What is the Right Mix? Toward a Compensatory Theory of Employer Attractiveness

Abstract

Despite its long history, employer attractiveness research so far has almost exclusively studied large corporate firms and focused on the question which employer benefits influence firms’ employer attractiveness. However, we know only little about to what extent these findings generalize to more resource-constrained firms, such as small companies and start-ups. To address this void in the literature, this study integrates the theory of instrumental-symbolic employer benefits with a neo-configurational perspective to propose and test a compensatory theory of employer attractiveness that explains how start-ups achieve high employer attractiveness. Using set-theoretic methods, we analyze 219 start-up job postings and match them with ratings of their employer attractiveness. Across all job postings in our sample, we find two configurations constituting attractive employment offerings by start-ups: one focusing on remuneration and employees’ work attitude and the other focusing on employee development and a strong company culture. Addressing recent calls in the literature, we also show that context – i.e., start-ups’ business focus and human capital needs – matters in shaping the nature of the configurations associated with higher employer attractiveness. Our study extends extant research by testing a compensatory theory of employer attractiveness and advances our understanding of talent recruitment in start-up firms.