Recruitment Difficulties and Firms' Characteristics: An Analysis of French Company Data

Abstract

– This article uses a survey conducted in 2019 among companies in the manufacturing sector on the recruitment difficulties they may encounter. By linking this information with the companies’ income statements, we show that those facing these difficulties are, on average and other things equal, more productive than others. This suggests a potential misallocation of production factors, which would not be attracted by the most efficient companies. A very simplified estimation suggests that these inefficiencies could reduce the average productivity in the manufacturing industry by around 0.10% to 0.15%, which is low. The survey also enables us to analyse the causes of these difficulties. In addition to the problems of matching supply and demand in terms of skill levels in the labour force, the wages offered and the competition with other companies also appear to be key factors behind recruitment problems.