finally, business models that are sustainable for high-end labor — e.g. a recruiter is paid one month’s salary when an employer hires a job seeker — often are not profitable or scalable for informal sector labor.

In short, the problem of creating scale-able, compelling and effective exchanges of labor is hard one, but one with great promise and great potential value to the broader economy.

Work to date

Even when governments have created or partnered with private companies to create digital labor exchanges, these exchanges rarely have the mandate or incentive to make the exchange truly thrive. They seldom invest in intelligent algorithms to appropriately match job seekers and employers, continuous optimization their user experiences to maximize usability and accessibility on all platforms (e.g. Call Centers, automated voice systems, SMS, the mobile web, android applications and the PC web, etc), constant evolution of innovative marketing strategies to reach every business and convince them to post their jobs on the exchange and rarely experiment with new service offerings that maximize job seeker and employer satisfaction, connection, revenue and usage.

In short, governments are generally bad at behaving like an ecosystem of innovative, competing businesses, even when they engage in public-private partnerships.

Digital Exchanges for White Collar Labor

· Job seeker profile information is easily available and in a digital format. In general, job seekers fill out an online profile or registration page, meaning the marginal cost of job seeker acquisition is often just the cost of advertising and search engine optimization to attract the job seeker to the website. Compare this to the cost of registering informal sector candidates — where each job seeker’s information must be manually typed into a computer in person, from a hand-written sheet or transliterated from an un-structured Microsoft word document.

· Relatively high-degrees of trust in the job seeker data. LinkedIn’s success is certainly connected to the fact given the site is so public and much of the resume/CV data is validated by the user’s social network. Because of this, it is difficult for job seekers to lie about their true experience. This fact makes employers trust the data on linkedin. If a mechanism could validate that an informal job seeker truly was who she said she was and truly had the certificates or schooling she asserted she had, employers would value this implicit trust, would be more likely to use the exchange and pay her more.

· Employers and placement agencies pay for advertising and access to digitized job seekers. The primary business model of most large exchanges is to charge employers and placement agencies for access to their pool of job seekers and to sell advertising so that motivated employers can widely distribute their need for workers. This is only possible because the medium — the PC-based internet — is accessible and consumed by both white-collar job seekers and employers. To connect informal sector job seekers to a medium where they can access personalized job recommendations requires much more innovation, iteration and capital.

Making private job exchanges thrive while aiding the poor: Recommendations

  1. Encourage standard digital formats for jobs and seekers. Standard formats for job seekers implies that job exchanges can easily parse and digitalize data and important consume data from other sources. In particular, standard formats would allow enable job sites to easily showcase any job seeker CV or resume sent to them in the standard format. These standardized CVs could arrive from a variety of channels, government agencies, mobile applications, agents or schools as shown below; the primary benefit is it lowers the cost of job seeker registration and makes data exchange more viable, even for informal job seekers. Conveniently, the industry has already created standardized formats for Jobs, Organizations and Candidates on that government can use as a starting point.

2. Expose job seeker information collected by government agencies to exchanges at no cost or a nominal charge. As mentioned above, governments around the world already register informal sector job seekers — they just do a less-than stellar job of connecting those job seekers to relevant employers and ensuring they get hired. By making this registration information, CVs, pictures and authenticated government identification information available to exchanges, it gives the exchanges a valuable asset that they can then sell to employers. The private exchange still must spend on employer outreach and marketing, great interfaces, manual effort and algorithms to connect relevant employers and job seekers, customer service and a variety of other services but one of its core cost areas — the digitization of job seeker information — is removed, thus enabling new entrants to enter the market at lower costs. This is particularly important in smaller job markets such as the Congo or Liberia where no major digital job exchanges exist today. It also would allow existing exchanges to more easily extend their services to a now digitized pool of informal sector workers. A complaint mechanism should be put in place to ensure that exchanges do not abuse the data rights they have been granted, but given that they monetize this data, they have a clear incentive to play by the rules or risk loss of data access.

2. Enable companies — including exchanges — to digitally verify informal sector job seekers. We at find that employers want their prospective candidates to prove their identity with government issued ID and pay more to those candidates that do. Conversely, we’ve seen that job seekers who have no official identity or documents are often the lowest paid and most exploited. Hence, if governments can provide digital API mechanisms for exchanges to validate the identity of job seekers, then they can showcase and highlight these validated users, connect them to employers who will pay more for these verified candidates.


Appendix: Relevant examples

Chinese job exchanges — China aggregates jobs and makes these feeds available to private exchanges who distribute the job information. For example, MobileJobHunt leverages a feed of digitalize jobs from the Chinese government and then created customized mobile applications to ensure that their job search app was available on mobile handsets from hundreds of phone manufacturers.

Head, Int’l Growth at Founder of Dad. Believer in Tech for Good.