Formal and informal networks

Ideally, transition in the labour market refers to the way an appropriately skilled population meets the needs of employers. Relevant skills are usually those acquired in the formal education of individuals who demonstrate the mental skill and capacity to perform (or be trained for) an occupation. As the earlier sections indicate, education is a major factor in determining how successful the transition process is likely to be. Nevertheless, translating skills and education into a job is done in a context of informal and formal networks.

The job market comprises two sectors: visible and hidden (Figure 17). The visible or formal sector comprises only a small proportion of networks used to create jobs -- the tip of the iceberg. Formal networks include advertisements in newspapers or on job bulletin boards, employment agencies, and other formal methods of application. When job positions are communicated in the formal market, the competition for them is great.

The hidden or informal market consists of information about jobs that are not publicized through a formal network. It is estimated that 80% of jobs are found through informal networks. This network is characterized by casual opportunities to provide and get information concerning employment openings.