Members of the class of 2015 are collecting their diplomas and hustling to land their first jobs. This year’s college grads have lived more of their lives online than any generation in history, so using digital tools and social networks for their job search seems like a no-brainer to these late millennials.
Even for those of us old enough to remember applying for jobs the old-fashioned way, the idea of responding to a newspaper ad with a snail-mail cover letter feels like ancient history. There’s been a revolution in the way we connect with the world of work over the past decade.
But I’d argue that this revolution is just getting started. Job markets are ripe for transformation, and it’s finally here—in the form of digital platforms, the very same technologies that have reshaped the business landscape in areas such as e-commerce.
Online talent platforms are digital tools that connect individuals to work opportunities in a large-scale but efficient way. Some, like LinkedIn, Monster.com, and Indeed.com, bring together candidates and employers to fill traditional jobs. Others, from Upwork to Uber, create online marketplaces for freelance work. Still others are tools that use big data analytics to transform the way companies hire and manage talent.
At the McKinsey Global Institute, we’ve just completed new research looking at the economic growth and employment gains online talent platforms could generate in the decade ahead. By creating better, faster matches between workers and available jobs, they can cut unemployment. By creating flexible part-time opportunities, they can draw more of the inactive population into the labor force. And by putting the right person into the right role, they can boost productivity. All told, online talent platforms could increase global GDP by $2.7 trillion annually by 2025.
But what does all this mean for the average worker?
For starters, it could mean empowerment. Outside of a few high-growth sectors, most individuals have faced diminished hopes and heightened anxiety in the job market in recent years. But technology is starting to swing the pendulum slightly back in favor of workers as online talent platforms give users more work options, more mobility, and a better sense of the wages they can command on the open market.
Talent platforms are gradually expanding to new occupations, industries, and geographies, but so far the clear winners have been educated and skilled professionals in advanced economies. In fact, the most sought-after talent may not need to apply for jobs at all. The opportunities may come to them as more companies recruit “passive” candidates rather than placing an ad and waiting to see who responds. Even workers who lack formal credentials can gather endorsements and build their reputations for soft skills such as customer service; they may also be able to find flexible and self-directed opportunities to add hours and boost their incomes.
Platforms such as Glassdoor and Vault—which publish anonymous reviews and salary information from current and former employees of specific organizations—are changing the game in other ways. They offer new visibility into what it would be like to work for a given company, increasing the odds that users will have the ability to choose an enjoyable work environment.
For employers, the news is mixed. Companies can now use sophisticated digital platforms to improve the way they recruit, assess, and train employees. This requires investment to build analytics capabilities in HR departments, but the early adopters are discovering that data-driven decisions about people can remove some types of bias and produce better business results.
But now that individuals have publicly visible profiles, the war for talent is heating up. Competitors can lure away valued employees (and even entire teams). Greater job mobility is a plus for workers and the broader economy, but businesses may face higher turnover. It will be more important than ever to treat employees well and create a compelling workplace. Companies will have to maintain their reputations as employers just as carefully as they maintain their consumer brands.
Online talent platforms have a unique ability to track the positions employers are filling, the skills required, and the career pathways that take people from education to employment. These insights can help individuals make better-informed decisions about educational investment. Educators and training providers will also need to use this data to shape their offerings—and there could be a new standard of accountability as the outcomes associated with specific institutions and degree programs become more transparent.
With their user networks growing into the hundreds of millions, talent platforms may reshape job markets in ways that we can only begin to imagine. Just consider what digital platforms have done in e-commerce. Amazon, for instance, started as an online bookseller but has introduced innovations and business lines that have rippled through multiple industries. Online talent platforms may similarly evolve and add new capabilities that we cannot predict today.
Thanks to technology, the class of 2025 might not find it quite so daunting to enter the world of work.
This article originally ran in LinkedIn.