Granovetter, Mark. 1995. Getting a Job: A Study of Contacts and Careers. Chicago: University of Chicago Press.
Getting a Job
This study is about the flow of information within social networks as it pertains to job mobility (i.e, finding a new job).
Granovetter's study focuses on how the information that facilitates mobility is secured and disseminated. He found that professionals rely primarily on their set of personal contacts to get information about job-change opportunities rather than more formal or impersonal routes.
He relates his findings to the classical economic theory of labor markets, which state that a given amount of demand will result in a certain level of employment. Past studies had shown that formal mechanisms of job allocation rarely accounted for more than 20% of placements. Most jobs were found informally through friends or through direct application.
In the majority of cases people hear about new jobs through their personal contacts. No matter how great the net advantage of a new opportunity, the person can't take advantage of it unless they know about it.
PTM (professional, technical, managerial) workers use three means to find out about job opportunities -- formal means, personal contacts, and direct application. Formal means include advertisements, public and private employment agencies, interviews and placements sponsored by universities and professional associations. In most cases there is an intermediary between the person and the employer. Personal contacts are people that the person has come to know for reasons other than the search for a job. Direct application means the person has gone directly to the firm and has not heard about a specific opening.
In this sample 56% used personal contacts, 18.8% formal means, and 18.8 used direct application . Most respondents prefer personal contacts (as do employers), and believe the information is of higher quality. The feel that better jobs are obtain through personal contacts. Not everyone pursued jobs via personal contacts because not everyone has useful contacts (a major treatise in this study). The structure of their social network determines what possibilities are open to him.
As a result older, managerial workers with more social contacts are more likely to find their next job via personal contacts, as are blue-collar workers where the context of their work is less specialized and pervasive.
Chapter One: Job Search and Economic Theory
In the classic sense labor is a commodity- employers are buyers, employees are sellers and wages is the price. Price disparities between companies will be reduced as employees flow the most lucrative, eventually reaching wage equilibrium. But classic markets exist only in textbooks.
There are various social and organizational constraints that limit free movement of labor in the economy, the most pertinent being the lack of perfect information. One can consider info search in labor markets in two components -- the search for new employers (extensive search) and the determination of their offers (intensive search). In job hunting the transaction once found is not secure -- both sides must evaluate the prospect.
It seems that most people do not actually search in the formal economic sense (i.e, finding and considering a large number of opportunities) especially after their first job or with higher-paying positions. Often it is a colleague that informs them of a particular job. Only 57.4% of individuals actively searched.
Interestingly, when a contact passed on a source of job information in 57.9% of the time the contact took the initiative, and about half the time the contact knew the other person was looking for a job. Sometimes the job-seeker wasn't actively seeking but just keeping his eyes open for possibilities. There are often quasi-seekers and quasi-jobs, jobs that open up if the right person comes along.
Therefore the supply and demand curves don't seem to apply to job search and employment, especially at higher wage levels. Instead, a matching process seems to go on, which traditional search models don't consider. Supply and demand can't be analyzed separately. Prices doesn't match men to jobs, as espoused in classic economics theory. "Job finding is more than a rational process. it is heavilly embedded in other social processes that closely constrain and determine its course and results." p. 39
Chapter Two: Contacts and Their Information
Most contacts came from family or work. Older professionals relied more on personal contacts than younger professionals. The contact usually was either was the "employer" in the company or an employee of the company. Individuals of higher status seem to have more personal contacts. One's probability of making a major occupational change is roughly proportional to the percentage of one's personal contacts what are in occupations different from one's own.
Chapter Three: Dynamics of Information Flow
Information moves by diffusion through social contacts unrelated to market behavior, though the movement isn't necessarily random. It seems that since there are strong overlaps in social circles with strong ties, relationships with wesk ties are more numerious and potentially profitable to the job-seeker. The motivations for the source to provide information range from "being nice" to being perceived favorably in the target company or network.
Chain length refers to the number of people the information passed before reaching the job-seeker. In the study most found were either length 0 or 1. Longer chains become more like formal means.
Chapter 4: Dynamics of Vacancy Structure
In most cases the new employee either replaced someone who had left or was in a newly created position. Managers were more likely to have positions created for them and usually they got them through personal contacts. Often new jobs are created with the type of person they would like in mind.
Much of the movement is through vacancy chains, where one vacancy spurs a filling which creates a vacancy and so on.
Chapter 5: Contacts - Acquisition and Maintenance
In the study he found that the contacts that led to new jobs were not recent -- most were relationships lasting two years and beyond. Some were friends of relatives. Contacts are not a random, stochastic process nor a Markov chain dependent on only the past contact experience. Jobs are found through contacts created throughout one's career, often ones that had been barely maintained.
Chapter 6 : Career Structure
Mobility is self-generating -- people who have more jobs tend to accumulate more contacts which allows them to seek out new employment more effectively through personal contacts.
Chapter 7: Some Theoretical Implications
Thus the true "economic man" who searches the market for employment is at a distinct disadvantage to those "social man" that use their personal contacts acquired over time to help find new opportunities.
However, their actions can be consider rational, in that personal contacts may give more intensive information about opportunities than formal search. Informal search on the part of companies is useful to them because it effectively narrows the search window for them as well and makes things more manageable. People and companies also develop rule sets that narrow possibilities.
As a result, "routine social mechanisms which are quite rational at the micro-level have the macro level result of institutionalizing social inequality".
Chapter 8: Mobility and Organizations
Much of formal organizational theory has ignored the fact that much of organizational life centers around cooperative contacts with other orgnizations (with the exception of things like interlocking directorates). The flow of people between organizations is facilitated by the contacts that are developed and maintained by the two organizations (whether at a macro org level or a micro individual level). Workers bring perceptions and norms of one company to another, further estabilishing relationships.
Chapter 9: Comparative Perspectives
Are these results peculiar to Newton Massachusettes? In history there are various ways jobs were located. Some were defined by kinship obligations or geographical location. Others were found in "shape-ups" (like longshoreman or professors at conferences). Others go through labor contractors. The main point is that there are similarities between pre and post industrial organizations of work and recruitment.
Chapter 10: Applications
This suggests that minorities would be better served by helping them develop more personal contacts with employers than to try to enhance computerized matching or some such formal scheme. But often this is difficult, as there is no informal structure of minorities within organizations from which to build them. And developing useful contacts often takes years, with random and unexpected results. Often the friends and contacts of the unemployed are unemployed themselves, which further worsens the situation.
Entering via personal contacts also can bring quicker entry into internal clicques and groups.
Afterword 1994: Reconsiderations of a New Agenda
The general theme was that "despite modernization, technology, and
the dizzying pace of social change, one constant in the world is that where
and how we spend our working hours, the largest slice of life for most adults,
depends very much on how we are embedded in networks of social contacts".