A SIMPLE SOCIAL NETWORK ANALYSIS

OF AUSTRALIAN IT AGENCIES 7/1

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PURPOSE OF THIS ANALYSIS

The purpose of this analysis is exploratory to see what insight a Social Network Analysis of sites generated from seeding 100 IT Agencies into a Webcrawler (VOSON). I am primarily interested in looking at relationships between agencies in terms of what value it gives to the IT position seeker (job or contractor) and the client seeking to fill a position. The Webcrawler came back with over 17000 web links spread out over agencies in several countries. The Social Network graph for that dataset is on the right.

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WHAT IS THE CURRENT THINKING ON THE VALUE OF JOB AGENCIES

AND JOB BOARDS.

A QUOTE FROM DAVID AUTOR – ‘THE ECONOMICS OF LABOUR

MARKET INTERMEDIATION’

His Research Question

‘Labour market intermediaries have been around in various guises for centuries, as labour unions, craft guilds, and occupational licensing boards. But they have also gained prominence in contemporary incarnations as temporary help agencies, Internet job search boards, and centralised job-matching institutions like the ‘medical match’ that allocates physicians completing medical school to medical residencies. The venerable history and continued re-emergence of intermediaries in various forms raises the question: what precise economic function do these institutions serve? And are they likely to improve labour market operation or merely tax it?’

His Conclusion

‘Despite widely heralded advances in the technology of job matching, I anticipate that labour market intermediaries will continue to address, ameliorate, and exploit the imperfect environment in which workers and employers interact.’

What David is saying – is the intermediary (job agency and job board) offers a valuable service; however they will also milk the system for all it is worth.

http://www.voxeu.com/index.php?q=node/2500

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WHAT WOULD MAKE A HIGH VALUE

AGENCY FOR JOB SEEKER

In theory the highest value for a individual job or

contract seeker would come from an agency that

had the highest networking characteristics for their

industry . This would be characterised by a large

number of inward and outward links from other

agencies sites or a central role in the network

indicating access to a wider and more reliable view

of the job or contract market. This is in theory also

true to the client seeking to fill a position who is

best served by a near transparent market where

the those seeking and those hiring know well the

market characteristics and movements. At present

I do not believe this is not the case.

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A GRAPHICAL VIEW OF THE LINKS BETWEEN

AUSTRALIAN IT EMPLOYMENT AGENCIES

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This graph shows the

existing network that

exists between IT Job

Agencies using the

cleaned data.The larger

disks on this graph

represent the agencies

that have the largest

numbers of links to

other agencies.

CAVEATS ON THIS ANALYSIS

This data was collected by taking the top 100 links from Google when searching IT

Job Agencies and I created a seed list to pass to VOSON which went out to each of

those seed sites and traversed the site searching for external links. Those external

sites are then traversed in turn looking for external sites, and so on.

This process took several days searching for links and then following those links

before I had the completed list. Due to the nature of this data collection process it

cannot be considered comprehensive; however it does give an indication to the overall

networking tendency for the industry.

The method used is a variation of what is described as a Snowball survey. You find a

target and see what is linked to that and then what that is linked to, and so on for

each of the 100 selected links for job agencies from a Google search. This is neither

random selection, nor a complete population study of agents in the industry.

The data was collected in January of this year using VOSON to collect the data

which was downloaded into a excel spreadsheet where irrelevant links were

manually removed, then links were reduced to the Australian domains only. I did not

manually check each site; however I removed anything obvious. This final dataset

was fed into NodeXL for all further analysis.

Any economic analysis provided is based on my 1 ½ years of Study at ANU 25 years

ago. However, reform of any industry is usually aimed at making the market more

transparent and responsive to market needs. And usually when a market has a large

number of middlemen and intermediary markets, the industry is lacking in efficiency

and increasing the cost and burden to buyer and seller accordingly. I believe that

level of economic analysis will stand.

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REMOVE LOW VALUE CASES

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If you remove the sites with

low numbers of external

links in and out , you are

left with a very small

number of sites. In this

example I remove sites

which had less than 5

inbound external links.

I recognise many of these

sites such as Seek, Hays,

Jobsearch, and Jobserve.

However I was surprised by

employment.byron.com.au

whom I had not heard of

previously. The Department

of Immigration would be

reference site for overseas

applicants.

OUTBOUND LINKS

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Agencies with a high level

of outbound web links

indicates a model that

allows the Job/contract

seeker to view position

vacant advertising and a

link to the associated

agent. In almost all cases

the same job will

advertised by multiple

agents although it is

sometimes difficult for the

viewer to identify that

easily. Almost all the sites

shown have links to a list

of associated agencies that

use the service.

AGENCIES WITH A HIGH NUMBER OF

INBOUND LINKS

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These agencies have

a high number of

incoming links from

other sites. This

suggests that the

industry sees value

in linking to them.

This may be because

they are seen as

providing an

effective market

place for service

seekers.

A LITTLE BIT OF DETAIL

One measure of how well these sites are fulfilling this function would be their ‘closeness’; ie what proportion of other sites can be reached in one step from the market (Seek, Jobserve, etc). In each case it approached 0.001 or in simple terms the self proclaimed markets only link to less than 1% of possible sites. Seek however does have a ‘betweenness centrality’ of 68200.153 , which indicates the site has many ties giving position seekers and position fillers reasonable value and is quite central to this marketplace. This is good for seek, however Hays came out with ‘betweenness centrality’ of 102588.576.

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The Top 10 Betweenness

Centrality

hays.com.au

jobsearch.gov.au

employment.byron.com.au

seek.com.au

careersonline.com.au

mycareer.com.au

jobsjobsjobs.com.au

jobserve.com.au

peoplebank.com.au

ipa.com.au

In this analysis, these sites appear to

provide the job seeker access to more

of the market.

MORE DETAIL CONTINUED

Another measure of value to the network is Eigenvector Closeness that identifies the most central actors in the network.

In this case employment.byron.com.au takes 1st position and swaps with Hays which moves to 2nd, and IPA drops out (to eleventh) and diverisiti rises from 11th position to 10th

position on the chart.

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The Top 10 Eigenvector

Closeness

employment.byron.com.a

u

hays.com.au

jobsearch.gov.au

careersonline.com.au

seek.com.au

jobserve.com.au

jobsjobsjobs.com.au

peoplebank.com.au

mycareer.com.au

diversiti.com.au

In this analysis, these sites appear to

provide the job seeker access to more

of the market

MORE DETAIL CONTINUED

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The Sub Graph for

employment.byron.com.a

u

The Sub Graph for

Hays

The Sub Graph for

Seek

MORE DETAIL CONTINUED

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At the other end of the spectrum these agencies only have single inward links,

indicating very low value within the market. It should be noted that both these

sites are rated as having the lowest eigenvector and betweenness values out of

over 550 sites. These sites are probably not getting a lot of attention or effort put

into them and probably offer little to the position/job seeker or the client seeking

to fill a position.

MORE DETAIL CONTINUED

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fentonconsult.com.au locher.com.au townsvilleonline.com.au

These 3 sites which came in at 219, 220, and 221st in the eigenvector

analysis show the more normal means that agencies arange there

business model. Note site is the red dot in each sub graph. In each

case the site is linked to high value sites that have many inward

links.

WHAT DOES THIS SHOW ABOUT THE

EXISTING MODELS OF BUSINESS

There is no single predominant marketplace for IT Contractors or Job Seekers

(and all other job placement marketplaces in Australia). There are a number of

central sites that the seeker can use to find jobs of interest and link to the agent

advertising the job to apply. The dominant model is the small site with links to

and from larger sites such as Jobserve, Seek, Hays etc. The 3 examples on the

previous slide demonstrate this approach. Many of these sites would specialize in

a particular form of resources; ie Microsoft, IT Project Management, Testing, etc.

This reinforces my current view of the market. It is set up for the convenience of

the Job Agencies not the Job/Contract Seeker. This model limits the users view of

the total market and the prices being paid. It requires the applicant to reveal all

and the Agency to reveal a little as it can get away with.

This is not a very transparent market for the job/contract applicant. An efficient

market in economic terms is transparent where both sides know the prices offered

and accepted. In this market, neither side is truly aware of the prices, only the

middle man who is dealing with the particular transaction does knows the price

and demand. Worse for the applicant, the agents description of the position and

the skills required for the position are often confused or miss interpreted leaving

the applicant at the mercy of those with the least knowledge of the actual

requirement.

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A SHORT DISCUSSION OF THE

CONSEQUENCES OF THIS MODEL.

A transparent market would have problems for agencies as the individual contractors and target clients would see and be able to evaluate value in a crowded market. It is also difficult to see why larger clients use this method of recruitment as it raises the cost of employment anywhere between 10% and 40%. I believe that this model applies to the job placement industry in general and the issues are the same.

It can be claimed that Seek and other similar sites are there to fulfill the need of the marketplace. However there are some striking drawbacks that make this difficult. First of all this market is designed to give the agencies the advantage, ie it favors the middleman. Second the same job is often put forward by multiple agencies and often with very dissimilar descriptions. Thirdly the contractor or job applicant has no idea if they have actually been put forward. They are told they are being put forward however there is no transparency, they have no idea of what the final rate is or whether the agent has just collected resumes and gone on holidays. It is not unknown for agencies to advertise positions that don’t exist for the sole purpose of adding more resumes to their port folios.

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HOW COULD THIS MODEL BE IMPROVED

Possible answers from the recruiting side. A market with industry certified only applicants.

This would assume a market where the only applicants are endorsed by a professional body like the ACS, Microsoft, etc.

Improve the existing markets so that it is easier to see the entrants and costs being applied.

Possibly both.

Possible answers from the applicant side Greater transparency to allow the applicant to see

what the rates are for particular skills and roles, and what the margins are.

Greater transparency to allow the applicant know which exactly role they have applied for. Many recruiters(the end employer) provide job/position identifiers; this should be standard in all job ads.

More contractors/applicants should consider ACS or industry certification so it is easier for the industry to see the level of qualification.

These change

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WHAT IS LIKELY TO HAPPEN

Very little or no change is likely as the marketplace appears to be

happy to continue on its merry way. IT Contractors are by nature

very individualist having often left continuous employment to

allow themselves greater latitude in their approach to work and

employment. They want to go their own way and are not really

interested in pooling their shared strength to change the

marketplace, and equally there is little incentive for agencies to

change this. The shear number of agencies to the numbers IT

contractors indicates the level of profit is high enough to attract

an unusual high number of players into this group. The only

group with a large amount to gain and possibly the incentive are

the larger employers such as the various public agencies, and

larger corporates. This group could potentially could make

significant saving by forcing efficiencies on the agencies, and only

then would I foresee any change to existing practices.

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A POSSIBLE ROLE FOR THE ACS

For IT position seekers and potential employers, considerable advantage could be gained by pushing for the use of a single marketplace where there was greater transparency that was operated in their interests. If this market place was operated by a group such as the ACS there would be greater credence to job qualification and the ability of the those in the industry to gain a clearer view of the prices to both sides.

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ACS.org.au

At present the ACS site rates at

48th position of importance as

measured by betweenness and

49th position for eigenvector

centrality. It is a site of

importance, however it has a

long way go before grabbing 1st

place. However, does the ACS

believe it is in their charter to

pursue this?

A SLIGHT DETOUR ON QUALIFICATIONS

If you go back 25 years the number of different skill sets available in the industry was substantially less confusing. I don’t know that there were less technical environments or a lower number of tools and complexity. I think employers were more inclined to employee someone with the academic qualifications and accept that they would have the ability to do the job given a little time. Vendors have since seized on, and created a market for certified professionals that appears to have superseded university and TAFE qualifications, and has narrowed the application of existing skill sets.

If employers want the number of IT graduates from universities to increase the value of that qualification needs to increase. Why spend $24,000 to $30,000 and 3-4 years of your life getting an IT qualification when you can go to India and spend $4000 and 3 weeks or less of your life getting a guaranteed vendor Certification, all the while staying in a 4 Star hotel and when you finish you quite possibly get work as easily as the graduate. An Accounting Graduate with CPA qualifications does a lot better than the IT Graduate with ACS qualifications. Can employers expect this level of qualification if they don’t recognise its value by rewarding this level of achievement.

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PLEASE LET ME KNOW IF YOU THINK I

HAVE GOT THIS ALL WRONG

Although the data was collected sometime ago,

this slideshow was put together over the weekend

to try to encourage some discussion on this

subject. Like almost all subjects there isn’t a

wrong opinion, however I prefer that there is

some evidence provided when any discussion

starts to base an assertions or analysis on. I am

happy to go over my methodology with anyone

interested.

Remember this is not a full population study or

even based on a random sample; so the results

need to be treated with care.

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WHAT CAN SOCIAL NETWORK ANALYSIS

BE USED FOR.

I have been studying Research of the Internet for a

Masters course at ADSRI ANU. A component of this

was Social Network Analysis, which in turn can be

studied as part of the Master course Research of the

Internet. Social Network Analysis can be used for

analysing relationships between entities, whether they

individuals, groups, and organisations. Things that we

have used it for in these studies include email, Flickr,

Facebook, Twitter, Weblinks, Blog, and voting cliques

for the Eurovision song contest, also I have applied this

to immigration movements and and data analysis. This

is something I enjoy, so if you have something you

would like me to look at, let me know and we can

discuss it.

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