Finding the right path to the top: How past interorganizational moves impact executive selection outcomes

Abstract

Research summary: Executives are a critical strategic resource but often build careers across multiple organizations. We explore how firms value that interorganizational mobility by studying executive selection. We suggest that hiring firms will value the diverse experience and adaptability that past mobility across organizations fosters, but that prior mobility can also signal a higher retention risk or lack of competency. Using data from an executive search firm, we employ search-fixed effects model and structural equation models to estimate candidates' probabilities of receiving a job offer. We find that candidates' prior mobility indirectly increases their chances of being hired by increasing their functional diversity and reducing their tenure with their employer below 10 years. Net of these effects, prior mobility has a negative effect on hiring. Managerial summary: Executives are increasingly building their careers across organizations. How do prospective employers evaluate their records of past moves when they are considered as external hires? We propose that by moving firms, individuals can accumulate diverse experience and become more adaptable, but employers may be concerned about retention or performance issues for those with records of frequent moves. Using executive search data, we find that prior mobility is valuable to the extent that it builds diverse functional experience; once it is accounted for, we find that prior mobility decreases the likelihood of receiving an offer. Further, staying at the same employer for 10 years or longer is unfavorable due to employers' concerns about adaptability and firm-specific skills. Our survey of fifty-four CHROs resonates with these findings.