 Employer Search Behavior: Reasons for Internal HiringLabour Economics, 2021, vol. 73, issue C Abstract: This article studies reasons for internal hiring, i.e., re-assigning or promoting an employee instead of recruiting an external candidate. We exploit a representative survey of establishments covering all European Union countries to measure employers’ search for internal candidates. Internal search is a widespread practice: 66% of establishments typically search internally. The accumulation of specific skills and the provision of incentives for employees are the main advantages of hiring internally in the theoretical literature. Ordered probit estimates show that on-the-job training and internal search are positively associated. On the contrary, incentive schemes such as variable pay are not associated with employer search. These results help to assess competing theories, and in particular, suggest that specific human capital is an important driver of internal hiring. Finally, we uncover two interesting facts that need further research: internal hiring is less likely in service firms and in non-competitive product markets. Keywords: Hiring; Recruiting; Internal labor market; Employer search (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:73:y:2021:i:c:s0927537121000993 DOI: 10.1016/j.labeco.2021.102064 Access Statistics for this article Labour Economics is currently edited by A. Ichino More articles in Labour Economics from Elsevier |
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