Pipeline hiring's effects on the human capital and performance of new recruits

Abstract

AbstractResearch SummaryPipeline hiring, repeatedly hiring individuals from the same external source organization, is a common recruiting practice. Yet, whether this pipeline approach improves incoming human capital quality or performance has limited empirical evidence. We argue that, in cooperative source‐hiring organization contexts, pipelines reduce the information asymmetries present in labor markets in a way that both attracts individuals with higher pre‐entry human capital and predicts postentry performance that surpasses pre‐entry expectations. In the context of particularly intense recruiting competition—American college football—we test and find support for these hypotheses. We also probe key boundary conditions, specifically discontinuity, geographic proximity, and factor market competition that highlight the limits of when the informational advantage is more or less salient.Managerial SummaryOrganizations often recruit through pipelines ‐ repeatedly hiring new workers from the same sources, such as universities or supply partners. Despite how common pipeline hiring is, we have little evidence to suggest if this practice helps hire more capable workers. Using rich data from American college football, we find that players who are successfully recruited through a pipeline tend to be rated as higher potential before joining their college team and perform better, holding their potential constant, in their collegiate career than players who joined from a standalone source. We argue that these benefits come from information flows between recruiting organizations, alumni, and prospective workers. When conditions make these information flows less exclusive, more interrupted, or redundant, we find evidence that the typical pipeline recruiting benefits diminish.