Where you come from could decide whether a prospective employer hires you—or not.
A new study finds employers are a startling 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 thousand jobs and found that employers react more strongly to negative hiring experiences than to positive ones.
Leung studies labor markets and hiring at UC Berkeley’s Haas School of Business. His findings can be found in “Learning to hire? Hiring as a dynamic experiential learning process in an online market for contract labor,” conditionally accepted at 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 a mere three percent for hiring 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, from between 2000 and 2013 analyzing which applicants applied and who was eventually hired. This longitudinal approach revealed a trend of profiling based on nationality across a variety of job categories encompassing jobs as diverse as logo design, website programming, article writing, legal advice, and voiceovers.
“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.”
Elance, now known as UpWork, was one of the first online platform for freelance or so-called gig jobs, representing eight million registered employers and four million registered freelancers from 223 countries. In order to find work, job seekers completed an application on the Elance website. The job postings included responsibilities, budget requirements, expected timeframe for completion, and required skills. On the freelancer’s profile, employers were able to see his or her country of origin.
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. However, the study implies that nationality profiling in the hiring process potentially hurts employers, too, because they may lose out on good talent,” says Leung.
Leung suggests one possible solution: if employers were encouraged to hire people they typically would not hire, employers may learn how successful these workers can be.
“If you are already predisposed to believe that a worker from a particular country is going to be bad and they prove you right, you will be even less likely to hire from that country again,” Leung says. “But that means you may be missing out on other good workers from that country.”
In additional analyses, Leung finds that switching countries after a negative experience does not result in an employer hiring from a ‘better’ country or necessarily having a better subsequent experience.
As the global gig economy grows, Leung hopes the findings will be useful in helping employers hire the best workers without being discriminatory.