Recruiting “entrepreneurial” candidates has become a key strategy for increasing innovation and agility at most large corporations, yet the difficulty of finding and hiring innovative talent has almost become a truism. A new study from the Strategic Entrepreneurship Journal suggests candidate scarcity might not be the root cause of the entrepreneurial hiring gap — the issue might lie more with a lack of corporate culture alignment to entrepreneurship at the tactical level.
“Post-entrepreneurial job applicants suffer a substantial penalty,” said Waverly Ding, an associate professor of management and organization at the University of Maryland, and co-author of the study. “Employing entrepreneurial-oriented recruiters boosts the odds of hiring post-entrepreneur talents, but at larger organizations this strategy loses its impact.”
Ding, and co-authors Hyeun Lee of University of Toronto and Debra Shapiro of University of Maryland, asked 275 experienced recruiters to choose a top candidate from four objectively identical resumes: two with company founder listed as the last-held position and two listing executive. Recruiters were 23 to 29% less likely to rank previous startup founders as top candidates. The study’s recruiters were also asked the size of their organization and to indicate “How strongly have you considered stating your own company,” on a four-point scale.
“As a general trend, the higher the job recruiter’s own entrepreneurial aspiration, the less severe a penalty they assigned to a post-entrepreneur job candidate,” said Lee. “Apparently, recruiters with more entrepreneurial aspiration more favorably interpreted qualities in the post-entrepreneur applicant.”
The authors conducted a second study to help reveal what desirable personal qualities these recruiters might be identifying in entrepreneurs. They asked 325 undergraduate business majors to evaluate founder versus executive resumes for competence, leadership, impact, trustworthiness, commitment to the organization, and success, while measuring the evaluator’s entrepreneurial aspirations. Entrepreneurially oriented participants rated post-entrepreneur resumes more highly on competence, leadership, and impact.
“We were surprised, given the tendency for entrepreneurs re-entering the workforce to be stigmatized by presumed failure, that the success of post-entrepreneur applicants was rated no differently,” Shapiro said. “This finding bolsters our confidence in the ingroup bias-related explanation we provide for our primary study’s key finding — namely, that the penalty against post-entrepreneurs as job-candidates is weaker for recruiters who have entrepreneurial aspiration.”
Startup founders fared best with an entrepreneurially minded recruiter at a smaller organization, possibly because smaller businesses give recruiters larger role in decisions, place more value on a generalist skillset, or align more with a startup’s more agile culture. At larger organizations, the recruiter’s entrepreneurial aspirations had no impact on evaluations. The authors posit that this may be because recruiters judge entrepreneurs as a poor cultural fit with the increased rigidity and bureaucracy typical at large organizations.
The study confirms a familiar struggle between senior-level vision and frontline employee practices. Leadership might openly prioritize hiring for innovation and entrepreneurship, but if their organization does not already have a culture that emphasizes these values, recruiters are not likely to hire for them. Building that affiliation bias in recruiters — and making them aware of inherent biases against entrepreneurs — might be the key to solving the hiring for innovation dilemma.
Find a full explanation of the study as well as the authors’ methods for creating objectively identical resumes and evaluating recruiter ratings in the full text, available in the Strategic Entrepreneurship Journal.