Nationality Matters to Employers

Power of Haas Ideas

Nationality Matters to Employers

An applicant’s country of origin can cause bias, says Asst. Prof. Ming Leung

Asst. Prof. Ming Leung

Asst. Prof. Ming Leung

Where you come from could decide whether a prospective employer hires you—or not.

A new study finds employers are 82 percent less likely to hire an applicant from a particular country if they previously had a negative experience with an applicant for a similar job from that same country.

Berkeley Haas Asst. Prof. Ming Leung analyzed 3.9 million applications from freelancers worldwide for more than 290,000 jobs and found that employers react more strongly to negative hiring experiences than to positive ones. His findings are forthcoming in Management Science.

Leung found that when employers have any kind of negative experience with workers from other countries, they are 15 percent less likely to hire people from those countries again—for any type of job. The unlikelihood climbs to 82 percent when a similar job is involved.

Conversely, positive experiences with freelancers led employers to be 25 percent more likely to hire from that country for similar jobs compared to 3 percent more likely to hire from the same country for dissimilar jobs.

In addition to the hiring results, Leung found that freelancers from countries deemed less desirable are also paid less. In order to have the winning job bid, they must offer to do the work for two-thirds less than their peers from other countries.

Leung obtained data on transactions from Elance, an online market for hiring freelancers. Now known as UpWork, Elance was one of the first online platforms for freelance or so-called gig jobs, representing eight million registered employers and four million registered freelancers from 223 countries.

Leung looked at data from 2000 to 2013, analyzing which applicants applied and who was eventually hired. He also accessed a feedback mechanism where employers indicated if a hiring experience was unambiguously positive or negative. This longitudinal approach revealed a trend of profiling based on nationality across a variety of diverse job categories, including logo design, website programming, article writing, and legal advice.

“The comprehensive data allowed me to observe multiple employers hiring from different countries over time,” Leung says. “I was able to see how well an employee did and how employers subsequently reacted to these experiences with workers from those countries.”

Leung says understanding how employers stereotype job applicants from past hiring experiences is important. “I found one negative experience can dramatically alter an employer’s beliefs,” he says. “However, the study implies that nationality profiling in the hiring process potentially hurts employers, too, because they may lose out on good talent. Employers need to learn to hire better from their past experiences.” —Pamela Tom

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