What are some of the ways in which prospective employers reduce the information asymmetry when recruiting...

What are some of the ways in which prospective employers reduce the information asymmetry when recruiting employees?

What are some of the ways in which lenders reduce the information asymmetry when evaluating prospective borrowers?

Expert Solution

While selecting the right candidate for a particular position/ role, prospective employer has to get full information about the candidate experience and academic knowledge in order to retain and motivate them. Some of the ways through which the employer gathers information about the candidates are through

1. Reference check

2. Background check

3. Authenticity of the Educational certificates

4. Authenticity of the work experience certificates

5. Authenticity of the past three months salary slip/ Annual increment letter

6. Conducting an effective interview with various level of managers to choose the right candidate with the required skill set or knowledge.

7. Also communicating the CTC , with full break-up details before appointment.

Some of the ways through which Lenders gathers information of the borrowers :

1. Checks Bank statement

2. Credit worthiness of that particular borrower: checking whether the old loans were repaid on time, and capacity to repay the new loan

3. Whether the borrower has sufficient assets to repay the loan/ Collateral

4. Age and Health factor

5. Financial statement of the prospective borrowers business, if any

6. Reason for availing the loan/ type of loan

Rahul Sunny answered 1 year ago

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