Recruiting and Selecting for Fit

67 Pages Posted: 27 Feb 2018

See all articles by Ricardo Alonso

Ricardo Alonso

London School of Economics & Political Science (LSE) - Department of Management

Date Written: February 9, 2018

Abstract

This paper studies employer recruitment and selection of job applicants when productivity is match-specific. Job seekers have private, noisy estimates of match value and firms perform noisy interviews. A job seeker's application depends on her perceived hiring probability given hiring standards, while firms consider the applicant pool's composition when setting hiring standards. Improvements in either the accuracy of job-seekers' estimates of fit or in the accuracy of a firm's interview can lower profits when it dissuades applications. I show that firms shun perfect tests of fit and avoid advertising to poorly informed job seekers for fear of dissuading suitable job seekers from applying. The model explains the adoption of previously unused costless testing technologies as application costs fall (e.g., following a move to online applications).

Keywords: hiring, recruitment, selection, employer testing

JEL Classification: D82, L23

Suggested Citation

Alonso, Ricardo, Recruiting and Selecting for Fit (February 9, 2018). Available at SSRN: https://ssrn.com/abstract=3124315 or http://dx.doi.org/10.2139/ssrn.3124315

Ricardo Alonso (Contact Author)

London School of Economics & Political Science (LSE) - Department of Management ( email )

United Kingdom

HOME PAGE: http://www.lse.ac.uk/management/people/ralonso.aspx

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