What Makes a Contact Valuable? Hiring, Organizational Networks and the Advantages of Network Closure

What makes contacts at hiring organizations valuable for job seekers? Network-structural research emphasizes the importance of open networks for transmitting job leads, but studies of organizational networks show that closure helps employees influence decision-makers and increases group identification. We test the benefits of open and closed workplace networks for job seekers using administrative data on 72,173 hires in Denmark. Using networks of ex-coworker ties and job moves matched to plausible alternatives, we assess the utility of contacts' workplace networks for hiring. Closure in the workplace networks of job seekers' contacts increases the probability that job seekers will join contacts' organizations by 51%. We go on to test three potential mechanisms. Closure helps contacts influence managers, who will in most cases have hiring authority, and integrates job seekers and their contacts into their workplace. We find no evidence that closed networks facilitate hiring by conveying complex information to employers and candidates.