How hiring top candidates can hurt team performance

and what to do about it

As a recruiter, hiring managers would always tell me to bring high-status candidates with star reviews from famous companies and a perceived ability to bring in new skills and knowledge to benefit a company.

But, according to one academic article, hiring high-status candidates can hurt your team’s morale and productivity if you’re not careful.

The role of “status” in the workplace

This observation comes from the article Starstruck: How Hiring High-Status Employees Affects Incumbents’ Performance by Matteo Pratto and Fabrizio Ferraro. The authors define “status” as the prestige accorded to actors because of the hierarchical positions they occupy in a social structure. High-status candidates often possess a superior job title, salary, education, work experience, reputation, and industry connections. These characteristics may include academic degrees from prestigious universities, a history of working at well-known companies, recognition from industry leaders, or an extensive professional network. Importantly, we tend to perceive high-status persons as more competent, even though their status is a function of their position, not the quality of their work.

How high-status employees drain resources

The authors state that the arrival of a high-status employee can create a “starstruck” or negative effect among existing employees. Companies generally have limited resources, and a high-status hire can gain privileged access to resources such as equipment, research assistance, attention and recognition. Additionally, high-status newcomers generally receive generous compensation when headhunted, not necessarily justified by their performance. This claim of limited resources by high-status hires can negatively impact the performance and motivation of other employees, who may become deprived of physical and emotional support.

Generating workplace anxiety

The starstruck effect can even impact motivated, strong-performing teams because, as human beings, we’re hardwired to try and advance our position in society and feel status anxiety when we’re not successful compared to our peers. By introducing a high-status person to the team, you risk creating status anxiety which leads to chronic stress and physical and mental health concerns, contributing to toxic workplaces.

I’ve seen the starstruck effect and status anxiety at a previous employer, where managers made a high-profile hire from a competitor. Behind the scenes, employees started to grumble. One colleague complained that we should have promoted someone from within, and hard work doesn’t seem to pay off at our company. Another colleague talked about how the new hire was getting paid more, even though the colleague and hire were both on the same level and the colleague had been with the company for a long time.

Five steps to help introduce a high-status employee

How do you mitigate the negative impact of high-status hires? Here are some personal recommendations:

1. Provide opportunities for professional development: This is obvious, yet many companies don’t provide growth opportunities to employees. Have an HR team that hires internally and includes learning and progression opportunities to help employees improve their skills and knowledge. These actions lead to stronger performing employees that feel valued and appreciated by the company.
2. Enforce a culture that values performance throughout the hiring process and onboarding: Does the new hire have the proven achievements and performance you look for or do they have a fancy job title and come from a famous company? Are they hitting their performance-related targets during probation? Set up a structured interview process to ensure the hire has job-specific skills and experience and track their performance during onboarding.
3. Communicate the value of existing employees: Have a hiring panel with different levels of seniority, thank the team for their efforts, and ensure your current team has the necessary resources moving forward. Ensure that your new hire’s salary, job title and status are not unfairly disproportionate to incumbents. These steps can help employees feel appreciated and recognized for their efforts.
4. Encourage teamwork: Have your team, and new employee spend valuable time, ideally informally and in-person, together during onboarding to build positive relationships. By prioritizing positive, on-site meetings with your team and new hire, you generate improved coordination of team activities, company culture and support between teammates.
5. Manage expectations: Hiring managers and HR teams can communicate how the new hire fits into the company’s goals and how their competencies (not status) contribute to the team and the company’s success. By communicating the hire’s strategic and skills-based value, teams can better accept a new hire into their group.