Executive Briefing: Cultural Similarities Influence Hiring Decisions

Cultural matching influences hiring; bad hires can be costly.

By Dori Meinert Feb 1, 2013

0213cover.gifHiring managers and HR professionals at some elite professional services companies are often more focused on hiring people who share the same hobbies or personalities as them than on hiring people who would do the best work, according to a researcher at Northwestern University in Evanston, Ill.

"Employers really want someone they can bond with, who they will feel good around," says Lauren A. Rivera, an assistant professor of management and organizations and sociology at Northwestern University. "As a result, employers don't necessarily hire the most skilled candidates."

Rivera conducted 120 interviews with professionals involved in undergraduate and graduate hiring in elite U.S. investment banks, law firms and management consulting firms in what she says is the first empirical investigation of whether shared culture between employers and candidates matters in hiring.

More than half of the evaluators in the study ranked cultural fit—the perceived similarities between the applicant and current employees—as the most important criterion at the job interview stage. They ranked it above analytical thinking and communication.

Applicants were screened for baseline skills before being brought in for interviews. At that stage, however, the evaluators chose to focus on what they personally had in common with the applicants, such as lacrosse, rock climbing or playing the cello.

In most cases, cultural fit was formally included in recruitment policies with the aim of increasing retention—even while the companies spent significant resources to increase the diversity of applicant pools, Rivera found.

While basing hiring decisions on cultural similarities could help create a cohesive team, it could also exclude applicants from other socioeconomic classes, Rivera concludes. For example, less-affluent students are more likely to believe that achievement in the classroom matters more than sports and hobbiesand focus their energies accordingly, she says.

The study, "Hiring as Cultural Matching: The Case of Elite Professional Service Firms," was published in the December 2012 issue of American Sociological Review.

Bad Hires Can Be Costly

More than 40 percent of U.S. employers estimated that a bad hiring decision had cost their companies more than $25,000 last year, according to a recent CareerBuilder survey.

One-quarter of the respondents estimated the cost to be more than $50,000.

In total, 69 percent of the 2,494 hiring managers and HR professionals responding to the survey said their companies were negatively affected by a bad hire in 2012.

The costs of a bad hire show up in various ways, including less productivity, cost to train a new worker and lowered employee morale.

Not surprisingly, bad hires display behavioral and performance-related issues. The quality of their work is poor, they don't get along with co-workers, they display negative attitudes, and they frequently don't show up for work, the survey respondents reported.

So what's behind all these bad hires? In many cases, it's pressure to fill jobs quickly, a factor cited by 43 percent of the respondents. Twenty-two percent said they didn't know enough about the employees before hiring them, and 9 percent said they didn't check references. Still, one in four respondents weren't sure why their hiring choices turned out badly.

The survey was conducted online by Harris Interactive on behalf of CareerBuilder in August and September 2012.


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