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The value of hiring through employee referrals in developed countries

Mitchell Hoffman

IZA World of Labor, 2017, 369

Abstract: Companies frequently hire new employees based on referrals from existing employees, who often recommend friends or family members. There are numerous possible benefits from this, such as lower turnover, possibly higher productivity, lower recruiting costs, and beneficial commonalities related to shared employee values. On the other hand, hiring through employee referrals may disadvantage under-represented minorities, entail greater firm costs in the form of higher wages, lead to undesirable commonalities, and reflect nepotism. A growing body of research explores these considerations.

Keywords: referrals; hiring; social networks (search for similar items in EconPapers)
JEL-codes: J2 (search for similar items in EconPapers)
Date: 2017
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