Job Market Signals

It’s a curious thing, the job market. While Bureau of Labor Statistics data suggests that unemployment is only sitting at 4.3%, the media ecosystem seems to be in disagreement about what constitutes a good or bad job market. In a period of just a month or two, articles such as “Work-Life Balance Will Keep You Mediocre” or thought pieces about the “9-9-6” work week (working 9 am-  9 pm 6 days a week) abound, while at the same time, other commentators are discussing how people in Gen Z can’t find work. I’m particularly skeptical to the former and sympathetic to the latter, because while I do think people have to work harder than expected to be objectively successful (other than those gifted or who otherwise inherit their accomplishments from others), I recall graduating into the recovery period of the great recession, and hearing from more than one peer that they were taking jobs for as little as $11 an hour (which I even did myself for a month or two at IBM before being promoted to a much more acceptable standard of income.)

This week, we’re taking a bit of a blended approach. I’ll discuss the meaningful pre-work people do before entering the job market (formal education, certifications for career changers, etc.), what signals are important in identifying and applying to opportunities, and how to better prepare and stand out when reaching the interview stages of an opportunity.

Before The Job Market

Whether you’re a student, career changer, or even just out of work, it’s important to understand the underlying principles of signaling theory. Without belaboring the academic points too much, the basic premise is that both job seekers and employers rely on signals from each other to identify opportunities and candidates. The ideal signal to a job seeker is one that requires minimal qualifications and effort to be eligible for a position, and the ideal signal to an employer is anything that demonstrates or suggests that a particular candidate will generate greater efficient utility than their competitors for a position.

So, for example, if a job seeker can obtain a job without any material qualifications (i.e., positions at coffee shops, grocery stores, holding signs on street corners, etc.) then they are apt to do so. If they are seeking higher levels of employment that warrant greater amounts of compensation, then they’ll be incentivized to pursue formal education, certifications, or other forms of recognition that they are qualified to do work. This is where gradients of significance to things like education become important.

For example, while many jobs just specify the need for a “bachelor’s degree or other college degree,” this is really just a filter on the part of the employer to reduce the amount of interest from candidates who otherwise may not have spent years reading and writing papers or generating deliverable projects of one kind or another. In turn, if an employer is specific in their desire for exact qualifications, then job postings are more likely to be specific with things such as “the CFP® Certification,” which further reduces the potential pool of interest to those with the appropriate credentials to otherwise signal their substantial competency in work that is materially benefited by having the CFP® Certification.

Those pursuing career advancement may be tempted to pursue education for education’s own sake, but not all education is made equal. This is not to disparage any field of study or knowledge, mind you, but to point out that the specificity with which you intend to pursue a career path or opportunity aligns best with signals that match that path. If you want to become a banker, a degree in accounting, finance, business, or economics is going to benefit you far more than a degree in civil engineering; not because the skills from civil engineering can’t be applied (I imagine there’s an enormous amount of math and planning in that field!) but because it doesn’t signal a strong degree of competence and expected utility in the job functions of being a staff accountant. This is also to say nothing of licensed and certified fields where a specific education is required to obtain a license to practice in the field, such as being an attorney or medical doctor.

Standing Out in Applications

More now than ever, mastering your signals in the application phase is critical. While not all employers use algorithmic filtering or tools to select candidates for the short list to interview, plenty do. Thus, in the way that many companies are now shifting from “search engine optimization” to “generative engine optimization” or “answer engine optimization” in order to show up in the “search results” for people seeking their products or services through large language models such as ChatGPT and Claude, candidates must now do the same with their applications and resumes.

It’s important to recognize that most algorithmic recruiting tools and AI-based tools use probability and a very literal interpretation of the data they are presented with; while AI has given us the perception that it has nuance and thinks in otherwise considered ways, this is largely a well-crafted illusion. Those seeking to bypass AI screening and reach an interview should be mindful of the following tips:

For Resumes

• Use exact keywords and phrases from the job description. If the position is hiring for a “financial planner,” update your use of “ financial advisor” from other places to match “financial planner” so that it leaves no room for interpretation by the algorithm.
• Use both acronyms and full terms where applicable. For example, if you worked with Salesforce at your last job, and the position you’re applying to asks for experience with CRM, say both things. “Used Salesforce Customer Relationship Management software to….” And later “Used data from the CRM to…”
• Use clear and structured formatting for section headers, such as “Experience,” “Education,” and “Skills.” Do not use novel descriptors, and avoid graphical versions of headers rather than plain text. E.g., don’t use some sort of word art or “picture” of the word experience. Make sure that it’s in plain text so that an algorithm can read it and navigate the datapoints in your resume easily.
• Experience: There are arguments to be made here about a “narrative” approach versus a “relevance” approach. A narrative approach structures experience in chronological order. A relevance approach structures your experience in order of significance. Algorithms favor the latter, but people tend to favor the former. Choose wisely.
• Job Titles: As with the keywords above, use industry norm job titles. If you had the title “Director of Fun” at your last job, that’s great, but perhaps it’s better to say “Director of HR” when applying for your next HR role.
• Education, certifications, and tools: List only those educational accomplishments or resources that are specifically relevant to the position itself. It’s best to use the language from the job-posting where possible so that the algorithms can match things 1:1 rather than trying to “decide” whether something similar-but-different counts.
• Length: Most resumes should be no more than one page, which means that brevity is the soul of wit. In certain industries or career stages, a more complete “CV” of all of your work history is appropriate. Know what the norm is for what you’re applying to and tailor accordingly. When in doubt, be succinct over lengthy.

For Cover Letters

• Rule #1: Do not write to a general audience if you have a specific audience. E.g., “Dear Hiring Manager” is not preferable to “Dear [Hiring Manager’s Name]” when you know who the hiring or interviewing individual is.
• Do your homework. Generic cover letters look and sound generic for a reason. Phrases such as “I am excited to work for a fast-paced and innovative leader in the [industry]” stand out as generic. As with the resume, if you’re serious about obtaining a specific opportunity, demonstrate that seriousness by writing to the company and about your alignment with the company, rather than about [insert here how [any] company is [great.]]
• Format your cover letter as a business letter. This means addresses and dates in the headspace of the letter before getting to the “Dear Name” and body of the letter. This also means you lose about 1/4^th of your page to the formalities, so delivering a clear message in 2-3 paragraphs is key. My recommended format includes:
  • Paragraph 1: Clear demonstration that you know what position you’re applying for and what you’ll do at the company.
  • Paragraph 2: Explanation of your background and relevant qualifications for the position. This is also where you get an opportunity to smooth over any qualifications you might not quite have in alignment with the job posting. Remember to reference keywords.
  • Paragraph 3: Conclusion and call to action.

Final tips on your applications: Submit everything in a .pdf format, and triple-check that any conversions from a Word, Pages, or other word processing format are completed correctly when saving your resume and application in that format. The only exception to this is when a job posting specifically indicates a different format for file submissions. Keep in mind that many word processing formats have prior version history embedded in them, so if you erroneously send a .doc resume, you might give a savvy application reviewer everything they need to see whether you just made quick edits, no edits, or whether you made a thorough resume for the position.

Testing & Interviewing

Many companies are now using a pre-interview or post-interview screen as part of their application process, particularly when a role requires technical skills. This has been popular for a long time in certain industries, such as software programming, where an interview is all well and good, but you have to be able to code, or there’s no point in hiring you for the position. In turn, even fields such as law or financial planning are asking for some demonstration of knowledge or work product. Some of these tests are open-book, suggesting that what’s important is your ability to accomplish the task. Others require a live or in-person demonstration, suggesting that the company emphasizes your in-the-moment knowledge or skillset.

In preparing for either case, focus on the core job task responsibilities listed in the position. Does the job specify that you’ll be using specific tools or programs? Does it indicate that you need to have experience with a particular technique or area of practice? Whatever the case, be sure to brush up on those subjects so that you’re not caught flat-footed. It can also help to review the company’s existing products and services for evidence of what they specifically use or value. For example, a cursory review of the MY Wealth Planners website would indicate that we use eMoney, a top-of-the-line financial planning software popular with comprehensive financial planning firms that serve affluent clientele. Those with industry knowledge who can recognize that would thus reasonably expect that we focus on deep knowledge rather than cursory or efficient general financial advice.

When you get to the interview, remember that an interview goes both ways. You should practice all the common questions, i.e., “Why do you want to work here?” “What are your strengths/weaknesses?” “What can you tell me about [our company]?” “Where do you see yourself in X years?” There is no reason not to have a polished and comfortable response to these types of inquiries. Keep in mind as well that there’s no such thing as a good “yes or no” answer. Every question you’re asked is an opportunity to demonstrate your skills, knowledge, or capabilities for the position. “Yes” and “no” do not indicate any of those things, other than that the wrong answer might be disqualifying.

In turn, have specific and valuable questions to ask. A lot of candidates ask somewhat generic questions that don’t build rapport; some of these are practical, others are not. Practical examples of generic questions would be clarifications about compensation, benefits, or the hiring timeline that were not explicitly detailed in the job posting or other information provided. Impractical generic questions include things like: “Do you like working here?” [Obviously.] “What is the biggest challenge you’ve faced in your time with [company]?” [Who cares?] “Why does the company [have a policy I obviously don’t like]?” [If you don’t like our policies, why are you applying to work here?]

There are valuable opportunities not only to learn about a company or opportunity that help demonstrate you’re well prepared for a position. These should be the emphasis of your opportunity to ask questions. For example: “How do you think [this differentiated product/service the company offers] stands out in comparison to other companies such as [name of direct competitors]?” The question is informational and useful to you as a candidate, but more so indicates that you’ve thoroughly researched the company and are familiar with it, as well as understand the alternatives in the marketplace.

Job Market Signals

Fundamentally, every part of getting a job or hiring someone for a job is about aligning the right signals. Candidates need to indicate strongly that they have the right education, experience, and temperament for the position they’re applying to. Employers need to indicate clearly what they’re looking for, both to attract the right candidates and repel the wrong candidates. It’s a meaningful and important part of the interplay between both parties that clear communication and expectations are in place, so that all participants can most efficiently align opportunities that meet their needs.