Starting Wage, Negotiation of the Contract of Employment and Recruitment Intermediaries
In France, the relative decline of sectoral collective bargaining, as well as changes in the law relating to the employment contract during the late 1980s, have restored some flexibility to the employer and employee in determining contract terms, thus contributing to a process of individualization of the employment relationship. Companies are thereby better able to take account of the constraints imposed by the labour market and, in particular, can attract the most qualified candidates. To do this, they are often dependent on recruitment intermediaries who have a better knowledge of the state of the market. However, the selection of a recruitment strategy, in particular taking into account the trade-off between the speed of recruitment and obtaining a high quality match, leads a company to choose one recruitment channel over another, and has consequences for the negotiation of contract terms. The objective of this paper is to analyze how these various recruitment channels affect the determination of starting salaries, examining in particular to what extent they bring employers and employees to negotiate the terms of their contrats of employment. From a survey conducted in 2005 on recruitment practices involving 4000 French firms, we examine starting salaries and show the significant impact of recruitment channels (such as private recruitment agencies) on them, in addition to the effects linked to other “human capital” variables (age, gender, education, etc.) and to the characteristics of jobs and businesses. Findings show that this impact is not only linked to when the period of recruitment is for a longer duration, as shown in the “wage posting” models, but to the fact that some channels provide applicants with the capacity to negotiate more favourable terms, or provide an improvement in “match quality” between the employer and employee.