DP10662 Recruitment and Selection in Organizations
This paper studies employer recruitment and selection of job applicants when productivity is match-specific. Job seekers have private, noisy estimates of match value, while the firm performs noisy interviews. Job seekers' willingness to incur the application costs varies with the perceived hiring probability, while the firm considers the applicant pool's composition when setting hiring standards. I show that changes in the accuracy of job seekers' estimates, or the firm's interview, affect application decisions, and both can raise hiring costs when they discourage applications. Thus, the firm may favor noisier interviews or prefer to face applicants that are less informed of their person-organization fit.