Need Good Help? Try A Job Auction

by John Martin
October 20, 2003

At some time or another, nearly everybody has heard people complain, "You can't get good help any more." They claim to have tried to hire people time after time, and they would not work -- at least not satisfactorily.

This song and dance is sometimes true. We occasionally see people on roadsides holding signs that say, "Will work for food." Researchers have done experiments with these people and have verified that only about one in ten is willing to do much work; the rest just want money to buy cigarettes, beer, drugs, or tricks with prostitutes.

But on the other hand, there are many other people who are serious about working -- if they can find opportunities.

In the last two years, this problem has become much more acute with a nationwide unemployment increase of 50% -- from 4% to 6%. And that's just the people who are officially unemployed -- the ones drawing benefits. The actual number of people looking for jobs could very well be three or four times that percentage.

The usual channels for finding work are not very effective. Many people spend a great deal of time and money sending out resumes; some send out hundreds. Obviously, the vast majority just get thrown into the trash. A few get a quick lookover. Once in a while, somebody gets lucky and lands a job. But the odds are not much better than buying a winning lottery ticket.

Another strategy is to go to businesses and ask for work. An applicant can do this for months and never find an offer, even one for minimum wage. Employers who have had their fill of lazy and incompetent workers are usually reluctant to hire anybody they don't already know very well. Some establishments even put up "No Help Wanted" signs to discourage floods of applicants.

Looking through want ads is nearly always fruitless. Although there are usually many "jobs" offered, they nearly always fall into one of four categories:

1. Distant locations that either exceed reasonable commuting or re-location costs or have high living expenses;

2. Risky "business opportunities" where each job-seeker must put up a thousand dollars or more up front to "invest" in a highly speculative "business" that is almost certain to fail;

3. Door-to-door sales or telemarketing jobs that pay no salary -- only small commissions on how well the applicants can slick-talk unsuspecting people into buying overpriced or useless products;

4. Jobs offered by employment agencies that normally charge stiff, up-front fees (typically about 10% of a year's salary) that are due as soon as the applicants accept the jobs.

Many people look to the federal, state or local governments for employment. This seems logical since most governments typically pay anywhere from 10% to 100% more than the private sector pays for the same positions, and on top of that, the holidays, fringe benefits and retirements are usually much more generous.

Applicants normally apply for government jobs by taking written examinations. But if one has any illusions that making a high grade -- or even the top grade -- on one of these is a ticket to a good job, he is in for a rude awakening after repeatedly making scores in the 90's for years and never once getting an offer. Of course a high score has weight in an employer's decision, but the sad truth is that other hidden factors carry much more weight and usually make the decision on who gets employed. I have been told that an applicant for a state job must be one of the top ten scorers, BUT the functionary who does the hiring can choose any of these top ten and frequently chooses someone other than the top scorer. What are these "other hidden factors?" I have been told that the courts have imposed certain racial and ethnic mixes, and anybody who is not either a buddy of somebody in a high place or a member of a "preferred" race, ethnicity or sex is out of luck. And because government jobs pay so well, the competition is fierce.

The vast majority of jobs -- especially the better and higher-paying ones -- are obtained through family members or close friends. The only problem with it is that many people have no families or friends who are in positions to offer anything. Many of them are no doubt looking for jobs themselves.

The one thing that makes getting a job such a difficult task is that the decision to hire is made by someone else. A person can literally spend years of his time and labor just to get a suitable person to make a simple decision, "You're hired." Unfortunately many employers frequently use illogical critera in their decisions to hire. This is evidenced by the sizable numbers of ill-suited and incompetent employees we see all too often and equally sizable numbers of bright, educated, skillful and dedicated people who are either looking for positions or working at menial alternatives just to survive.

So what is the solution? It can be done with a job auction. It will provide good workers at reasonable rates, and best of all, it is totally free market.

A job auction can fill nearly any kind of position -- specialized or unskilled -- permanent or temporary. A job auction can be held at any auction house willing to give it a try. Most auctioneers should have no problem with it since it will generate extra income.

As an alternative, an employer can hold his own auction. He has the advantage of controlling the auction. A disadvantage is lower visibility, and fewer job applicants are likely to see the job offers. The employer would have to do some extra advertising.

How would a job auction work? In an ordinary auction, an auction company allows various people to bring their stuff to be sold at whatever prices the top bidders are willing to pay. Many companies allow each seller to put a "pinch" or a reserve minimum price he is willing to accept on a few of his choice items. The auctioneer gets a percentage of the selling prices as his fee (typically 15%), and the sellers get the rest.

A job auction would be a bit different. The people who want to hire workers would bring in descriptions, expected salaries and qualifications of the jobs they are willing to offer. These would be posted on a bulletin board at the auction house for a reasonable length of time for job seekers to look over.

The auctioneer's fee could be paid by either the employer or employee and determined by prior agreement. Since selling jobs costs the auctioneer no more than two or three minutes each, he can make good money with very small commissions -- $5, or at most $10, per job. Once established as a good job auctioneer, he might later command $15 or $20 per job and make selling jobs the most profitable part of his auction.

The best time to run the jobs would be at the beginning of the auction, since many applicants would not be willing to wait for hours for other things to be sold for a shot at one or two jobs.

A typical job auction might have 10 or 20 jobs. The auctioneer would begin by announcing the jobs available and the order they are to be run. He would describe each job like he describes any other item for sale.

The best arrangement is to start with the highest-paying jobs that have the most stringent qualifications. This gives the applicants opportunities to bid on alternatives if they miss out on their first choices.

Salaries could be expressed as per hour, per week, per month, or per year. Temporary or short-term jobs would normally be expressed as per hour.

Since applicants will bid on salaries, the bidding would go downward rather than upward. The bidding would begin at the highest salary the employer is willing to pay -- or if bidding is sluggish, at a higher level where the employer can "reserve" a lower maximum salary. Once a bid is made, the auctioneer asks for a lower bid and continues until no more people are willing to bid. The lowest bidder will get the job and will be paid the wage that he bid.

If the offered salary is initially too low to generate an opening bid, the auctioneer can ask the employer if he might want to start at a slightly higher figure. The employer can then decide if he wants to offer a higher salary or re-run the same job at a later date when a bidder might be willing to settle for his original salary offer.

One might think that a person who is willing to work for a lower salary than one who wants more would not be as capable an employee. That might be true in a few cases, but if somebody is willing to take a job for a lower salary than someone else, he obviously has a greater need for the job and its salary, and he will therefore work as hard or harder than another person who needs it less.

One might be tempted to ask how employers can expect to get qualified employees. The obvious answer: Any serious applicant is going to read the job qualifications and know what he can and cannot do. He is going to bid on jobs he knows he can do. He knows that if he gets a job he cannot do, he will only founder after the first day or two at work, and the employer will not keep him. The employee will gain nothing but embarassment and ridicule. The same applies to anybody who has no intention of working and just wants a free paycheck. Nearly all applicants will be serious since there is nothing to be gained by doing otherwise.

Employers should allow all interested people to bid on their jobs. They should not reject or screen applicants. If they want specific qualifications like non-smokers, they should state these on the job descriptions and let the bidders know they will not be kept if they are hired and don't maintain these requirements. Paperwork should not be required until after one is hired, and even then it should be brief and simple. Employers should never ask personal questions or demand excessive or frivolous qualifications that have little or no value in their work environments.

Employers should not demand work experience or require employment histories. Instead of so much "experience," they should look for what the applicants can actually do. The applicants know, and the employers should trust them to bid accordingly. With occasional exceptions, they can expect winning bidders to be competent and do satisfactory work. An employer can turn away any applicant if his performance is anything less, and they both know it.

Sometimes an employer will be willing to pay a higher salary to get the very best applicant. This can also be done in the manner of a job auction. In this case the employer, at his own place of business, gives all the applicants a written test, a practical test, or both. These are much more effective in determining potential performance than typical time-consuming job applications that demand all too lengthy lists of previous employers, dates, and privacy-invading questions.

A test does not have to be complicated. For example, if somebody is applying for a job as a carpenter, give him a circular saw and let him cut a few boards; give him a hammer and let him drive some nails, etc. Any employer -- large or small -- can devise and administer suitable tests at little or no expense. Test all the applicants, and the one with the best score and best demonstration of performance gets the job.

A job auction has the advantage of changing turnover from a liability to an asset. Employers who hire through the usual channels dislike it because it consumes a great deal of time to interview new applicants. But job auctions make turnover a breeze, and an employer with an unexpected vacancy can hire a new hand at the next week's auction.

Turnover is also advantageous to the employees. High turnover allows them to more quickly gravitate toward the positions for which they are most qualified and best suited.

One more advantage of a job auction is that it is discrimination-proof. It has no favoritism for race, age, sex, national origin, or any other trumped-up factors bureaucrats might conceive. It is equal opportunity at its zenith. Every bidder gets a fair and equal shot at a job, and the one who actually gets the job is nearly always the one who needs it the most.

A job auction is a win-win situation. The employer gets a first-rate worker at an acceptable wage with a minimum of time and expense. The job-seeker has a stronger voice in the decision to hire and a better and fairer opportunity for a good job with a salary he personally approved without the fruitless searching through ads, knocking on doors, filling out paperwork, or putting up with overpriced, time-consuming employment agencies.

John Martin writes from Elmore County.

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