The general consensus is that it is made up of jobs that are not advertised. Many articles and reports have been written about it, but the statistics quoted are wide ranging.
People retire, resign, relocate, transfer, and get sick.
Advertising these job vacancies in newspapers is expensive for companies and the results are slow in coming. So, many try cheaper and faster methods first. For example, many post their job openings in-house. To get the word out about these jobs, employers pay cash incentives to employees, if the people they recommend from the outside get hired. Word of mouth is an essential component of successful networking, and networking is the most recommended course of action to tap the hidden job market.