A cloud's silver lining? The impact of policy interventions on new and maturing technology ventures' online recruitment

Abstract

Research summary We synthesize the external enablement (EE) framework with insights from labor economics and strategic human capital to theorize how restrictive policy interventions shape technology ventures' employee recruitment, attending to both sides of the hiring dyad. We engage in a quantitative study of over 220,000 recruiting interactions between technology ventures and candidates on a prominent digital networking platform surrounding the early COVID‐19 pandemic policy responses. We find that firms' recruitment declined significantly while candidates' responsiveness increased during the early COVID‐19 policy interventions. In turn, young technology ventures were enabled to hire more during the interventions, whereas maturing ventures were enabled to hire differently—acquiring candidates with greater entrepreneurial orientation. Our work extends the EE framework to human resource strategies and to heterogeneous enablement across firm age. Managerial summary Hiring is a critical task for young and maturing venture firms, and environmental disruptions can impinge heavily on recruiting processes. We study how restrictive policy interventions shape technology ventures' employee recruitment. Examining over 220,000 recruiting interactions on a major digital platform before and during the early COVID‐19 policy responses, we find that restrictive policy interventions alter the technology venture labor market, deterring some firms from recruiting while making others more successful in their continued hiring efforts. Furthermore, we discover that maturing firms are more adaptive than young firms in their selection of candidates during policy interventions—seeking employees with more entrepreneurial characteristics.

Environmental change, strategic entrepreneurial action, and success: Introduction to a special issue on an important, neglected topic

“…The papers represent different geographical and industry contexts as research settings (e.g., New York; Kenya; news media; technology businesses). Lucas et al (2023) show that effects of environmental change are moderated by the organizational context of venture maturity.…”

“…Several papers in this special issue demonstrate how this task can be approached. For example, Cestino et al (2023), Juma et al (2023), and Lucas et al (2023) study contexts that involve both regulatory and natural‐environmental changes. Motley et al (2023) study interactions between levels of environmental dynamism at two points of venture development.…”

“…Thus, the interplay between environmental changes and agent‐level actions should be a key focus for future theory development and empirical research. In this special issue, Lucas et al (2023), Motley et al (2023), and Wood et al (2023) exemplify how interactions between environmental change and agents can be addressed. Likewise, Juma et al (2023) elucidate a crucial brokering role of agents in the mediation of environmental change for ventures “on the ground.”…”

“…In “A Cloud's Silver Lining? The Impact of Policy Interventions on New and Maturing Technology Ventures,” Lucas et al (2023) focus on effects of regulatory change on more proximal outcomes than “venture performance,” namely applicant and venture recruitment behavior. Synthesizing elements of the external enabler framework, labor economics, and strategic human capital research they use a unique dataset to analyze communications between job candidates and technology ventures to assess effects of the stringency of COVID‐19 regulations across time and space.…”

“…Lucas et al (2023) show that effects of environmental change are moderated by the organizational context of venture maturity.…”