Communicating Corporate Culture in Labor Markets: Evidence from Job Postings

A company’s culture represents one of the most important factors that job seekers consider. In this study, we examine how firms craft their job postings to convey their cultures and whether doing so helps attract employees. We utilize state-of-the art machine learning methods to develop a comprehensive dictionary of corporate values across the near-universe of job postings. Our descriptive analysis reveals that firms are more likely to advertise corporate culture in their postings when their culture is strong, as evidenced from strong external ratings and infrequent employment violations. In addition, culture information is more prevalent among job postings for positions in which the labor pool is tighter. Our main analyses demonstrate that culture information in job postings does attract job seekers, as it is associated with higher worker inflows. Culture information has a more pronounced effect on worker inflows following the Black Lives Matter movement, which increased the importance of culture to job seekers. In addition, job seekers respond more to culture information in job postings when alternative sources of information about firm culture are less readily available. Overall our findings suggest that job postings are an important mechanism for communicating cultural values to prospective employees and attracting talent.