Screened Out: Recruiter Evaluations of Job Applicants with Prior Entrepreneurial Experience

A great deal of research on entrepreneurial exit focuses on the potential challenges that entrepreneurs may face when launching a new venture, but very little is known about those who choose to reenter the traditional workforce. It is commonly assumed that an entrepreneur can always “go back to work,” however, it is unclear whether entrepreneurial experience will help or hurt them on the job market. We attempt to answer this question by investigating how recruiters evaluate former entrepreneurs early in the selection process. Drawing on screening theory and attribution theory, we argue that, contrary to popular belief, former entrepreneurs are evaluated more negatively than their counterparts with traditional work experience. Additionally, we theorize that former entrepreneurs who close their business will face considerable difficulty reentering the traditional workforce compared to former entrepreneurs who sell their business. Results of two studies reveal that professional recruiters tend to screen out former entrepreneurs – both those who close and those who sell their ventures – from interview consideration in favor of applicants with traditional work experience. Our qualitative findings provide further support and insight into the attributions that recruiters make when considering former entrepreneurs as potential employees.