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Formal search and referrals from a firm's perspective

Author

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  • Rebien, Martina

    (IAB)

  • Stops, Michael

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Zaharieva, Anna

    (Univ. Bielefeld)

Abstract

"This study explores the relationship between firms' characteristics and their recruitment strategies. We propose a model based on a search and matching framework with two search channels: a formal channel which is costly for firms and a costless informal channel, i.e. referrals. There is a continuum of heterogeneous vacancies in our model where every firm with an open vacancy chooses an optimal search effort in order to attract job candidates. This search effort depends on the productivity of the firm and, contrary to the previous literature, workers send simultaneous applications to open vacancies. We assess the model predictions by using the IAB Job Vacancy Survey, a representative survey among human resource managers in Germany reporting information about their most recent recruitment case. Based on the finding that firm size and productivity are positively correlated we show that: (1) Larger firms invest more effort into formal search activities; (2) Firms invest more formal search effort in labour markets for more educated workers; (3) The positive relationship between firm's size and formal search intensity can also be observed for firms that don't use referrals; (4) Firms that use referrals as a search channel invest less effort into formal search compared to firms that don't use referrals; (5) Larger firms are less likely to hire an applicant by referral than smaller firms, and (6) More intensive search effort leads to a larger number of applications." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Rebien, Martina & Stops, Michael & Zaharieva, Anna, 2017. "Formal search and referrals from a firm's perspective," IAB-Discussion Paper 201733, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:201733
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    References listed on IDEAS

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    Cited by:

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    3. Neugart, Michael & Zaharieva, Anna, 2018. "Social Networks, Promotions, and the Glass-Ceiling Effect," Center for Mathematical Economics Working Papers 601, Center for Mathematical Economics, Bielefeld University.
    4. Sevak Alaverdyan & Anna Zaharieva, 2019. "Immigration, Social Networks, and Occupational Mismatch," SOEPpapers on Multidisciplinary Panel Data Research 1033, DIW Berlin, The German Socio-Economic Panel (SOEP).
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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Stellenbesetzung ; informelle Kommunikation ; Mitarbeiter ; offene Stellen ; Personalauswahl ; Personalbeschaffung ; Qualifikationsanforderungen ; IAB-Stellenerhebung ; qualifikationsspezifische Faktoren ; Suchverfahren ; Unternehmensgröße;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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