Revealing the family: Effects of being perceived as a family firm in the recruiting market in Germany

Abstract

Purpose

Attracting and retaining a skilled labor force represents an important source for competitive advantage for organizations. In the European context, one of the greatest challenges that small- and medium-sized family firms face is attracting high quality non-family applicants. Researchers argue that one of the reasons for this difficulty is tied to the perception that non-family applicants have about family firms as a place to work. The purpose of this paper is to explore the perceptions that applicants have about family firms and their willingness to work in family firms in the German context.

Design/methodology/approach

Using principles from signaling theory, an experiment was conducted to explore the effects that information about family ownership and organizational age had on the perceptions about a firm (i.e. job security, advancement opportunities, prestige, task diversity, and compensation), and applicant’s attractiveness to it.

Findings

Based on the responses from 125 individuals in Germany, the authors found that explicitly communicating information about family ownership did not influence applicant perceptions about the firm or attractiveness to it. Although, information about organizational age affected perceptions of compensation, it did not affect attractiveness to the firm.

Originality/value

This study presents one of the first papers that focuses on the perceptions that non-family applicants have about family firms as a place to work in the European context. Thus, it provides a baseline for comparison to applicant perceptions in other European countries.

Citation

Kahlert, C., Botero, I.C. and Prügl, R. (2017), "Revealing the family: Effects of being perceived as a family firm in the recruiting market in Germany", Journal of Family Business Management, Vol. 7 No. 1, pp. 21-43. https://doi.org/10.1108/JFBM-10-2015-0037