Do Organizational Rankings Affect My Ability to Change Jobs?

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One of the benefits of a free society is that its citizens are typically free agents in the labor market, and they are free to switch from one job to another. However, recent research suggests that our likelihood to switch jobs may partially depend on the ranking of our current organization, where one is presently employed, and the ranking of the outside recruiting organization, the one making the job offer.

In a data analysis of free agents in Major League Baseball, my colleagues and I (Garcia, Arora, Reese, & Shane, 2020) found that both the ranking of the home team and the ranking of the outside team influenced the placement of free agents in Major League Baseball, even when controlling for player performance statistics, salary, years in contract, and more.

Results showed that the higher the ranking of the home team, the more likely a free agent would end up on a team further down in rank. For example, a free agent from the #3 ranked baseball team has a higher probability of ending up on the #15 ranked team than ending up on the #4 ranked team. In other words, it is rare for a free agent to move from one highly ranked team to another highly ranked team. On the other hand, a free agent from an intermediately ranked team could end up on a highly ranked team, an intermediately ranked team, or a bottom ranked team — it doesn’t matter.

The researchers also conducted a follow-up experiment among participants knowledgeable about Major League Baseball who were asked to imagine being a team manager. They were additionally asked to what extent they would try to aggressively retain a free agent on their team who had an offer from an outside team. Results showed that participants would only aggressively retain a free agent when both the home team was highly ranked and the outside recruiting team was highly ranked. In all other cases — highly ranked home team and intermediately ranked outside team, intermediately ranked home team and intermediately ranked outside team, intermediately ranked home team and highly ranked outside team — participants were less willing to try to aggressively retain the free agent; they were more willing to let them move on to the outside team.

So what are the implications for you and me? Well, these findings suggest that when we have an outside offer, it may not always help to disclose that offer to our current employer. Only in cases when both our current employer is a highly ranked organization and the outside recruiting employer is also a highly ranked organization will it matter; in these cases, our current employer will probably offer a much larger counter-offer, including a big salary increase and other perks, just to get us to stay. If, on the other hand, the current employer and the recruiting employer are not highly ranked, then the current employer may just offer a tiny salary increase, if any, or maybe just offer you best wishes on your new position.

Because of these organizational ranking dynamics, it may then not always be a good idea to disclose an outside offer. Sure, having an outside offer is good to the extent it represents another opportunity for you — and shows that at least one outside organization wants you. However, you might want to consider the organizational rankings of your current employer and the recruiting employer. If you actually like your current employer, and want to stay with your current employer, you might increase the chances of disappointment when your current employer does nothing to retain you, or worse, suggests you actually take the outside offer.

Nevertheless, everyone has their own individual preferences for whether or not they would like to stay with the current employer versus move on to a new one. And many of us may not even care about organizational rankings at all, just feeling grateful to have a job. Even so, these new research findings suggest that organizational rankings can matter. Although we are all free agents, our destiny and placement in the labor market are sometimes tethered to the organizational rankings of our present employer and would-be recruiting employer.