Existing biases in the hiring process often impact former entrepreneurs seeking employment in large companies. This bias stems from the idea that former executives may have a hard time adjusting to the hierarchy of large companies or may not fully commit to their new roles.
This bias ultimately hinders the recruitment of diverse and innovative talent. Therefore, it is essential to evaluate the unique skills these individuals bring. It is also important for employers to promote inclusivity in their recruitment processes. This could encourage workforce diversity and innovation.
The study found that former executives were 35% less likely to be invited to a job interview due to their unique backgrounds and the typical impulsivity of entrepreneurs. The so-called “entrepreneurship penalty” particularly affects people who are returning to the traditional workforce.
Employers may view them as too autonomous, unaccustomed to corporate hierarchies, or prone to starting new businesses in the short term.
Entrepreneurial bias limits diverse hiring
Some hiring managers are wary of unconventional career paths and may prefer candidates with industry-specific, linear experience. This bias is a major obstacle for former business owners looking to return to traditional employment.
Debi Creesman, CEO of Raven Road Partners, says highlighting former entrepreneurs’ unique experiences on their resumes can help alleviate this bias. This study focused on determining whether this bias results from the perception that these individuals are unsuitable, or whether it is the result of bias inherent in the recruitment process itself.
This research shows that corporate recruiters are 60% less interested in the resumes of former executives. This is likely due to the difficulty of assessing self-reported experience or unconventional work history. According to Professor Jasmine Feng, this suggests that entrepreneurs need to strategically emphasize past experience and skills that can be applied to traditional corporate environments.
Interestingly, even successful entrepreneurs face this bias. Software engineers who have launched successful companies are 33% less likely to be invited for an interview than those whose launches have failed. Successful founders are often seen as less flexible and better suited for higher-level positions, which can limit their opportunities in the job market, Kriesman suggests.
Despite the bias, some former entrepreneurs, like John Chapman, former CEO and co-founder of Everfi, feel that their entrepreneurial backgrounds give them an advantage in pursuing executive roles. Some people are. Contrary to popular belief, his entrepreneurial background was not a barrier but a stepping stone to securing his leadership role, defying stereotypes.
