The Relationship Between Recruiting Source, Applicant Quality, and Hire Performance: An Analysis by Sex, Ethnicity, and Age

This study investigated both an applicant pool and its resulting class of new hires in an attempt to clarify a number of empirical questions concerning recruiting source effectiveness. A pre‐established database of applicants and hires for the job of life insurance agent in a large insurance company was analyzed for recruiting activity. Differences in applicant quality and new hire survival were found in favor of the informal recruiting sources. A second measure of hire success, new business commission credits, failed to show differences across recruiting sources. The informal recruiting sources yielded significantly higher selection ratios than did formal sources for all groups. Examination of recruiting source use showed significant group differences, with females and blacks using the formal recruiting sources more frequently than males, non‐minorities, and Hispanics. While the informal recruiting sources yielded higher quality applicants and more successful hires for all groups, this research cautions that the implementation of revised recruiting policies must be carefully monitored for adverse effects on protected groups.