Employee referrals: A study of ‘close ties’ and career benefits in China

This study examines the relationship between employee referrals and employees’ job tenure through the lens of social capital theory. It does so by considering the tie strength (closeness of guanxi) between referrers and referred employees in the Chinese context. In particular, we examine the mediating effect of career benefits. We theorize that close guanxi has a significant and positive impact on the job tenure of referred employees, and that career benefits (such as having a managerial role) mediate the close guanxi effect on job tenure. This highlights the critical need to recognize the tie strength as between referrers and referred employees. The support for our hypotheses comes from the use of personnel records of 4030 employees over 13 years in one large privately-owned manufacturer in China. Our study has theoretical and practical implications for the relational approach to tackling voluntary turnover in the workplace.