Networks That Matter: The Impact of Recruiting Source versus Organizational Demography on Turnover

Abstract

We argue that gender and race organizational demography are more important than recruiting source in predicting employee turnover. This study analyzes data on employees of a U.S.-based products and services company to determine the differential contributions of organizational demography and recruiting source to employee retention.We find that, strikingly, both gender and race organizational demography have a greater effect on turnover than does recruiting source use. Employees hired via employee referrals into buildings where they are not the majority are more likely to exit than employees hired via formal sources into buildings where they are the majority.