(When) Is Hiring Strategic? Human Capital Acquisition in the Age of Algorithms

(When) Is Hiring Strategic? Human Capital Acquisition in the Age of Algorithms

By
Daniel W. Elfenbein, Adina Sterling
Strategy Science. December
2018, Vol. 3, Issue 4, Pages 555-682

This paper examines when and under what conditions whom to hire is a strategic decision. We identify four mechanisms involved in hiring that add to the “strategicness” of human capital decisions. We posit that, to the degree that human capital outcomes are influenced by these mechanisms, hiring cannot be effectively delegated or treated independently from a firm’s other strategic decisions, nor will a “best athlete” approach to hiring lead to optimal results. We outline the shifts in scholarly attention required for scholars to conceptualize hiring as a strategic process, and we argue that this conceptualization is critical given the increasing use of data science tools by industry to support and automate hiring decisions. By delving into the mechanisms and conditions that make hiring strategic, we contribute to a broader understanding of how and why firms acquire human capital and highlight gaps and opportunities for future research.