Could be a shortage of qualified candidates. Just cause hundreds of people apply doesn't mean that even 10s of good candidates apply.

If you're passing over qualified candidates because you fail at sorting the wheat from the chaff, then the 'shortage' is not due to the market...

Then the company should better advertise more exactly in its job ads what they expect from their candidates so that less unqualified applicants submit their applications (while - of course - not preventing suitable candidates to submit their applications). Is this nontrivial? Surely it is; but that's why HR is a distinctive position in most companies.

If you want to learn more about this topic, begin reading about statistics - especially type I errors and type II errors, since this is the mathematical formulation of the topic I was talking about in the previous paragraph.

A shortage of qualified candidates is an indicator that your stated salary range doesn't line up with the market rate for your job description.

This!

I applied for a position at a company a year ago and was a great fit (both from my perspective and a company rep) but my salary expectation was higher than their budget. That position remained open on their website until about a week ago. What happened a week ago? They sent an email to my almamater highlighting the position and included their current salary range. Guess what - the salary I was asking for last year fell smack in the middle of that range and they were inundated with applications!

edit: silly typos!

Yeah. Depends if the recruiter was retained or contigent.