NO ONE LIKES TO BE SECOND CHOICE

01 Apr 2019

Allowing Human Resource (HR) departments to have the ultimate say instead of the manager on whether a candidate should be hired can improve an organisation’s chances of hiring someone suitable. This is according to research by Yair Antler published in the April 2019 issue of The Economic Journal.

The researcher finds that delegating some of the hiring decisions to another party, who may be less informed about who might be the best candidate for the role, can improve an organisation’s hiring process. For example, a senior manager or HR representative who is not particularly knowledgeable in a specific field could decide after a first round of interviews which of the remaining candidates to hire.

According to the study this is because two stage processes enable organisations to control the information they convey to job candidates. Candidates who pass the screening stage infer some positive information about their ranking compared to the other candidates.

This two-stage process means that they can also withhold additional negative information from the top candidates so that none of them ever learn that they were not the organisation’s first choice.  As the researcher explains, this is relevant because a job candidate who feels that they are not the employer’s first choice might refuse to fill a vacancy that they would otherwise have been happy to fill.

The explanation for this is that candidates often try to assess how much their new employer likes them and appreciates their skills. This may demonstrate to them the likelihood of being respected, treated well and the chances of promotion or dismissal in the new position. This may be of fundamental value to the candidate due to ‘social motives’ – where people tend to like, think highly of and want to interact who those who like them.

According to the research, candidates may form their assessment about the extent they will be valued based on observables such as the time between the posting of a vacancy and the time a recruiter contacts them for an interview. It could also be the order in which they are interviewed and how many are considered for the position.

The author explains that the employer’s problem is therefore strategic – what order should they approach the candidates? Could the employer benefit from withholding information from the candidates or delegating the decision to an uninformed party?

To test this, the study considers a model in which an employer is trying to fill a position by approaching potential candidates without knowing if they are available for the job.  If the employer does not take into account ‘social motives’, the employer will approach the candidates according to his preference list. The author assumes that candidates will reject the employer’s offer if they are unavailable or if they believe they are not ranked first on the employer’s preference list. Therefore, if the first candidate is unavailable, the offer will be rejected, and the employer will take the offer to the person who is ranked second. This second candidate will also reject the job as they will infer from the timing of the offer that they are ranked second.

If instead the employer takes into account that the favourite candidate is unlikely to be available, they could adopt a different strategy and first approach a candidate who is ranked lower on the preference list but is more likely to be available. According to the research, this has implications on the inferences made by the candidates. For example, if the employer approaches lower-ranked candidates first, a candidate who is approached first must infer that they are not the employer’s top choice and will reject the offer. 

This suggests that the employer might want to hide their preferences from the candidates. Making offers privately is a natural way to do that. However, this will prevent the employer from signaling their true preferences to the most preferred candidates (who might find it flattering) and making the position more attractive for them. Therefore, when the candidate’s social motives are strong and conveying the employer’s preferences to some of the candidates is important, making offers privately is not ideal.

Instead, delegating some of the decisions to another party hides some of the information from the candidates. Therefore, while at a glance letting HR have the ultimate say on a candidate might seem inefficient, it can actually improve an organisation’s chance of hiring a suitable candidate.

No one likes to be second choice” by Yair Antler is published in the April 2019 issue of The Economic Journal.

Yair Antler

assistant professor at the Coller School of Management at Tel Aviv University | yairantl@post.tau.ac.il