A new study released by LinkedIn is casting light on just how important networking and connections are to employment and job growth. While what people know remains important in the workplace, who they know can help open doors, shedding light on the value of networking and the connections it produces.
Named “Connections As A Tool For Growth,” the study shows a correlation between job growth and the density of connections within a particular metro area.
Researcher Michael Mandel, president of South Mountain Economics, used data from LinkedIn’s current network of users to create an “index of connectedness” for the 275 metropolitan regions of the United States.
The index examines LinkedIn users in a region and averages their number of LinkedIn connections. The higher the connection number, the higher the density of connections in a region.
The resulting index numbers were compared with job growth rates from the U.S. Bureau of Labor Statistics (BLS). When regression analysis and appropriate controls are used, it was found that level of connectedness and job growth rates were strongly associated.
The study revealed the country’s most connected metropolitan areas on LinkedIn also saw more than double the career growth rate of those with the fewest number of LinkedIn connections.
The top metro areas, for example, averaged a job growth rate of 8.2% between 2010 and 2014, compared to the bottom metro areas that saw only a 3.5% growth rate.
Based on the correlation between connectivity and job growth, the study’s authors say enhanced connections could have a major impact on the country’s “jobs gap.” This is the gap that must be filled to return the economy to its pre-recession employment levels while absorbing new entrants into the job market.
As of September 2014, the United States needed 5.4 million additional jobs to fill its gap. This is taking into account the 14% unemployment rate for those ages 16 to 24 in America that must be absorbed by the employment market.
With improved connections, employment could be boosted by an estimated 700,000 to 1.8 million employees in the U.S., the study concluded. The net result would be a reduction of the 5.4 million jobs gap by as much as 33%.
While this study is meant to show the correlation between connections and job growth, it’s just one piece of a giant research puzzle LinkedIn is undertaking. The platform, with more than 300 million users, representing some 200 countries, is creating an “Economic Graph.”
This graph will ultimately attempt to graph the web of connections between people, jobs, skills, schools, companies and knowledge to create a digital map of the global economy.
Mandel’s study on behalf of LinkedIn indicates “that increasing connectedness has the potential to improve the functioning of the labor market.”
