Communicating Corporate Culture in Labor Markets: Evidence from Job Postings
61 Pages Posted: 3 Oct 2022 Last revised: 10 Apr 2023
Date Written: April 9, 2023
A company’s culture represents one of the most important factors that job seekers consider. In this study, we examine how firms craft their job postings to convey information about their culture and whether doing so helps attract employees. We utilize state-of-the-art machine learning methods to develop a comprehensive dictionary of key corporate values across the near-universe of job postings. Our main analyses demonstrate that culture information in job postings helps firms better attract job seekers, as it is associated with higher worker inflows and lower subsequent worker outflows. Culture information has a more pronounced effect on worker inflows when job seekers face information frictions in learning about culture through other sources. Additional analyses indicate that interviews are more likely to lead to job offers for firms highlighting culture in their job postings, indicating that culture information helps job seekers sort into culturally fit companies. Overall, our findings suggest that job postings are an important mechanism for communicating cultural values to prospective employees and attracting talent.
Keywords: Corporate Culture; Information Asymmetry; Job Search and Mobility; Job Postings
JEL Classification: C45; D83; M14; J63
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