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Field
Abstract
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Before
Employee referrals, when existing employees recommend their connections for open vacancies, are a popular hiring practice. There is also a substantial theoretical literature from sociology and economics about referrals. Yet, causal evidence on the effects of referrals on firm performance remains scarce. We run a field experiment in a retail network of 238 shops in an Eastern European EU country, in which we encourage employees in the treatment shops to recommend people they know for vacancies within the network. Employees in the control shops can also recommend but are not encouraged to do so.
The main outcome variable of our interest is employee turnover. We choose to target turnover with our experimental treatment because it has blighted our study firm for years, averaging at an upwards of 80% per year and costing about 400 Euros per quit. In general many economies feature high levels of turnover which involves the risk of sub-optimal investment of companies in the human capital of their workers. Hence, it seems an interesting question to investigate whether single employers can reduce the turnover or whether this is an economy wide phenomenon. Our second main outcome variable is absenteeism. We choose to target absenteeism with our treatment because absenteeism rates are also very high and expensive for our study firm.
The treatment shops have been divided into four groups, each with a different amount of the bonus offered to the employees whose referrals will lead to a successful employment of five months or longer. The first group will receive a bonus of 50 Euros, the second 90 Euros, the third 120 Euros, and the fourth will receive no bonus. The size of the bonus and the minimum length of employment required for a bonus have been determined based on the existing length of employment data and on the survey of the production employees of the same firm who will not be part of our experiment.
We select employees into treatments or control group by store using stratified randomization. In addition to store average quit rate, which is our outcome variable, we balance the treatment and control group in terms of store sales, size and location, as these characteristics are correlated with staff turnover. We work with store and regional managers and an employee survey to ensure that we can detect and minimize information spillovers between stores in different treatment groups.
The experiment starts at the end of November 2015.
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After
Employee referrals, when existing employees recommend their connections for open vacancies, are a popular hiring practice. There is also a substantial theoretical literature from sociology and economics about referrals. Yet, causal evidence on the effects of referrals on firm performance remains scarce. We run a field experiment in a retail network of 238 shops in an Eastern European EU country, in which we encourage employees in the treatment shops to recommend people they know for vacancies within the network. Employees in the control shops can also recommend but are not encouraged to do so.
The main outcome variable of our interest is employee turnover. We choose to target turnover with our experimental treatment because it has blighted our study firm for years, averaging at an upwards of 80% per year and costing about 400 Euros per quit. In general many economies feature high levels of turnover which involves the risk of sub-optimal investment of companies in the human capital of their workers. Hence, it seems an interesting question to investigate whether single employers can reduce the turnover or whether this is an economy wide phenomenon. Our second main outcome variable is absenteeism. We choose to target absenteeism with our treatment because absenteeism rates are also very high and expensive for our study firm.
The treatment shops have been divided into four groups, each with a different amount of the bonus offered to the employees whose referrals will lead to a successful employment of five months or longer. The first group will receive a bonus of 50 Euros, the second 90 Euros, the third 120 Euros, and the fourth will receive no bonus. The size of the bonus and the minimum length of employment required for a bonus have been determined based on the existing length of employment data and on the survey of the production employees of the same firm who will not be part of our experiment.
Treatment and control stores were selected randomly. We work with store and regional managers and an employee survey to ensure that we can detect and minimize information spillovers between stores in different treatment groups.
The experiment starts at the end of November 2015.
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Field
Last Published
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Before
July 14, 2018 01:36 PM
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After
August 10, 2018 03:11 AM
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Field
Experimental Design (Public)
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Before
Employee referrals, when existing employees recommend their connections for open vacancies, are a popular hiring practice. There is also a substantial theoretical literature from sociology and economics about referrals. Yet, causal evidence on the effects of referrals on firm performance remains scarce. We run a field experiment in a retail network of 238 shops in an Eastern European EU country, in which we encourage employees in the treatment shops to recommend people they know for vacancies within the network. Employees in the control shops can also recommend but are not encouraged to do so.
The main outcome variable of our interest is employee turnover. We choose to target turnover with our experimental treatment because it has blighted our study firm for years, averaging at an upwards of 80% per year and costing about 400 Euros per quit. In general many economies feature high levels of turnover which involves the risk of sub-optimal investment of companies in the human capital of their workers. Hence, it seems an interesting question to investigate whether single employers can reduce the turnover or whether this is an economy wide phenomenon. Our second main outcome variable is absenteeism. We choose to target absenteeism with our treatment because absenteeism rates are also very high and expensive for our study firm.
The treatment shops have been divided into four groups, each with a different amount of the bonus offered to the employees whose referrals will lead to a successful employment of five months or longer. The first group will receive a bonus of 50 Euros, the second 90 Euros, the third 120 Euros, and the fourth will receive no bonus. The size of the bonus and the minimum length of employment required for a bonus have been determined based on the existing length of employment data and on the survey of the production employees of the same firm who will not be part of our experiment.
We select employees into treatments or control group by store using stratified randomization. In addition to store average quit rate, which is our outcome variable, we balance the treatment and control group in terms of store sales, size and location, as these characteristics are correlated with staff turnover. We work with store and regional managers and an employee survey to ensure that we can detect and minimize information spillovers between stores in different treatment groups.
The experiment starts at the end of November 2015.
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After
Employee referrals, when existing employees recommend their connections for open vacancies, are a popular hiring practice. There is also a substantial theoretical literature from sociology and economics about referrals. Yet, causal evidence on the effects of referrals on firm performance remains scarce. We run a field experiment in a retail network of 238 shops in an Eastern European EU country, in which we encourage employees in the treatment shops to recommend people they know for vacancies within the network. Employees in the control shops can also recommend but are not encouraged to do so.
The main outcome variable of our interest is employee turnover. We choose to target turnover with our experimental treatment because it has blighted our study firm for years, averaging at an upwards of 80% per year and costing about 400 Euros per quit. In general many economies feature high levels of turnover which involves the risk of sub-optimal investment of companies in the human capital of their workers. Hence, it seems an interesting question to investigate whether single employers can reduce the turnover or whether this is an economy wide phenomenon. Our second main outcome variable is absenteeism. We choose to target absenteeism with our treatment because absenteeism rates are also very high and expensive for our study firm.
The treatment shops have been divided into four groups, each with a different amount of the bonus offered to the employees whose referrals will lead to a successful employment of five months or longer. The first group will receive a bonus of 50 Euros, the second 90 Euros, the third 120 Euros, and the fourth will receive no bonus. The size of the bonus and the minimum length of employment required for a bonus have been determined based on the existing length of employment data and on the survey of the production employees of the same firm who will not be part of our experiment.
Treatment and control stores were selected randomly. We work with store and regional managers and an employee survey to ensure that we can detect and minimize information spillovers between stores in different treatment groups.
The experiment starts at the end of November 2015.
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Field
Randomization Method
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Before
We select employees into treatments or control group by store using stratified randomization. In addition to store average quit rate, we balance the treatment and control group in terms of store sales, size and location, as these characteristics are correlated with staff turnover.
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After
Randomization done by computer.
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