Focus on Research

December 7, 2012 2:59 pm

Something for the weekend

When applying for a job you might be forgiven if you highlight your technological or academic achievements, but according to new research this could well be the wrong approach.

Lauren Rivera, an assistant professor of management and organisations and sociology at Kellogg School of Management at Northwestern University, suggests that often employers are more interested in hiring someone they would like to be friends with, or an individual who shares the same hobbies.

The professor stresses that while all employers want people with the core skills to do the job, beyond that “employers really want people who they will bond with, who they will feel good around, who will be their friend and maybe even their romantic partner. As a result, employers don’t necessarily hire the most skilled candidates.”

Prof Rivera says that employers often place cultural fit – how complementary a candidate’s self-presentation, background and leisure pursuits are to the existing pool of employees – as the most important aspect at the job interview stage.

“It is important to note that this does not mean employers are hiring unqualified people,” says Prof Rivera. “But... in many respects employers hire in a manner more closely resembling the choice of friends or romantic partners than how one might expect employers to select new workers.”

Prof Rivera looked at professionals from investment banking, law firms, management consultancies and a recruiting department. She believes that to some extent her findings can be applied to other occupations, however it nevertheless depends on other factors as well, such as technical demands.

“If you were hiring a neuro surgeon, I think there would be more of an emphasis on performance than cultural fit,” she says.

Her paper, Hiring as cultural matching: the case of elite professional service firms” is published in this month’s American Sociological Review.

With the holiday season around the corner many people will be tempted to spend money that they cannot afford and may then borrow too much money at too high a cost.

New research into poverty examines why low-income individuals borrow at high interest rates, even though this is contrary to their financial self interests. The authors suggest that individuals tend to focus on the most pressing issues in their lives and neglect other important factors which do not need to be immediately addressed. For example next month’s rent might be ignored in favour of buying this month’s presents.

Anuj Shah an assistant professor of behavioural science at Chicago Booth says that facing a scarcity of resources, such as money, creates a mindset that focuses on current needs and leads to behaviour such as borrowing. To demonstrate this theory Prof Shah, with colleagues Sendhil Mullainathan, a professor of economics at Harvard University and Eldar Shafir, professor of psychology and public affairs at Woodrow Wilson School, Princeton University, ran a series of experimental games in which participants could earn rewards. Players were either described as rich or poor.

The academics found that ‘poor’ participants focused more intensely on each round of the game and neglected future concerns and when given the opportunity to ‘borrow’ money at exorbitant interest rates would do so. “As a result, poor participants did worse when they had the ability to borrow than when they did not.” These results did not hold true for the ‘rich’ participants.

“These studies show that if you take otherwise sophisticated people and put them in conditions of scarcity, they exhibit the same behaviours we see among the poor,” says Prof Shafir.

The authors say that their research has far-reaching policy implications as it shows that scarcity leads to choices that those with less scarcity know they must avoid. For example, understanding that when facing tough financial circumstances individuals may opt for immediately convenient solutions, could lead to interventions which could then lead to changes in behaviour.

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