Hire Someone Like Me, or Hire Someone I Need: Entrepreneur Identity and Early-Stage Hiring in Small Firms

Recent studies of entrepreneurial hiring have focused on teams of individuals brought together to form new firms. The literature is scarce on the hiring decision made by sole proprietors to obtain early-stage employees in existing growing firms, yet these firms are great in number and significantly impact the economy. Such hiring decisions will be critical to the growth, and even survival, of such small firms. This paper proposes a model suggesting that an entrepreneur's more central social or role identity influences the hiring decisions for early-stage employees. Utilizing social and role identity theories, this paper suggests how an entrepreneur's most central identity influences how early-stage hiring decisions are made in entrepreneurial small firms. Additionally, it is suggested that the job complexity of new employment positions, and the munificence of the human resources in an environment further moderate the relationship between the sole proprietor's entrepreneurial identity and the hiring decisions they make.