More companies hiring through internal referrals, online applications carry a stigma

This might help explain why the ranks of long-term unemployed have risen: more companies are finding new employees through referrals from current employees.

The trend, experts say, has been amplified since the end of the recession by a tight job market and by employee networks on LinkedIn and Facebook, which can help employers find candidates more quickly and bypass reams of applications from job search sites like Monster.com.

Some, like Ernst & Young, the accounting firm, have set ambitious internal goals to increase the proportion of hirings that come from internal referrals. As a result, employee recommendations now account for 45 percent of nonentry-level placements at the firm, up from 28 percent in 2010…

The company’s goal is 50 percent. Others, such as Deloitte and Enterprise Rent-A-Car, have begun offering prizes like iPads and large-screen TVs in addition to traditional cash incentives for employees who refer new hires.

This sounds like a sort of Granovetter social network job hunt run amok: companies are looking for ways to minimize bad hires but in doing so, they are relying more and more on their current employees which freezes out people outside these social networks. But, it also suggests a job hunting strategy beyond Internet sites: people looking for work should look to impress their contacts who are currently working. This could be helpful to a lot of job searchers as it would cut down on online applications, cover letters, and the “black hole” (as it is called in the article) where applicants get very little feedback.

Here is a little bit about the advantages of companies hiring referred employees:

Referral programs carry important benefits for big companies. Besides avoiding hefty payouts to recruiters, referred employees are 15 percent less likely to quit, according to Giorgio Topa, one of the authors of the Federal Reserve Bank of New York study.

Social networks improve business efficiency…but might also leave certain people out in the cold.

Shared cultural interests leads to hiring at elite firms

A new sociological study argues having the right cultural interests or pursuing certain cultural activities can lead to getting a job at elite firms:

Big-time investment banks, law firms and management consulting companies choose new workers much as they would choose friends or dates, zeroing in on shared leisure activities, life experiences and personality styles, a new study finds…

As a result, evaluators described their own and others’ firms as having distinct personalities related to employees’ extracurricular interests and social styles. Companies ranged from “sporty” and “scrappy” to “egghead” and “country club.” One outfit even specialized in hiring people with drab personalities.

Top-ranked firms uniformly favored applicants who cited upper–middle class leisure pursuits such as rock climbing, playing the cello or enjoying film noir.

Picking employees from the same cultural basket may have pluses and minuses, Rivera adds. Hiring people with common traits and interests may create a cohesive work force. But shunning prospective employees with different life histories could also make firms susceptible to reaching decisions quickly without evaluating alternative ideas.

This challenges the American ideal of meritocracy where hard work should lead to a job. While the study suggests these cultural interests don’t matter as much when organizations are hiring for more technical jobs, it does matter for white-collar and upper-class jobs. This could also challenge the role of college courses: how many college classes are about developing a “scrappy” or “country club” approach to life? In contrast, the experience outside the classroom at some colleges (plus the applicants’ earlier life history) might contribute quite a bit to learning about and then developing these cultural skills.

It would also be interesting to look more at the personalities involved in hiring and branding that companies develop. Marketing today often involves selling a brand and image more so than focusing on the particulars of a product. Is this branding simply about marketing or does it bleed through the culture of the entire organization?

Increasing racial segregation in the American workplace

Two sociologists argue there is evidence that some American workplaces have become more racially segregated in recent decades:

The results of our research found in part that there has been a trend toward racial re-segregation among white men and black men since 2000 and increased segregation since 1970 between black women and white women in American workplaces — so much so that it has eliminated progress made in the late 1960s. This is not simply an academic question, but a fundamental problem with American society. While most of us morally embrace equal opportunity and race and gender equality, we find that America is still a long way from those commitments. Only by confronting our shortcomings as a society can we address them…Distressingly, 19 of the 58 industries we surveyed — nearly one-third of all industries — showed a trend toward racial re-segregation between white men and black men over the last dozen years. Transportation services, motion pictures, construction, securities and commodities brokerages are some of the sectors that reflect this trend. In addition, re-segregation since 1970 between black and white women in workplaces has eliminated progress made in the late 1960s.

Transportation services, railroads, publishing and many low-wage manufacturing industries show increased segregation between black and white women. Unfortunately, increased access to private sector managerial jobs for black men and black women came to a grinding halt more than 30 years ago as well. Meanwhile, black women’s employment segregation from white women has actually grown somewhat, as white women made continued gains into traditionally white male jobs…

Where has there been progress? In general, African Americans tend to do better in workplaces that use formal credentials to make hiring decisions. Minorities and white women have made the most progress in professional jobs. These occupations require specific educational credentials to be considered for employment. African Americans also progress in those relatively rare large, private-sector firms that monitor their managers diversity track record.

It sounds like jobs based on social networks tend to be more segregated while jobs based on credentials allow more opportunities for non-whites. This reminds me of the sociological study Race and the Invisible Hand: How White Networks Exclude Black Men From Blue-Collar Jobs. Royster found in studying vocational schools that although black and white students were getting similar educations, the instructors and school gave white students more access to the primarily white social networks in the vocational trades while black students were left more to fend for themselves.

 

I would be curious to know how job segregation lines up with residential segregation, one of the more persistent features of American life in the last century. In other words, are workplaces in more diverse areas less segregated?

Since having a good job is tied to income, building wealth, accessing social networks and social capital, and new opportunities, this is important information. Also, this is a reminder fighting segregation is not a linear process.

 

Audit study shows “employers less likely to interview openly gay men for job openings”

Audit studies have been used for decades to show discrimination by race and sex. In these studies, two otherwise equal candidates are separated by one feature, perhaps race, perhaps first name, perhaps gender. Then the researcher looks at the differing response rates from mortgage companies or landlords or businesses. For example, see this notable 2003 study that showed that whites with a criminal record had better job prospects than blacks with no criminal records. This mode of analysis was recently utilized in an article in the latest issue of the American Journal of Sociology to show differing response rates for gay men looking for a job versus those applicants who were not openly gay:

The study, which is the largest of its kind to look at job discrimination against gay men, found that employers in the South and Midwest were much less likely to offer an interview if an applicant’s resume indicates that he is openly gay. Overall, the study found that gay applicants were 40 percent less likely to be granted an interview than their heterosexual counterparts…

For the study, Tilcsik sent two fictitious but realistic resumes to more than 1,700 entry-level, white collar job openings — positions such as managers, business and financial analysts, sales representatives, customer service representatives, and administrative assistants. The two resumes were very similar in terms of the applicant’s qualifications, but one resume for each opening mentioned that the applicant had been part of a gay organization in college.

“I chose an experience in a gay community organization that could not be easily dismissed as irrelevant to a job application,” Tilcsik writes. “Thus, instead of being just a member of a gay or lesbian campus organization, the applicant served as the elected treasurer for several semesters, managing the organization’s financial operations.”

The second resume Tilcsik sent listed experience in the “Progressive and Socialist Alliance” in place of the gay organization. Since employers are likely to associate both groups with left-leaning political views, Tilcsik could separate any “gay penalty” from the effects of political discrimination.

The results showed that applicants without the gay signal had an 11.5 percent chance of being called for an interview. However, gay applicants had only a 7.2 percent chance. That difference amounts to a 40 percent higher chance of the heterosexual applicant getting a call.

Has this methodology not been used before when looking at discrimination against gays? If not, I’m a little surprised.

The methodology of the audit study is interesting: it essentially is an experiment where one detail between the resumes or applications is changed to isolate its effect. In this study, the detail is what college organization the applicant worked for. It was clever to differentiate between these two particular organizations in order to rule out a political effect.

I assume the next step would be to expand this study to more states/locations and to more job categories beyond “entry-level, white collar job openings”? How much would the results differ if the study involved more blue collar jobs or managerial, white collar jobs?

When I’ve told students about audit studies, several have raised issues of deception: aren’t these fake applicants? Yes, but the harm to the companies is minimal outside of some time spent looking at them. (However, from what I have read about how much time hiring people look at the hundreds of job applications they see for these types of positions, looking at one or more applications wouldn’t seem to matter.) I do wonder if hiring people have ever spotted these applications from researchers – or the pool of applications is simply so broad that they see all sorts of interesting things.

Line-drawing and merits in job hunting

Although not tailored to the specifics of the legal job market, an analogous debate concerning the mechanics of the academic job market is taking place over Inside Higher Education (hat tip:  Tax Prof Blog).

First up:  Joshua A. Tucker in Academe as Meritocracy, arguing

  1. that only the paternalistic would stifle the dreams of potential Ph.D students, and
  2. that a robust meritocracy exists within the academy.

As Tucker puts it:

Like major league baseball, a successful academic career is a very good gig. Do we really owe every 22-year-old who is admitted to a Ph.D. program the right to that career solely on the basis of getting into a Ph.D. program? Or is it enough to give them a chance to succeed, knowing full well that not all of them will?…Like it or not, academia is a meritocracy. It may be a highly flawed meritocracy susceptible to overvaluing labels or fads of the day, but ultimately tenure is bestowed on those who earn the respect of their peers, and the more of your peers that respect you, the more job offers you are going to get and the more money you are going to make.

Tucker does recognize that a certain amount of truth-in-advertising is necessary, but he seems comfortable with letting admitted Ph.D students decide for themselves whether they should actually attend:

I fully believe we need to be honest with graduate students about what they are getting themselves into — the same way a minor league baseball player needs to know what the odds are of making it to the majors — but if they want to take a shot at achieving success in this kind of a career, I see no reason why we should excessively limit the number of people who have the opportunity to do so. And at the end of the day, that’s the trade-off here: the fewer students we admit to Ph.D. programs, the earlier we make the decision regarding who gets to be the next generation of professors.

While I sympathize with Tucker’s paternalism argument, I think his analysis fails to appreciate that lines must be–and are–drawn somewhere.  All of us are unfit for certain occupations, and each of us must either (1) realize this ourselves or (2) be told this by others.  Moreover, this must happen (1) sooner or (2) later.  Tucker does not escape the inevitable moment of line-drawing simply by choosing “later”, i.e., after his Ph.D. admission committee has sent out its acceptances.

Perhaps I can illustrate what I mean by expanding on Tucker’s example of professional baseball.  Personally, I am objectively unfit to play for a minor league baseball team, let alone to be drafted into the majors.  Let us suppose that, for whatever reasons, I am too deluded to realize this for myself and will need to be told by others that I will never be a major league baseball player.  Should a minor league team still admit me to its roster?  What about a college team?  High school varsity team?  At what point should I be told, “Kid, you don’t stand a chance of ever playing in the majors.  You should pursue another career”?

This is a difficult question that will need to be answered differently for different individuals based on their own specific circumstances.  Tucker, however, does not attempt to answer this question or provide guidelines on how it should be answered under various circumstances.  Rather, he simply implies that Ph.D. students should be admitted first and allowed to sort themselves out later, regardless of changing job market conditions or the odds of success.

In contrast to Tucker’s faith in the meritocratic process, “Dean Dad” responds in “Meritocracy and Hiring” that the academy is NOT the sort of meritocracy that should be generating smug feelings of superiority:

As someone whose job it is to actually hire faculty, I can attest that merit is only a small part of the picture….In this funding climate, we can only afford to staff a few of the positions (whether faculty, staff, or administration) that we need. If the position doesn’t exist, then the relative merit of the prospective candidates means exactly zero….Of course, there’s also the basic incompatibility of life tenure with the idea of meritocracy. If incumbents don’t have to keep proving themselves against newcomers, then you do not have a meritocracy. Tenure violates the foundational assumption of meritocracy.

The key is to recognize that hiring is always more about the employer than about the employee. Employers hire to solve problems they consider important. If you’re the best darn German professor who ever walked the planet, congratulations, but I don’t need you. I don’t doubt your brilliance, your hard work, your civic virtue, or your habit of helping old ladies across the street. They just don’t matter. It’s not about you.

I think Dean Dad is onto something here.  In discussions about job markets, the “right-place-at-the-right-time” factor is far too often overlooked .  Despite, for example, evidence that simply graduating from college in the middle of a recession can permanently lower lifetime earnings.  Dean Dad helpfully reminds his readers that failure to land a job in one’s chosen profession does not necessarily have moral overtones:

I’m convinced that one reason some people won’t let themselves let go of the dream, despite years of external signals suggesting that they should, is a sense that it would reflect a personal moral failing. They’ve identified so completely with the ‘meritocracy’ myth that they feel a real need to redeem themselves within it….[T]hey see the status of “tenured professor” as a sort of validation of everything they’ve done. Leaving the academy would be admitting defeat and accepting failure; lifelong “A” students, as a breed, aren’t very good at that. It’s not what they do….[L]et’s recognize the academic job market as the uneven, unpredictable, often unforgiving thing that it is. Good people lose. Frankly, some real losers sometimes win. It’s not entirely random, of course, but it’s a far cry from a meritocracy.

Although Dean Dad is writing about the academic job market, I think this is also a helpful point for recent law graduates to remember, especially in the midst of a recession.  Things don’t always work out, and that’s OK.  Sometimes, you just have to let it go and try something new.

The land of fake businessmen

Atlantic’s Mitch Moxley reports on a Chinese business practice: hiring fake businessmen to help craft an image. Part of the job:

As we waited for the ceremony to begin, a foreman standing beside me barked at workers still visible on the construction site. They scurried behind the scaffolding.

“Are you the boss?” I asked him.

He looked at me quizzically. “You’re the boss.”

Actually, Ernie was the boss. After a brief introduction, “Director” Ernie delivered his speech before the hundred or so people in attendance. He boasted about the company’s long list of international clients and emphasized how happy we were to be working on such an important project. When the speech was over, confetti blasted over the stage, fireworks popped above the dusty field beside us, and Ernie posed for a photo with the mayor.

If this is common practice, couldn’t some companies lose face (rather than build their image) when others point out or find out that their businessmen are really fakes?

An odd subtext: the requirements for the job included “a fair complexion and a suit.” The fake businessmen are there to indicate that the Chinese company has connections. A “darker complexion and a suit” doesn’t fit the bill for connections? Perhaps a “darker complexion, a suit, and an American accent”?