What If People Paid for Jobs?

What if you never needed to send in another resume!

What If People Paid for Jobs?

I was discussing this idea with someone, and upon first hearing it, he thought it was stupid. However, at the end of the conversation, he thought the idea had some merit. So, if you, like him, are also immediately off-put by the idea, hopefully, with the rest of this article, I can make a case for why this might be useful.

I often hear that people are sending out many resumes, sometimes up into the thousands, and are still not getting a callback that leads to being hired. On the other hand, we hear businesses have to go through many applications and applicants before finding the one that aligns with their interests.

A joke I’ve made before is that “Waiting on lines is unnatural, and the main function of techno-capital is to stop that from occurring.” So, to me, the resume application and hiring process sounds like an inefficient line-waiting system that can be better handled with a market.

So, would it be more efficient for a company to, instead of placing a job, waiting for a resume, filtering through them, selecting interview candidates, and then going through the process of hiring and seeing if the employee is a good performer, that the company instead sold the job with a price? On the flip side, as a future employee, you, instead of looking for companies to apply to, find the company position you want to work in, look at competitive market prices for similar jobs, and then pay the price and immediately get hired.

This would immediately solve the line-waiting problem, but what other system parts are affected by these changes?

Of the many questions about the changes I’ve heard, these are a few: how does this benefit the company? How does this help the would-be employee? How does it attract skilled labor? What happens when someone is too poor to afford a job they want? What happens if wealthy elites buy all of the good jobs? Is the system prone to scamming? Why would anybody pay for this? Is this a complete fantasy?

The first question asks how this benefits the company. When hiring for a role, many constraints must be solved to select the correct candidate. By having an initial price to be hired, you attempt to solve three problems: Put a price on how much the candidate wants the job, which allows employers to price how much they want the future employer to value the job, and by having this price, a candidate has already been preselected to be less likely to leave, which lowers turnover risk. If the employee does leave before they can recoup the price of employment, the business then ends up offsetting the cost of training them.

The next question asks how this benefits the would-be employee. The first benefit is decreased time in the job search, which means they can spend that time in other ways. The second is reduced risk in uncertainty about future employment if one leaves their current employer; this is especially true when considering the ability to look at real-time job price rates and those trends. One wouldn’t have to go through the rigamarole of not knowing why they weren’t hired after an interview. Instead, they’d just be employed, and if they were a bad fit, they’d be terminated quickly, and this would be an opportunity not to make the same mistake again. It would benefit people who perform well learning on the job who don’t have typical backgrounds. Because the employers will be a bit less frugal with hiring, the number of jobs may expand to compensate for less risk in hiring. The other benefit is that some jobs will have negative prices because of how pricing works, which goes on to the next question.

The question of attracting skilled labor depends on that job's supply and demand. Some jobs have a lot of demand to be filled by the employer but have a smaller supply to match this demand, which means that would-be employees pay negative prices for these jobs. This is often seen in highly competitive fields where businesses pay employees signing bonuses. However, this practice has to do with the fact that attracting good talent is difficult, so the company will try to front-load an incentive. Another way of looking at it is that a company trying to attract talent now because they can put a fee on the job can filter for people willing to spend the initial money on getting hired and increase the total compensation through higher wages. What of doctors and lawyers? This somewhat doesn’t apply to them, mainly because of the government's fiat on who can call themselves that. Without the government fiat, you’d see the same thing play out as other industries: the initial price would likely be high, and the problem of hiring unqualified persons is negligible as long as the business fires the person before the cost-benefit tradeoff of hiring them occurs. You might also see companies with high job prices have lower pricing incentives for people with specific certifications or degrees.

What happens when someone is too poor to afford a job they want? One would have to take a loan, but this isn’t dissimilar from what many people already do. For many, they take a college loan for an education, and this education acts as a proxy for future employment. In many ways, the answer to this question is that instead of paying for a potentially useless education, the money can be better spent directly paying the company for a job. A secondary problem arises when someone still can’t get a loan to pay for this job, but like schooling, the government typically comes into pay for the loan; I don’t recommend that at all because, ultimately, that will drive up the cost of the price of all jobs. Instead, I would say that the floor price for entry will be low or even negative because of the supply and demand dynamics for some jobs.

Can wealthy elites buy up all of the good jobs? In some sense, don’t they already? Affluent parents can bias their children towards good outcomes through tutoring, school choice, and good connections. In businesses that care about making money, this is less of a problem. However, when everyone can compete to buy a job in the open market, there is less potential for wasted time on preselected job offers.

Is the system more prone to scamming? I’d heard an argument against the idea that went something to the effect of a business putting up a bunch of fake jobs, taking the money to hire these and then firing them immediately, or starting a Ponzi scheme where the money acquired is used to hire more individuals. Not only do fraud laws already cover this, but more importantly, individuals are less likely to spend money on a job for a company that doesn’t seem credible. Unless the payoff makes sense, individuals will be less likely to spend more money on riskier ventures, which decreases the ability for a scam to work in the long run.

Why would anybody pay for this? Would you, my astute reader, pay for this? Does it sound like it could benefit your life? Does it sound like it might benefit the lives of anyone you know? Is there a glaring flaw that I have missed? I would pay for a job in the conditions described above. So, I guess that makes the answer a Yes, even if the sample is small.

So, is this a complete fantasy? Hopefully, I’ve argued that to be a no. I’d think any business could implement this practice personally. Any software developer could build a market for it right now (Funnily enough, a friend told an older software developer about this idea of paying for jobs, and the older developer started laughing because they’d thought about building a marketplace for an idea like this years ago).

Another practical example that is somewhat similar is what happens when a general partner purchases a stake in a private equity or venture capital firm. When the partner makes the purchase, they effectively have bought a management role in the firm, and their income is dependent on the fate of the firms. Another example that is somewhat negatively looked at is the practice of people buying officer commissions in older European armies. Buying the commission required payment and conferred a job with responsibilities and prestige. So, there are examples where things like this seem to have worked for extended periods.

What if people paid for jobs?

As an aside, I’ll leave two more thoughts about this as an exercise for the reader: How might this system accelerate the brain drain worldwide? The second thought pertains to the ability to expedite AI's ability to infiltrate jobs; how might a job with a price allow developers to build AI systems that are targetted to do those jobs, seeing as the employer will be able to take on more risk with the payment for the job?

* One idea that floats around when discussing this is, what about the business returning the payment after some time at the company? Ultimately, this doesn’t matter because it is already priced-in by how much the business decides to pay the employee.