Why Interview Sources Matter in Hiring: Exploring Glassdoor Interviews Data
August 12, 2015
Conventional wisdom among HR managers is that personal connections matter. Employee referrals have long been a preferred hiring method among employers, allowing companies to tap the personal networks of current employees as a talent pool for recruiting.
But how much do personal connections matter compared to other hiring channels? Do employee referrals lead to more successful job matches once other differences in job seekers, employers and industries are taken into account?
This report presents statistical evidence based on an analysis of a sample of more than 440,000 job interview reviews drawn from those posted on Glassdoor since 2009. The results quantify how six different sources of job interviews affect the odds of a successful job match in the labor market:
Source: Glassdoor Economic Research (glassdoor.com/research)
Interview Outcomes
Sixty-five percent of Glassdoor job interview reviews reported having received a job offer following the interview, while 35 percent reported getting no offer. Most job offers were accepted. Of the 65 percent who received an offer, 88 percent of them (or 57 percent of total interviews) accepted the offer—what economists call a successful “job match”—while the remaining 12 percent (or 8 percent of total interviews) rejected it.
Figure 2 shows a breakdown of outcomes from reported job interviews from our sample data.
Figure 2.
Source: Glassdoor Economic Research (glassdoor.com/research)
Job Offers Fluctuated After the Recession
Not surprisingly, the fraction of job interviews that led to an offer has fluctuated widely since the end of the 2007-2009 recession. The percentage of interviews resulting in job offers was roughly 56 percent during the weak post-recession labor market in 2009. That percentage grew sharply during the subsequent labor market recovery, with the likelihood of receiving a job offer reaching 68 percent by 2014.
Figure 3 shows the trend in the percentage of job interviews resulting in a job offer over time in our sample.
Figure 3.
Source: Glassdoor Economic Research (glassdoor.com/research)
Best Sources for Hiring
Are some job interview sources more likely to lead to a successful job match? To answer that question, we used a simple method known as a “linear probability model” to quantify which interview sources were associated with a higher—or lower—chances of an accepted job offer.
For each interview source, the results show how each affects the likelihood of a successful job match once all other factors are statically controlled for, including differences in industries, companies, job titles, and even job seeker demographics such as gender, age and education.[1]
Key Results
The most effective job interview channel we examined was employee referrals. Referrals are associated with a 2.6 to 6.6 percent higher chance of an accepted job offer, all else equal. This is consistent with the prevailing conventional wisdom among HR managers today and illustrates the power of employee referrals as an effective recruiting tool.
Two other job interview sources also had a positive effect: staffing agency referrals and in-person connections with employers. Staffing agencies were associated with a -0.5 to 5.3 percent impact on the chances of an accepted job offer, while in-person referrals are associated with a -0.1 to 3.9 percent impact on successful job matching.
The remaining three interview sources were all associated with lower odds of a successful job match. College or university referrals were linked with -17.9 to -13.5 percent lower chances of an accepted offer. Online applications (without any employee referral or other in-person connection with the employer) were associated with a -15.0 to -11.4 percent lower probability of an accepted offer. And finally, recruiter referrals were linked to a -11.4 to -7.4 percent lower chances of a successful job match.
These results help highlight the importance of context and information for producing quality job matches. Employee referrals are effective because they provide useful context both to job seekers and companies: job seekers gain insights about prospective employers from the employee, and companies learn about the reputation of candidates from the recommender. In the case of other interview sources such as online application and recruiter referrals, employees can replicate this type of context and information through the use of sites like Glassdoor, which have the potential to similarly improve job match quality without having an in-person connection with employers.
Figure 4 shows the key results. It shows the range of estimates for how each interview source affects the probability of a successful job match once we’ve controlled for all other factors. In all six cases, the effects are statistically significant.[2]
Figure 4.
Source: Glassdoor Economic Research (glassdoor.com/research)
Which Employers Use Employee Referrals?
Our analysis shows employee referrals can be an effective hiring tool. Which employers today rely most heavily on employee referrals?
In Figure 5, we show the top 30 U.S. employers with the largest percentage of job interview candidates reporting an employee referral on Glassdoor. In general, the list is dominated by relatively fast-growing technology companies such as Salesforce, Juniper Network and Twitter, as well as more traditional consulting and financial employers that rely on a highly skilled workforce such as Booz Allen Hamilton, Slalom Consulting and Northern Trust.
In Figure 6, we show the opposite list: the 30 U.S. employers with the fewest number of job seekers reporting employee referrals on Glassdoor. Government, retail and food service, and energy and transportation employers are prominent in the list. In the case of government employers, strict regulatory requirements often limit hiring through personal connections. Retail and food service employers tend to rely less heavily on employee referrals due to ease of filling low-skilled positions without them. However, the appearance of many energy, consumer products, and consulting employers is surprising given the above evidence about the effectiveness of referrals.
Figure 5.
Source: Glassdoor Economic Research (glassdoor.com/research)
Figure 6.
Source: Glassdoor Economic Research (glassdoor.com/research)
Conclusion
Conventional wisdom has long been that employee referrals are an effective recruiting tool. This article helps quantify precisely how effective multiple interview sources, including employee referrals, can be using a unique data source: a large sample of job interview reviews submitted anonymously to Glassdoor. Of the six job interview sources we examined, employee referrals performed best, boosting the chances of a successful job match by 2.6 to 6.6 percent. As employers search for ways to streamline hiring processes, our results suggest tapping the personal networks of employees remains an effective hiring strategy.
Footnotes:
[1] For full details of the analysis, see the methodology section below.
[2] See the Appendix below for full table of regression results.
Methodology
This analysis is based on a sample of 441,553 job interviews from U.S. job seekers submitted to Glassdoor from 2009 to 2015. Regression estimates are based on a standard linear probability model. The analysis controls for monthly and yearly fixed effects; demographic characteristics of job seekers such as gender, age and education; state and industry controls; and job-title and employer-specific fixed effects. All estimates presented are for the 95 percent confidence intervals from estimates in Column 4 of the Appendix table, which is our preferred specification. In all specifications, “other” is the excluded seventh job interview source.
Appendix: Full Regression Results
The below table shows our full table of regression results. The estimates are based on a regression of the probability of an accepted job offer on dummy indicators for job interview characteristics, including interview sources, industries, employers, job titles, months, years, and states. The columns correspond to alternative specifications with different sets of control variables; the included controls for each column are indicated by “X” marks below the table. Coefficients can be interpreted as the predicted marginal effect of each interview source on the probability of an accepted job offer.
Table 1. Full Results for the Regression of the Probability of an Accepted Job Offer on Various Job Interview Sources
- Employee referrals
- In-person applications/connections
- Staffing agencies
- Recruiters
- Online applications
- College and university referrals
- Does the source of job interviews matter? We examine which hiring channels tend to perform best using a unique data set: job interview reviews posted on Glassdoor.
- We find job interviews from employee referrals are much more likely to lead to an accepted job offer; employee referrals boost the odds of a successful job match by a statistically significant 2.6-6.6 percent.
- Job interviews based on college or university referrals, online applications without any personal contact with employers and recruiter referrals led to significantly less likelihood of an accepted job offer.
- Despite being an effective a hiring tool, employee referrals were only reported by roughly 10 percent of candidates who submitted job interview reviews to Glassdoor.
- Employers in the technology, consulting and finance industries rely most heavily on employee referrals according to Glassdoor reviews. Government, retail and food service, and energy and transportation employers use employee referrals least often.
Source: Glassdoor Economic Research (glassdoor.com/research)
Interview Outcomes
Sixty-five percent of Glassdoor job interview reviews reported having received a job offer following the interview, while 35 percent reported getting no offer. Most job offers were accepted. Of the 65 percent who received an offer, 88 percent of them (or 57 percent of total interviews) accepted the offer—what economists call a successful “job match”—while the remaining 12 percent (or 8 percent of total interviews) rejected it.
Figure 2 shows a breakdown of outcomes from reported job interviews from our sample data.
Figure 2.
Source: Glassdoor Economic Research (glassdoor.com/research)
Job Offers Fluctuated After the Recession
Not surprisingly, the fraction of job interviews that led to an offer has fluctuated widely since the end of the 2007-2009 recession. The percentage of interviews resulting in job offers was roughly 56 percent during the weak post-recession labor market in 2009. That percentage grew sharply during the subsequent labor market recovery, with the likelihood of receiving a job offer reaching 68 percent by 2014.
Figure 3 shows the trend in the percentage of job interviews resulting in a job offer over time in our sample.
Figure 3.
Source: Glassdoor Economic Research (glassdoor.com/research)
Best Sources for Hiring
Are some job interview sources more likely to lead to a successful job match? To answer that question, we used a simple method known as a “linear probability model” to quantify which interview sources were associated with a higher—or lower—chances of an accepted job offer.
For each interview source, the results show how each affects the likelihood of a successful job match once all other factors are statically controlled for, including differences in industries, companies, job titles, and even job seeker demographics such as gender, age and education.[1]
Key Results
The most effective job interview channel we examined was employee referrals. Referrals are associated with a 2.6 to 6.6 percent higher chance of an accepted job offer, all else equal. This is consistent with the prevailing conventional wisdom among HR managers today and illustrates the power of employee referrals as an effective recruiting tool.
Two other job interview sources also had a positive effect: staffing agency referrals and in-person connections with employers. Staffing agencies were associated with a -0.5 to 5.3 percent impact on the chances of an accepted job offer, while in-person referrals are associated with a -0.1 to 3.9 percent impact on successful job matching.
The remaining three interview sources were all associated with lower odds of a successful job match. College or university referrals were linked with -17.9 to -13.5 percent lower chances of an accepted offer. Online applications (without any employee referral or other in-person connection with the employer) were associated with a -15.0 to -11.4 percent lower probability of an accepted offer. And finally, recruiter referrals were linked to a -11.4 to -7.4 percent lower chances of a successful job match.
These results help highlight the importance of context and information for producing quality job matches. Employee referrals are effective because they provide useful context both to job seekers and companies: job seekers gain insights about prospective employers from the employee, and companies learn about the reputation of candidates from the recommender. In the case of other interview sources such as online application and recruiter referrals, employees can replicate this type of context and information through the use of sites like Glassdoor, which have the potential to similarly improve job match quality without having an in-person connection with employers.
Figure 4 shows the key results. It shows the range of estimates for how each interview source affects the probability of a successful job match once we’ve controlled for all other factors. In all six cases, the effects are statistically significant.[2]
Figure 4.
Source: Glassdoor Economic Research (glassdoor.com/research)
Which Employers Use Employee Referrals?
Our analysis shows employee referrals can be an effective hiring tool. Which employers today rely most heavily on employee referrals?
In Figure 5, we show the top 30 U.S. employers with the largest percentage of job interview candidates reporting an employee referral on Glassdoor. In general, the list is dominated by relatively fast-growing technology companies such as Salesforce, Juniper Network and Twitter, as well as more traditional consulting and financial employers that rely on a highly skilled workforce such as Booz Allen Hamilton, Slalom Consulting and Northern Trust.
In Figure 6, we show the opposite list: the 30 U.S. employers with the fewest number of job seekers reporting employee referrals on Glassdoor. Government, retail and food service, and energy and transportation employers are prominent in the list. In the case of government employers, strict regulatory requirements often limit hiring through personal connections. Retail and food service employers tend to rely less heavily on employee referrals due to ease of filling low-skilled positions without them. However, the appearance of many energy, consumer products, and consulting employers is surprising given the above evidence about the effectiveness of referrals.
Figure 5.
Source: Glassdoor Economic Research (glassdoor.com/research)
Figure 6.
Source: Glassdoor Economic Research (glassdoor.com/research)
Conclusion
Conventional wisdom has long been that employee referrals are an effective recruiting tool. This article helps quantify precisely how effective multiple interview sources, including employee referrals, can be using a unique data source: a large sample of job interview reviews submitted anonymously to Glassdoor. Of the six job interview sources we examined, employee referrals performed best, boosting the chances of a successful job match by 2.6 to 6.6 percent. As employers search for ways to streamline hiring processes, our results suggest tapping the personal networks of employees remains an effective hiring strategy.
Footnotes:
[1] For full details of the analysis, see the methodology section below.
[2] See the Appendix below for full table of regression results.
Methodology
This analysis is based on a sample of 441,553 job interviews from U.S. job seekers submitted to Glassdoor from 2009 to 2015. Regression estimates are based on a standard linear probability model. The analysis controls for monthly and yearly fixed effects; demographic characteristics of job seekers such as gender, age and education; state and industry controls; and job-title and employer-specific fixed effects. All estimates presented are for the 95 percent confidence intervals from estimates in Column 4 of the Appendix table, which is our preferred specification. In all specifications, “other” is the excluded seventh job interview source.
Appendix: Full Regression Results
The below table shows our full table of regression results. The estimates are based on a regression of the probability of an accepted job offer on dummy indicators for job interview characteristics, including interview sources, industries, employers, job titles, months, years, and states. The columns correspond to alternative specifications with different sets of control variables; the included controls for each column are indicated by “X” marks below the table. Coefficients can be interpreted as the predicted marginal effect of each interview source on the probability of an accepted job offer.
Table 1. Full Results for the Regression of the Probability of an Accepted Job Offer on Various Job Interview Sources
|
Variable |
(1) | (2) | (3) | (4) | (5) |
| Applied Online |
-0.143*** |
-0.142*** |
-0.139*** |
-0.132*** |
-0.118*** |
|
(0.004) |
(0.004) |
(0.006) |
(0.009) |
(0.009) |
|
| College or University |
-0.248*** |
-0.183*** |
-0.197*** |
-0.157*** |
-0.165*** |
|
(0.004) |
(0.005) |
(0.008) |
(0.011) |
(0.010) |
|
| Employee Referral |
0.033*** |
0.054*** |
0.043*** |
0.046*** |
0.038*** |
|
(0.004) |
(0.005) |
(0.007) |
(0.010) |
(0.010) |
|
| In-Person |
0.121*** |
0.076*** |
0.061*** |
0.019* |
0.036*** |
|
(0.004) |
(0.005) |
(0.007) |
(0.010) |
(0.010) |
|
| Recruiter |
-0.150*** |
-0.121*** |
-0.124*** |
-0.094*** |
-0.091*** |
|
(0.004) |
(0.005) |
(0.008) |
(0.010) |
(0.010) |
|
| Staffing Agency |
0.010* |
0.030*** |
0.021** |
0.024 |
0.032** |
|
(0.006) |
(0.007) |
(0.011) |
(0.015) |
(0.015) |
|
| Observations |
441,533 |
275,567 |
116,809 |
116,809 |
116,809 |
| Adjusted R-squared |
0.058 |
0.091 |
0.104 |
0.160 |
0.157 |
| Month Dummies |
X |
X |
X |
X |
X |
| Year Dummies |
X |
X |
X |
X |
X |
| Industry Dummies |
X |
X |
X |
||
| State Dummies |
X |
X |
X |
X |
|
| Demographic Controls |
X |
X |
X |
||
| Job Title Dummies |
X |
||||
| Company Dummies |
X |
Note: *, **, and *** indicate statistical significance at the 10, 5 and 1 percent levels, respectively. Heteroskedasticity robust standard errors are shown in parentheses. Source: Glassdoor Economic Research (glassdoor.com/research)