Anyone looking to find a job in a new location knows it’s a formidable challenge. Just the logistics of visiting and relocating to a distant and unfamiliar place can be daunting. No wonder, then, that employers are more likely to hire local job seekers – those from the same metropolitan area as the job itself.
That doesn’t mean that all out-of-town applicants find relocating to be equally challenging. iCIMS data indicates that the “out-of-town penalty” varies considerably across occupations. Out-of-town applicants get hired at a rate from as low as 2.2% for secretaries and administrative assistants to as high as 20% for janitorial and related occupations. Who moves most and why?
It’s All About Skills…
Portability of skills plays a huge role in these differences. Positions in the janitorial and allied health fields (including nursing and home health aides) have the highest acceptance rates for candidates applying to out-of-town positions. Truck drivers, retail sales workers and clinical healthcare professionals round out the top five categories. These are all occupations where the skills are either common or highly standardized.
Janitors and truck drivers can perform essentially the same kind of tasks regardless of the state or city where they work, and their credentials (prior work experience and/or driver’s license) are widely recognized across state borders. The situation is different for healthcare workers, whose licensing requirements vary by state. Still, their core skills are highly regulated and more similar across locations than the variation in certifications might lead you to believe.
Moreover, the graying of the U.S. population means that the demand for healthcare workers is growing so fast that healthcare employers are being forced to reach for candidates. This dynamic is compounded by the looming retirements of older healthcare workers and healthcare educators. The U.S. Bureau of Labor Statistics estimates that 1.26 million healthcare jobs will open every year as we head into the next decade.
… But the Industry Outlook Matters, Too
In contrast, retail trade is well known to be an industry under stress right now. Paradoxically, that stress may be contributing to the high cross-border hiring rate. Strains on retailers’ finances can push them to reduce their labor costs – leading to leaner operations, more stressed workers and higher turnover. Higher turnover likely contributes to the higher rate of cross-border flows of workers, as experienced workers are let go and then seek seasonal work elsewhere.
Indeed, overall retail hiring activity actually rose throughout the second quarter, despite posting net job losses every month of 2019 since February. How does that work? Losses in payrolls come from layoffs exceeding hires, so it’s just that the former grew faster than the latter. Also, that’s at the aggregate level, across the entire industry. At the level of individual retailers, there are many who are still hiring, and they’re taking out-of-towners.
Notably absent from the top-ten list are any occupations related to software and non-medical technology. At this point, most workers have seen the writing on the wall and understand that tech is the future. Getting experience with a tech firm has become attractive enough that all kinds of people apply for these positions. Hence, a smaller proportion of candidates get hired than in other occupations. It’s also possible that some tech companies are growing so rapidly that they rely more on local talent pools than exhaustive searches.
And that’s the conundrum in a nutshell. Information overload is everywhere these days, and recruiters have it at least as bad as anyone else. Like many of us, recruiters are desperate for filters, and location is one that is both intuitive and easy on the budget. The challenge for recruiters is to look beyond the near-term budget and see value in an overlooked out-of-towner. The challenge for the job seeker is to make that value clear.
If you’d like to learn more about labor mobility, listen to iCIMS Chief Economist Josh Wright explain iCIMS’ labor mobility project.