Elite Pipelines: How Elite School Ties Are Reflected in Interfirm Employee Migration

Abstract

Recent research has pointed to pipelines, or sequenced hiring of individuals from the same source organizations over time, as a common practice employed by firms to reduce labor market imperfections and create human capital resource advantages. We extend this literature by considering how pipelines may emerge not just out of strategic intent but also out of informal social processes reflecting network transitivity and homophily. Using bipartite social network analysis techniques in a sample of 110 public U.S. electronics component manufacturers, we argue and find evidence for transitive effects between firms’ employee-based ties to elite educational institutions and the formation of interfirm employee pipelines. We demonstrate that pipelines are more likely to form between firms that both hire educational elites, especially when those firms share ties to the same elite schools and when those shared elite schools are executives’ alma mater(s). We also find that these effects tend to be more pronounced when the focal firm has higher growth potential, encouraging mobility by attracting potential elite candidates and facilitating the two-way matching process in labor markets. Our theory and findings contribute to a better understanding of informal processes underlying pipeline formation and specifically demonstrate how hiring tendencies may lead to closed recruiting networks characterized by elite replication.