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Stages of the Recruitment Process and the Referrer’s Performance Effect

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  • Valery Yakubovich

    (The Wharton School, University of Pennsylvania, 3620 Locust Walk, Philadelphia, Pennsylvania 19104)

  • Daniela Lup

    (Graduate School of Business, University of Chicago, 5807 S. Woodlawn Avenue, Chicago, Illinois 60637)

Abstract

Although the existing theory predicts that a referral’s chances of being hired increase with the job performance of the referrer, no empirical evidence is available to support this claim. To address this discrepancy, we decompose the recruitment process into objective selection, subjective selection, and self-selection and theorize that the likelihood of passing a particular recruitment stage increases with the performance of the referrer under objective selection and self-selection, but remains undetermined at a stage of subjective selection. Our analysis of unique comprehensive data on online recruitment of sales agents in a virtual call center supports these arguments. The effectiveness of personnel as a recruitment channel varies with the type of the recruitment stage and performance of the referrer. When the firm evaluates candidates by an objective criterion, the advantage of a referral increases with the performance of his or her referrer; those referred by relatively high-performing workers are significantly better than the applicants who learned about the job from Internet ads. When job candidates self-select into the next stage of the online application process, the referral of any agent is more likely to continue than a nonreferral, and this likelihood increases with the performance of the referrer. On a subjective stage, the outcome is contingent on the intricacies of the recruitment process. In our case, an applicant’s chances of being hired increase with the performance of his or her referrer because the firm rejects the referrals of low-performing workers at a higher rate than it does nonreferrals, while it treats equally the referrals of high-performing workers and nonreferrals. The study’s contributions to the literature on social networks in labor markets are discussed.

Suggested Citation

  • Valery Yakubovich & Daniela Lup, 2006. "Stages of the Recruitment Process and the Referrer’s Performance Effect," Organization Science, INFORMS, vol. 17(6), pages 710-723, December.
  • Handle: RePEc:inm:ororsc:v:17:y:2006:i:6:p:710-723
    DOI: 10.1287/orsc.1060.0214
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    References listed on IDEAS

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    Cited by:

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    2. Roxana Barbulescu, 2015. "The Strength of Many Kinds of Ties: Unpacking the Role of Social Contacts Across Stages of the Job Search Process," Organization Science, INFORMS, vol. 26(4), pages 1040-1058, August.
    3. Adina D. Sterling, 2014. "Friendships and Search Behavior in Labor Markets," Management Science, INFORMS, vol. 60(9), pages 2341-2354, September.
    4. Dariel, Aurelie & Riedl, Arno & Siegenthaler, Simon, 2021. "Referral hiring and wage formation in a market with adverse selection," Games and Economic Behavior, Elsevier, vol. 130(C), pages 109-130.
    5. Roberto M. Fernandez & Colette Friedrich, 2011. "Gender Sorting at the Application Interface," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(4), pages 591-609, October.
    6. Brian Rubineau & Roberto M. Fernandez, 2013. "Missing Links: Referrer Behavior and Job Segregation," Management Science, INFORMS, vol. 59(11), pages 2470-2489, November.
    7. Kucherov, Dmitry G. & Tsybova, Victoria S. & Yu. Lisovskaia, Antonina & Alkanova, Olga N., 2022. "Brand orientation, employer branding and internal branding: Do they effect on recruitment during the COVID-19 pandemic?," Journal of Business Research, Elsevier, vol. 151(C), pages 126-137.
    8. McCarthy, Julie M. & Bauer, Talya N. & Truxillo, Donald M. & Campion, Michael C. & Van Iddekinge, Chad H. & Campion, Michael A., 2017. "Using pre-test explanations to improve test-taker reactions: Testing a set of “wise” interventions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 141(C), pages 43-56.
    9. Elena Obukhova & George Lan, 2013. "Do Job Seekers Benefit from Contacts? A Direct Test with Contemporaneous Searches," Management Science, INFORMS, vol. 59(10), pages 2204-2216, October.
    10. Adina D. Sterling, 2015. "Preentry Contacts and the Generation of Nascent Networks in Organizations," Organization Science, INFORMS, vol. 26(3), pages 650-667, June.
    11. Morimoto, Mayo, 2013. "Referral Hiring of Miners: Case from the Coal Industry in Early Twentieth-Century Japan," ISS Discussion Paper Series (series F) f164, Institute of Social Science, The University of Tokyo, revised 02 Feb 2018.
    12. Anshul Ujlayan & Sanjay Bhattacharya & Sonakshi, 2023. "A Machine Learning-Based AI Framework to Optimize the Recruitment Screening Process," International Journal of Global Business and Competitiveness, Springer, vol. 18(1), pages 38-53, December.
    13. Joshua C. Pinkston, 2012. "How Much Do Employers Learn from Referrals?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(2), pages 317-341, April.
    14. Ahmad M. Ashkanani & Benjamin B. Dunford & Kevin J. Mumford, 2022. "Impact of Motivation and Workload on Service Time Components: An Empirical Analysis of Call Center Operations," Management Science, INFORMS, vol. 68(9), pages 6697-6715, September.
    15. Megan Yuan Li & Charson Cancan Dong & Shige Makino, 2023. "Does a Past Category’s Success Influence Existing Entrepreneurial Fundraising?: A Legitimacy Spillover Perspective," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2263-2292, November.

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