Researchers conduct a two-arm randomised control trial (RCT) with 621 small and medium sized enterprises (SMEs) across multiple sectors in Addis Ababa, Ethiopia.
First Treatment Group
In the first treatment group, the team encourage firms to post formal vacancies, by reducing firms’ vacancy posting costs through targeted subsidies. Researchers offer to bear all cost of posting firm vacancies on five central job-boards, the major bi-weekly newspaper, and the major online job-board. The aim of this intervention is to encourage firms to use formal employee search channels, such as the posting of vacancies on offline and online job-boards and in newspapers, instead of relying on network-based hiring techniques, such as referrals by existing employees.
Second Treatment Group
In the second treatment group, researchers offer to screen all applicants to firm vacancies on three cognitive or non-cognitive skills of the firms’ choice. This skill screening is conducted in addition to the vacancy subsidies. This treatment group should reduce firms’ reliance on information about candidates obtained through informal hiring channels (e.g. referrals) and, thus, lead firms to conduct a more formal hiring process.
As part of the project, the research team conducted baseline surveys with 621 firms that were actively looking into hiring new employees. Researchers then conducted 3288 follow-up phone surveys to capture detailed information about new vacancies and hires between endline and baseline. Next, the team re-interviewed 606 of the 621 firms at endline (97.6% of the sample) to capture their business outcomes, knowledge, expectations, and attitudes towards different hiring channels. Then the team further conducted 1606 interviews after the endline to assess the persistence of the intervention. Finally, the team collected data on almost 30,000 vacancies that were posted in newspapers, as well as online and offline job-boards, throughout Addis Ababa during the study period.