When We Hire, Should We Consider How Well-Connected Candidates Are?

Does an organization benefit when its employees are highly connected to workers in other firms and industries? Or does the benefit simply flow to the employees themselves, as they perhaps are building better future job prospects through these connections. Shelley Li, Frank Nagle, and Aner Zhou set out to examine this question. They built an enormous dataset comprised of approximately 9 million employees with 2 billion individual employee relationships at more than 7,000 publicly held companies in the United States. The scholars discovered that companies whose workforces are more connected tend to produce more valuable innovations. The authors summarized their conclusions as follows:

Although employees do not necessarily make connections for the company’s benefit, we find that companies’ centrality in the employee network positively predicts company value. This effect is largely driven by mid-level employees. Furthermore, company centrality in the employee network predicts company innovation inputs (R&D spending), and controlling for these inputs, predicts the quantity, scientific impact, and economic value of companies’ patented innovation outcomes.

Nagle commented to HBS Working Knowledge about their findings: "What we’re trying to say is there are many more jobs than you might imagine where having the right connections can be helpful to your company.”  He also notes the implications for managers as they search for job candidates. 

“Managers, when they hire somebody, know to look for many different qualities. How well-educated are you? How much job experience do you have?  Today, in some jobs, such as sales or higher-level management, managers may think about how well-connected you are, but our work shows that might be a consideration for a broader set of jobs.”

I'm quite interested to know more about the particular jobs where these connections matter most.  Beyond science, engineering, and sales roles, are there other positions where these networks are important?  Moreover, rather than simply thinking about hiring people who are quite connected, I'm curious to know how organizations can help their employees build more relationships with workers in other organizations.  What can business leaders do to help foster these connections for their middle managers?  

Quitting Your Job the Right Way

 

Image source: https://uvaro.com/blog/the-great-resignation

Over the last few years, I have heard alumni from my university (Bryant University in Smithfield, Rhode Island) repeatedly stress the importance of "leaving well" when resigning from a company.   Many young people may not recognize the benefits of quitting your job the "right" way, but it is very important.  You never know when you may encounter some of those colleagues again in a future role.  Moreover, your reputation will spread in what are often small circles and dense networks.   Take great care to protect your personal brand when quitting a job.  

What does it mean to quit the right way?  For starters, it means giving more than the usual two weeks notice if possible.  Help make the transition smoother for the individual taking over for you.   Set them up to thrive, rather than simply "mailing it in" during your final weeks.  That individual will be incredibly grateful, and others at the firm, including your managers, will take notice.  Don't bad mouth your boss or the company either.  When asked why you are leaving, focus on the exciting new opportunity ahead of you, rather than the challenges and problems at your current employer.  Your frustrations may be very real, but expressing them publicly does little good in most cases.  Perhaps most importantly, reach out to those people who have mentored you, provided you assistance, taught you a new skill, or given you a key opportunity at your current employer.  Express your gratitude to them for these contributions to your personal development.  Finally, spend some time with any individuals you have mentored during your time at this employer.  Make sure they know that you are still available to act as a sounding board, and express your interest in their continued development.  If you take these actions, you will feel much better about your departure, and you will have build lasting goodwill that may benefit you in the future.  

How to Network Effectively

We all know that having tons of LinkedIn connections does not make you an effective networker.  The quantity of connections does not serve as the primary driver of networking efficacy.  The nature of those connections matters.  Researchers have compared two types of networkers for years.  First, there are those that engage intensely in a closed network.  They connect with others who share similar knowledge, expertise, and experience.  In short, they stick to their silo.  They aim to deepen their expertise in a particular field.  Second, there are the brokers.  These people are good at bridging among pools of people with different expertise.  They help connect people in different closed networks.   Brokers are incredibly important.  

Who is the more effective networker - the person who builds connections with others to deepen their expertise in a particular area or the broker who bridges multiple silos?  Ronald S. Burt and Jennifer Merluzzi have discovered that "network oscillation" actually proves to be the most effective networking strategy.  They studied 350 investment bankers at one particular financial services firm, and they tracked them over four years.  Here's an excerpt from a University of Chicago story about their research:  

The short answer: the most-successful people take advantage of both systems—sometimes they broker, and other times they dive into closed networks. In fact, without this movement back and forth, their networks give them no advantage at all... Analyzing salary and bonus packages as well as year-end performance surveys proved revealing for Burt and Merluzzi. Bankers who were able to move between brokering and working in closed networks during the year reaped the greatest rewards. These individuals formed ties across the organization, gaining access to new projects and opportunities. But once they found an opportunity, they quit brokering and engaged deeply in their new project. When that project ended, they once again tapped into their broad network of contacts at the firm to find the next interesting project. Swinging between working intensely on a project and networking more widely did have a cost: these bankers sometimes saw their reputations suffer while they were on the bench. But the hit was temporary. And the compensation data show that these oscillating bankers made the most money over time.

Alumni & The Recruiting Process

Scholars Jason Greenberg and Roberto Fernandez have conducted an interesting new study about job searches and MBA recruiting. They studied approximately 600 students from a top MBA program over two years.  They conducted the research from a sociological perspective, comparing students who landed jobs through connecting with alumni at various companies (search through social networks) to those students who were hired through formal on-campus recruiting programs (formal search).   They refer to connections with alumni as weak ties (i.e., the students did not necessarily know the alumni prior to the search process; they connected with them through a variety of networking activities).  They found that MBAs are much more likely to accept a job offer landed through alumni networking than through formal on-campus recruiting processes.   That's true, even though the compensation tended to be higher from offers derived through on-campus recruiting programs.   Why is the networking so influential and effective?  Those conversations and connections help the students understand the growth potential associated with a particular job, and that proves to be very important to many talented students... more important than compensation perhaps.   Here's an excerpt from the abstract of the academic paper that the scholars published:   

We find that contrary to conventional wisdom, search through social networks typically results in job offers with lower total compensation (-17 percent for referrals through strong ties and -16 percent for referrals via weak ties vs. formal search). However, our models also show that students are considerably more likely to accept offers derived via weak ties. They do so because they are perceived to have greater growth potential and other non-pecuniary value. On balance, our tests are consistent with Granovetter’s argument that networks provide value by facilitating access to information that is otherwise difficult to obtain, rather than providing greater pecuniary compensation.

What's the implication of this study?   Greenberg puts it this way:  “Based on our findings, recruiters earn a higher ROI when spending time and money on facilitating connections between current employees and potential recruits from their alma mater.   Students look to and trust an alumnus from their school who ‘looks like them in three years’ to provide inside information about growth opportunities within the firm. And that powerful association is a huge influencer when it comes time to accept or reject a job offer.”