If an employee’s first reaction to losing a job is one of distress, the second is recognizing the need for an action plan to get back to work. Typically that plan involves contacting friends, acquaintances, and associates who might assist in the hunt for a new job.

A new research project by Kellogg School faculty members reveals a critical nuance of this process: “We claim that job threat is leading people to use networks in different ways,” says Edward (Ned) Smith, an associate professor of management and organizations. Specifically, the project shows that individuals approach their support networks differently depending on their perceived socioeconomic status. Those who see themselves as belonging to a high socioeconomic level activate significantly broader networks when exposed to the threat of job loss, while those who regard themselves as low-status individuals remember their networks as being smaller and more dense than they are in reality. Accordingly, “If I’m a high-status person under a threat, I’ll be in a better position potentially to find the next job than a low-status person under threat,” says Leigh Thompson, a professor of management and organizations.

The difference does not reflect differently sized support networks. Rather, the project reveals, higher-status job seekers typically reach out to a wide range of contacts, including individuals they have met only occasionally in their working lives. Low-status people, by contrast, tend to share their situation with only their closest associates, such as family members and old friends.

“When people who perceive themselves as having high status face job loss, they remember the weak ties more than they otherwise would have,” Smith says. This is important because, as prior research has shown, weak network ties are important sources of job-related information. “Low-status people under the same threat have exactly the opposite response; they go to dense, strong ties,” Smith continues. He and Thompson carried out the study with former Kellogg School faculty member Tanya Menon, now at Ohio State University.

A Basic Conundrum
The project stemmed from a conundrum that had emerged in studies of job seekers. “The literature indicates that people searching for jobs find occasional ties most useful. Most people get jobs through weak ties,” Smith explains. “Contrast that with an intuitive feeling that when we’re under threat we tend to close in and confide only in people closest to us.” That raised two questions: “If we face the threat that we might lose our jobs, do we turn away from our weak ties?” Smith asks. “And does the decision have another component—for instance, is there a systematic difference in the way that different people respond to the threat of job loss?”

In their article, the researchers illustrate these points with two examples. A Detroit autoworker who lost his job “immersed himself in his web of close relationships,” strengthening links with his friends, parents, and pastor. By contrast, a Harvard Business School graduate laid off from his job as vice president of a high-technology firm “made three new contacts per day, starting with a colleague he had not spoken to in eight years.” In other words, the GM line worker narrowed down the list of people who might help him find work, while the HP vice president expanded his circle of contacts.

But why did the two take such different approaches? The team set out to determine how individuals at different social levels go about activating their social networks. They first differentiated among types of social networks: A potential network is the full set of contacts individuals have at their disposal. An activated network is a subset of the potential network that comes to mind in a given situation, such as job loss. And the mobilized network is a further subset from which individuals actually seek help. “Breaking these out was important to discover what lights up for people when they are under threat,” Thompson notes.

Two Sources of Data
First the researchers analyzed data about 806 individuals who were surveyed in 1985 by the General Social Survey (GSS), a national survey of American adults that contains information on such factors as social and professional status. The analysis indicated that individuals who regarded themselves as high-status reported having larger, more-variegated networks of individuals with whom they discussed important matters when they also felt that their job might be in jeopardy during the next year. Self-perceived lower-status people reported smaller, denser networks when under this threat, compared with unthreatened individuals of the same status.

However, this result can be interpreted in several ways. While job threat may indeed cause these different responses by high- and low-status job seekers, there is also the possibility of reverse causality: the chance that smaller social networks might lead people to believe that they face greater threat to their job security. The team also wondered whether individuals of different status had different emotional reactions to job threats.

To address those factors, the researchers set up an experimental study using 108 volunteer college students. First, they asked the students to assess their social status. Next, they randomly assigned the volunteers to imagine feeling either secure or highly insecure about keeping a dream job. Finally, they posed a series of questions about the volunteers’ responses to their assigned situations. The results ruled out both reverse causality and the role of different emotions as causes of the difference between high-status and low-status people’s use of their social networks. Individuals who identified themselves as lower status reduced the size of their networks when they faced the threat of job loss, naming fewer contacts than usual. In contrast, self-perceived high-status participants under threat expanded their networks; they increased the number of their contacts and reduced inherent redundancies in the networks.

Personal Impact
The team’s finding seems likely to have more impact at the personal level than on employment policy. “We don’t think these data can change unemployment on a large scale,” Thompson says. However, for lower-status individuals, simply perceiving themselves to be of a higher status could put them in the mindset to activate a larger network.

Bosses who have to lay off their employees should also bear these findings in mind. “They should understand that lower-status people may behave in a less optimal way and ask themselves: ‘How can managers work to counteract that?’” Smith advises. “When faced with the unfortunate task of having to lay someone off,“ he adds, “responsible managers may work to remind employees to utilize all the resources in their social networks to find subsequent employment.”

Artwork by Yevgenia Nayberg