Social networks, recruitment channels, and wages in the Norwegian labour market

The article documents that a large proportion of employees report that they have found jobs through informal recruitment channels and raises the question of whether being recruited informally leads to wage advantages. Three reasons to expect such a tendency are discussed. 1) Employers reward close personal contacts; this is designated the ''ascriptive employer.'' 2) The theory of ''weak ties'' maintains that using informal channels is efficient for job seekers and that employers have trust in information gathered through such channels. 3) Employers search for new employees through informal channels and offer jobs to the employees they believe are the most competent - that is, headhunting. Employees who are headhunted must also be expected to achieve high bargaining power. The findings indicate that the consequences of recruitment channel differ for lower- and higher-level employees. Getting a job through informal channels does not lead to wage advantages for lower-level employees. The highest wages among higher-level employees are obtained by those who have been contacted informally by the employer (that is, headhunted). Employees on this level also receive higher wages than those who are recruited through formal channels if they got their job by directly contacting the employers or indirectly, through weak ties. Those who get a job through weak ties do not have wage advantages compared with those who contact the employer directly or ave headhunted. Thus, the idea that getting a job through weak ties is especially advantageous for employees is not supported.