Recruitment practices under scrutiny: A latent-profile analysis of family firms’ approaches to recruit non-family employees

Abstract

Recruitment of qualified non-family employees is a challenge for many family firms. Job seekers from outside may be wary of the family firm employment practice and the family themselves may have an informal approach to finding employees which often relies on word of mouth and produces a limited pool of talent. In this study we investigate adopted recruitment practices and the factors behind recruiting non-family workforce as we seek common elements, explanations and outcomes. Applying latent-profile analysis to the recruiting practices of 259 family firms we explore sets of adopted recruitment practices, their respective predictors, including socioemotional wealth, and potential outcomes. These analyses reveal five latent classes: (1) reduced recruitment; (2) online high cost recruitment; (3) full scope recruitment; (4) offline informal recruitment; and (5) formal high cost recruitment. In sum, our findings suggest that substantial differences in family firms’ approaches to recruitment exist, providing further evidence for the heterogeneity of family firms. Finally, findings are discussed with regard to limitations and implications for future research.