Hire Someone Like Me, or 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 U.S. economy. Such hiring decisions will be critical to the growth, and even survival, of such small firms. In this paper, we develop a model which suggests that an entrepreneur’s more central social or role identity influences how they choose to hire early-stage employees. Additionally, we suggest that the job complexity of new employment positions, and the munificence of the human resources in an environment further moderate the relationship between identity and the hiring decision.