The Diminishing Returns to Human Recruiting in Online Labor Markets

Employers often rely on outside recruiters to find workers, but it is unclear whether human intermediaries add value when employers already have access to algorithmic screening tools. We study a randomized experiment in a large online labor market that assigned human recruiting assistance to 83,017 vacancies. The recruiters increased the search and screening intensity of treated job posts: treated job posts had more recruiting and more applicant screening done on their behalf, resulting in 5\% more applicants. Employers of treated job posts redirected their own screening efforts toward recruiter-sourced candidates and away from applicants who found the post on their own. Despite the increase in search intensity, treated employers were no more likely to hire than employers of control posts with access only to algorithmic tools. Match quality appears at best, no better for the hires that resulted from the treated job posts, and treated employers were less likely to return to the platform to post a second vacancy after the experiment. We develop a model of delegated recruiting in which recruiters and employers rely on a common noisy signal; it predicts that recruiting adds value when the recruiter brings information the algorithm lacks and can subtract value when the two parties’ assessments are correlated. Consistent with the model’s screening mechanism, recruited applicants are positively selected on observable characteristics yet do not improve hiring outcomes. These findings suggest that as algorithmic screening improves, the scope for intermediaries to add value shrinks because it becomes harder to access independent information.