An External Enabler Approach to Entrepreneurial Firms’ Employee Recruitment during COVID-19

Disruptive environmental changes can disrupt every aspect of economic and social life while also enabling entrepreneurial firms in surprising ways. We synthesize the external enabler framework with literature on human resources to study how the COVID-19 pandemic shaped entrepreneurial firms’ employee recruitment. We theorize how external enablers can have nuanced effects on the labor market, affecting factor market rivalry among firms as well as candidates’ openness to recruitment. We test our theory on over 200,000 recruiting interactions between entrepreneurial firms and top-talent candidates using a proprietary dataset from a prominent digital network platform. We find that during the pandemic, entrepreneurial firms’ overall recruitment activity declined significantly, while candidates’ responsiveness to firms increased. Recruiting firms were thus enabled to hire more entrepreneurial employees during the pandemic.