Heterogeneity in firms’ recruitment practices: New evidence from representative employer data

Abstract

The hiring and recruitment process is one of the main challenges to the success of companies and a significant driver of total labor costs. We use representative employer data for German private-sector establishments with at least 50 employees to explore recent developments in employer search, selection, and screening activities over the years of 2012–2018. We document changes in hiring policies over time and address heterogeneity across establishments related to size, ownership, and industry sector. Our results show that although establishment characteristics are correlated with different facets of hiring behavior, there is no homogeneous pattern for employer search and selection instruments. We highlight differences of hiring practices targeted at managerial versus non-managerial new hires. Finally, we outline potential mechanisms and research gaps for future work and discuss managerial implications. JEL Codes: J21, J63, M51