This report is one of a series of papers analyzing how employers select and train employees and the implications of their behavior for schools. Data for the study were gathered in telephone interviews with more than 3,500 employees conducted by the Gallup Organization. This report is organized in three chapters. In the first chapter, John Barron and John Bishop examine extensive search and intensive search, and determine which of these methods are used by different types of employers and why. Costs of each method are also discussed. Chapter 2, by John Bishop, explores why employers prefer informal recruitment mechanisms and the implications of this preference. The final chapter, by John Bishop and Suk Kang, asks the question: Why do employers underinvest in on-the-job training? and analyzes the results of this employer policy. This chapter also looks at the relationship between employer decisions about on-the-job training and the effects of these decisions on society as a whole. An extensive executive summary and data tables are included in this report. Appendixes include statistical computations, the employer questionnaire, and references. (KC)