‘Professional’ and ‘family- friendship’ social ties in hiring practices of Russian employees Evgeniya Balabanova National Research University – Higher School of Economics, Moscow, Russia SASE 26th Annual Conference July 10-12, 2014, Chicago

Using personal contacts in job search and job placement on the Russian labor market widespread most important under the conditions of: – high-tension labor markets – high vacancy competition – applying for prestigious and high-paid positions

Hiring ‘by pulling strings’: vice or norm? ‘Institutional deficiencies’ Society’s ‘traditionalism’ Organizational authoritarianism Favoritism in organizations Anti-meritocracy Social networks provide about 50% of jobs (Loury 2006) Reducing uncertainty, coping with the incompleteness of information Better employee-employer match quality Better newcomer socialization Institutionalization of referrals

Social networks in job search and placement ‘strong’ and ‘weak’ ties (Granovetter 1973) ‘information’ and ‘influence’ networks; ‘informative’ and ‘placement’ referrals (Simon, Warner 1992; Peterson et al. 2000; Yakubovich 2005) ‘professional’ (obtained during one’s career), e.g. – reputation in relevant professional community – referrals from previous workplaces – finding job through professional acquaintances versus ‘off-professional’ (‘old-boys networks’) – friendship and family ties

Social networks in job search and placement: differences of approaches ‘Strong’ vs. ‘weak’ (Granovetter 1973) Intensity and intersection of social contacts Professional ties vs. family and friends networks Sources of social contacts

‘Specialists and managers in Russian business organizations: drivers and tendencies of development’, 2012 Center for Research in Social Organization of a Firm, HSE Faculty of Management

Sampling: 623 white-collar employees in 17 private-owned companies operating in Russia LocationCapital ownershipIndustries Subsamples’ names MoscowRegionsDomestic Foreign (US, German) Prestigious (finances, services, IT) Not prestigious ( manufacturing ) Subsamples’ size, no. of respondents Total, respondents 623

Using of formal and networking channels of job search, % of valid answers, N=518 Channels Moscow Regions Domestic-owned Foreign-owned Prestigious Not prestigious Formal (through vacancy notices, private and public recruiting agencies, CV placing) Social networking, in total Total 100 Social networking, including: Professional (referrals by college / university teachers, colleagues / supervisors from former job, information directly received from company’s representatives) Old-boys networks (family, friends)

Groups most often having network capital Professional males from: – regions; – foreign-owned companies; – prestigious industries (42% among each) respondents from foreign-owned companies in prestigious industries (41%) supervisors (37%) aged (35%) having both professional experience and special education (34%) Family-friendship aged (74%) respondents from domestic companies in prestigious industries (73%) respondents from regions (71%)

Professional and family-friendship capital: opposition or complementarity? Group no. Professional experience (min. 5 years) + special education (55%) Professional social capital (29%) Family- friendship social capital (62%) % in the sample 1 ––– –– – 7 4 +– –+– 4 6 – –– TOTAL100

Job and career satisfaction and organizational commitment: comparison of 8 groups Group no. Professional experience + special education Professional social capital Family-friendship social capital 1 ––– 2 +–– 3 ++– 4 +–+ 5 –+– 6 –++ 7 ––

Index for professional social capital QuestionBinary items included into Index How did you get to know about vacation for your current workplace? From colleagues or people I was acquainted with during my previous job On your opinion, what were the main reasons for your appointment on the current position? Me and my supervisor worked together on my previous job; he/she knows my professional qualities On your opinion, what were the main reasons for getting your current job? My professional reputation among colleagues My supervisor’s opinion based on his/her knowledge of my professional qualities from our previous professional cooperation Why did you leave your previous job? Opportunity to work with high-qualified professionals I know from my previous job

Index for family-friendship social capital QuestionBinary items included into Index How did you get to know about vacation for your current workplace? From my friends or relatives Did you have friends or relatives working in this company before you came here? Yes, among subordinates Yes, my immediate supervisor was among them Yes, among other line or middle managers Yes, among top managers On your opinion, what were the main reasons for your appointment on the current position? Close relationships with my immediate supervisor Referrals from my friends or relatives My reputation of ‘insider’ for this company; I’m well in with influential people here On your opinion, what were the main reasons for getting your current job? Referrals from my friends or relatives Referrals from some influential persons Friendship or family ties with key personnel in the company My supervisor’s opinion based on his/her knowledge of my loyalty and agreeableness Why did you leave your previous job? Opportunity to work with pleasant people I’m well in with (friends, relatives)

Regression models for employees’ well-being, standardized β-coefficients Variables Career promotions Family material well-being Wages are higher than average in the city for the same job Job satisfaction Organizational commitment Career satisfaction IIII I I I I Professional qualification (1=having both 5-year work experience and special education),103*,053-,033-,009-,033-,009-,082*-,059,014-,057,022-,017 Professional social capital,107**,023,152***,071,121**,059,149***,116**,112*,074,091*,033 Family-friendship social capital,080*,076*-,035,029-,031-,005-,006-,034-,030-,006-,021-,031 Location (1 = Moscow, 2 = regions),029 -,234*** -,044 -,073 -,151*** -,092* Capital ownership (1 = domestic, 2 = foreign),044,302***,213*** -,050,135**,004 Industry 1 = prestigious, 2 = not prestigious) -,027 -,152*** -,094* -,235*** -,169*** -,175*** Gender (1 = male, 2 = female) -,070,038 -,002,001,106**,034 Age -,066 -,081* -,061 -,009,235***,046 Position (1 = without subordinates, 2 = having subordinates),376***,216***,087*,131**,127**,303*** Adjusted R 2,023**,159***,020**,229***,011*,072***,022**,082***,010*,158***,005,125***

Conclusions (1) Having professional social capital (‘new- boys networks’, Faulconbridge et al. 2009) Getting better workplaces (prestigious industries, foreign-owned companies, superior position) Social and economic well-being

Conclusions (2) ‘old-boys networks’ is rather a compensatory hiring mechanism that provides only one-time or initial advantages for relatively uncompetitive applicants, e.g. – the first position in the career – getting a job after a period of unemployment or being out of the labor force – moving from the ‘bad’ workplace to a ‘good’ one using informal relatives’ or friends’ contacts to find jobs is rather a last resort for low-resource workers which stay on their jobs because of few alternative choices rather than because of better match quality (Loury 2006)

Directions for further research Professional reputation and professional social networks: ‘meritocratic’ or ‘anti-meritocratic’ factors of development?