Attracting talent through diversity at the top: The impact of TMT diversity and firms' efforts to promote diversity on employer attractiveness

Tobias Dauth, Stefan Schmid, Sebastian Baldermann and Fabienne Orban

European Management Journal, 2023, vol. 41, issue 1, 9-20

Abstract: At a time where firms encounter a “race for talent”, it is crucial for many MNCs to present themselves as attractive employers. Failing to position themselves in the international labor market can reduce firms' ability to acquire valuable international human capital, thereby generating disadvantageous organizational effects. Against this backdrop, drawing on signaling theory and employer branding literature, our paper aims to shed light on the association between nationality diversity in the executive suite and MNCs' employer attractiveness. Our lines of argument build on the notion that top management team composition can affect MNCs' efforts to promote diversity among their employees. This focus on diversity, in turn, can affect MNCs' employer attractiveness. Examining firms from various European countries, we find that top management team nationality diversity is positively associated with firms' employer attractiveness for foreign job seekers. We also show that a firm's efforts to promote diversity mediate the relationship between TMT nationality diversity and employer attractiveness. We therefore advance the academic debate on diversity as an employer branding tool and a means to enhance employer attractiveness. In practical terms, we also provide valuable insights for firms wishing to transform into (more) diverse entities.

Keywords: Diversity; Diversity management; Employer attractiveness; Employer branding; International top managers; Nationality diversity; Signaling theory; TMT; Upper echelons (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1016/j.emj.2021.10.007

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