Electronic Thesis and Dissertation Repository

Thesis Format

Integrated Article

Degree

Doctor of Philosophy

Program

Business

Supervisor

Parker, Simon C.

Abstract

Recruiting talent is arguably one of the most significant challenges facing entrepreneurs today. The ability to find and acquire high quality human resources is particularly critical for a start-up’s ability to survive and grow. However, start-ups are often disadvantaged in the labor market because they lack financial capital, reputation, and stability. While practitioners have repeatedly claimed that recruitment is one of the biggest challenges they face, little research has explored the question of how start-ups can better recruit employees. To understand how start-ups can better recruit employees, it is important to approach the question from both the employers’ and employees’ perspectives. This dissertation follows this approach.

One of the factors that make it difficult for entrepreneurship research on recruitment to advance is the fact that the few potentially relevant studies are scattered over multiple disciplines, such as psychology, economics, strategic management, human resources management, and entrepreneurship. Therefore, Essay 1 (Chapter 2) provides a thorough review of the literature related to entrepreneurial recruitment. After discussing the anecdotal evidence around the importance of recruitment, I categorize the studies into those that take the perspective of 1) employers, and 2) employees, then provide a synthesis of the studies and directions for future research.

One of the challenges associated with entrepreneurial recruitment is the presence of information asymmetry where employers and employees have different information. Essay 2 (Chapter 3) takes the perspective of employers and examines how start-ups can signal their quality to jobseekers to overcome information asymmetry. Specifically, a series of randomized laboratory experiments is used to study whether the level of prestige associated with the founder can increase the attractiveness of a start-up to jobseekers, and if so, whether founder prestige signals founder ability or venture quality.

Essay 3 (Chapter 4) takes the perspective of employees and examines how working for a start-up differs from working for an established firm or pursuing entrepreneurship. Using data from the National Survey of College Graduates, I examine the number of roles undertaken by individuals in different occupational groups, and study how the number of roles relates to earnings and job satisfaction for the three groups.

Summary for Lay Audience

When asked about the challenges associated with entrepreneurship, many entrepreneurs cite recruitment as the biggest challenge they face. The ability to recruit employees is critical for entrepreneurs’ success because entrepreneurs often lack other resources they can use to compete with other firms. This dissertation aims to help entrepreneurs overcome this challenge by studying how entrepreneurs can better recruit talent.

In Chapter 2, I provide a review of the previously published studies that can inform our understanding of recruitment by entrepreneurial firms. This review is divided into two sections. From the employee’s perspective, I examine the studies that are related to three topics: 1) the types of individuals who work for entrepreneurial firms, 2) the working conditions associated with working for entrepreneurial firms, and 3) the implications of working for an entrepreneurial firm on subsequent career choices. From the employer’s perspective, I engage with studies that examine the following three topics: 1) the type of entrepreneurial firms that hire employees, 2) the strategies used by these firms to attract jobseekers, and 3) the implications of hiring employees on the entrepreneurs and the firms they found.

One of the factors that make it challenging for entrepreneurs is that jobseekers often have limited information about entrepreneurial ventures, which makes it difficult for them to evaluate the attractiveness of these ventures. In Chapter 3, I study how start-ups can convey their quality to jobseekers. I focus specifically on the prestigious educational and employment credentials of founders and study how these credentials enhance the attractiveness of their start-ups in the eyes of jobseekers.

Finally, in Chapter 4, I take the perspective of employees. One of key distinctions between pursuing entrepreneurship and working as a wage employee is that entrepreneurs must oversee all aspects of managing their ventures. This essay examines whether the same logic can be applied to compare employees of new firms and employees of incumbent firms. Furthermore, I also examine whether performing a higher number of roles is associated with higher earnings and job satisfaction, and how this relationship differs for entrepreneurs, employees of young firms, and employees of incumbent firms.

Available for download on Friday, June 02, 2023

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