Are Founders Discriminated Against If They Look For Jobs?

It’s probably rare these days to find companies that don’t say how much they value things like innovation and creativity. Part of this desire for innovation has been a fundamental rethinking of failure, with many organizations openly stating how open they are to failure and that doing so emboldens employees to push the boundaries and try new things.

Of course, while salaried employees may indeed encapsulate those values, it’s probably fair to say that they don’t do so to the extent that entrepreneurs do. You might think, therefore, that companies would open their arms to entrepreneurs who fancied a stint in salary land, but research from Yale suggests that isn’t the case.

Valuing entrepreneurs

The researchers found that people who had run startups, even if they were successful stints, were actually called in for fewer job interviews than their peers with no startup experience. Indeed, the study found that successful entrepreneurs were seemingly even less attractive than unsuccessful ones.

While entrepreneurs are often encouraged to put everything into their venture, the high-risk nature of the endeavor means that having a plan B is probably quite sensible. The researchers tested just how attractive entrepreneurs were by applying to 2,400 entry-level jobs in software engineering across the U.S. Each application used a fictitious resume, with some representing a successful founder, others a failed founder, and the final batch people with no startup experience. There was a mixture of male and female applicants, but other than that, they were identical in terms of skills, education, and interests.

The results show that those with no startup experience received a request for an interview from 24% of their applications. This fell to just 13.6% for candidates with founder experience, which in turn varied from a staggering 10.9% for those with successful startup experience up to 16.2% for those from failed startups.

Unattractive

Given the entry-level nature of the jobs being applied for, the researchers pondered whether recruiters simply thought founders were overqualified for the role, so they sent out an extra 400 applications for mid-level jobs using fictional profiles of a successful startup founder and a non-founder (both of whom were male). Once again, however, the callback rate for founders was less than half that of the non-founder.

While entrepreneurs obviously have numerous qualities that are highly sought after in the modern employee, such as resilience and creativity, there is clearly something about them that is putting recruiters off, especially as successful entrepreneurs were rated worst of all in their eyes.

After interviewing 20 recruiters, the answer seemed to be in the fear that entrepreneurs would inevitably gravitate back towards entrepreneurship and leave after a short time. Indeed, the interviewees revealed various examples of entrepreneurs doing just that, and often taking some of the talented people they worked with at the company with them.

Not worth the risk

This fear was such that despite the recruiters openly admitting that entrepreneurs have many admirable qualities, the concern that they are simply too independent to be tied down to a single employer meant that they weren’t worth the risk. This was especially so when recruiters considered the culture of their organization, with pronounced fears that the founders would struggle to fit into a more traditional culture and structure.

The interviews revealed that recruiters are judged not only on who they can attract into roles but also on how long those people last in them. It’s not positive at all if successful candidates jump ship after a short time as the cost of replacing them is so high. As a result, recruiters are nervous that founders will inevitably get bored of corporate life and their itchy feet will drag them back into the startup world again. If they manage to take colleagues with them then the consequences can be even graver.

This is perhaps why unsuccessful founders were viewed more positively, as the failure of their business wasn’t found to reflect negatively on them as individuals, but the hope was that the failure would deter them from launching another business again any time soon.

Fitting in

All of which means that if entrepreneurs want to enter the salaried workforce after their startup it’s vital that they’re able to highlight and demonstrate how they will both fit in and stay committed to the organization. It can also be valuable to have some advocates on the inside who can stand in your corner, so networking can be a useful strategy.

There is a common fear that a failed startup will create a stigma around founders should they wish to re-enter the labor market again, but the results of this study suggest that isn’t really the case at all. Indeed, there are many positive attributes founders can emphasize from their experience that can stand them in good stead.

It is perhaps also worth firms themselves looking at this situation and contemplating how they might do a better job at capitalizing on the entrepreneurial skills of founders while also providing them with an environment and culture that satisfies their creative urges. If firms really do want to be innovative then this seems like a relatively straightforward thing that can be addressed.