Communicating Corporate Culture in Labor Markets: Evidence from Job Postings

Abstract

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 analyses demonstrate that culture information in job postings helps firms better attract job seekers, as it is associated with higher worker inflows, shorter job posting vacancies, 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.

Keywords: Corporate Culture; Information Asymmetry; Job Search and Mobility; Job Postings

JEL Classification: C45; D83; M14; J63