Failed Searches: Hiring as a cognitive decision making process and how applicant variety affects an employer’s likelihood of making an offer

Ming D. Leung

Institute for Research on Labor and Employment, Working Paper Series from Institute of Industrial Relations, UC Berkeley

Abstract: Extant hiring research has generally focused on understanding outcomes for employees and not on outcomes for employers. I theorize on how employer cognitive hiring decision processes affect their likelihood of extending an offer of employment. I argue that greater variety in the job experiences of candidates in the applicant pool complicates employer comparison processes. Hiring is a two-stage process and I predict that comparison difficulties materialize among a winnowed down consideration set of candidates in this second stage. More experienced employers have less difficulty with variety because they have better constructed preferences. Regression analyses from an online market for contract labor on over 640,000 job postings by over 170,000 employers support my contentions. Greater variety in job experiences among job candidates in the applicant pool leads to a lower likelihood a job offer will be extended to any of them. This relationship is completely mediated by the variety in job candidates in the second stage consideration set. The more experience an employer has in hiring in a domain, the less of an issue variety becomes. Results utilizing an instrumental variable and several supporting analyses are also reported. Contributions to the study of evaluation in markets, hiring, and cognitive processes of categorization are discussed.

Keywords: Social and Behavioral Sciences; Failed labor market search; two-stage hiring process; cognitive categories; applicant pool; freelancing; gig economy (search for similar items in EconPapers)
Date: 2016-09-01
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