When faced with job loss, people who consider themselves poor may limit employment prospects by believing they have a smaller social network than they actually do, a U-M business professor says.
“Social networks help explain people’s outcomes in the labor market by determining how people seek help,” says Ned Smith, assistant professor of strategy at the Stephen M. Ross School of Business. “Network contacts offer two primary resources for job search — information, which provides job seekers with knowledge about where to find employment, and influence, whereby network contacts affect people’s success in actually securing employment by swaying the hiring process.”
In a new study published in the journal Organization Science, Smith and colleagues Tanya Menon and Leigh Thompson of Northwestern University’s Kellogg School of Management found that that people who identify themselves with a lower socioeconomic status imagine having a smaller, less diverse social network.
Those who perceive themselves at a higher socioeconomic level act the opposite way, the researchers say. When seeking a new job, they call to mind, or “cognitively activate,” a larger, more diverse social network.
“People who perceive themselves to have low status may be further disadvantaging themselves following the threat of job loss,” Smith says. “That has real implications during a financial crisis when instances of job loss increase. If they’re also mentally cutting off the network ties that might be the most valuable to them, it adds fuel to the fire and creates a frustrating cycle. They feel threatened, reach deeper inside their network, limit their access to information on new opportunities, and feel further threatened.”
The researchers say the key to the study was determining perception — how people perceive their status, how they perceive their networks and how they perceive a threat. No matter how large or small a person’s social network may be in reality, how one perceives it determines how it’s utilized and, thus, its effectiveness.
Smith and his co-authors examined data from the General Social Survey, a national sample of nearly 1,400 American adults, to gather information on participants’ family backgrounds, attitudes, and past and present social and professional statuses.
The analysis revealed that people with a high-status perception experiencing a job threat reported larger and less redundant networks than similar-status people without a job threat. The opposite was true for people with a lower-status perception: The ones with a job threat reported having smaller and more dense social networks than the ones without a threat.
The research shows that anxiety from a job threat creates unique social network responses related to socioeconomic position, Smith and colleagues say. It illustrates the role cognitive function plays in how people activate their social network when it comes to a job search.
“The question now is why people behave in such different ways,” Smith says.
