Knowledge Innovation

Unbound Spiral: Coordination & Social Networks

April 15, 2003 07:40 PM

I just came across a paper Job Matching, Social Network and Word-of-Mouth Communications.  It's an academic piece.  It analyses the matching between unemployed workers and vacant jobs in a social network context. While my eyes glaze there is a hidden value here.  From the abstract:

"Therefore, introducing word-of-mouth communication among network-related individuals reduces co-ordination failures and alleviates the associated search frictions. In particular, when the network size increases, on average, the unemployed workers hear about more vacancies through their social network but, at the same time, it is more likely that multiple vacancies reach the same unemployed worker. Above a certain critical value, this job overcrowding becomes so important that job matches decrease with network size."

I've been wondering how to put this in plain english.  Searchers for jobs use everything from employment boards to newspapers and personal networks including friends and former colleagues. Almost half of all jobs are filled though contacts, whom mediate opportunities and share through "word of mouth".  This job grapevine is often more effective than the more formal methods.  However, as networks grow in size the likelihood that their friends really understand what they are looking for begins to fade.  The super networker may end up with an overabundance of unsuitable jobs (a coordination error). 

Does this have implications for sites like RYZE or Ecademy? Is the simplicity of the search function creating coordination errors?  How can these networking referrals be improved, made to be more accurate and involve the contacts you know in a way in which the hidden connections uncover important word of mouth connections? From the data it appears the greater the network density the more important this becomes.