Sang Won Han, an Assistant Professor of Sociology at Sungkyunkwan University and co-first author of the study, has collaborated with Shinjae Won, an Associate Professor of Management and Strategy at Ewha Womans University, to publish new research in the Strategic Management Journal, one of the leading publications in the field of management. Their paper, titled “Hiring at the Tip of the Funnel: Externalising the Work of Integrating and Coordinating Diverse Human Capital,” presents a fresh perspective on how organisations can address one of the most persistent challenges in talent recruitment.

When firms recruit externally, they encounter a fundamental trade-off. On one hand, hiring from diverse sources brings in valuable knowledge, skills, and perspectives that can drive innovation. On the other hand, such diversity can increase the complexity and cost of integrating employees with different backgrounds, experiences, and ways of working. Traditional approaches tend to frame this as a choice between diversity and efficiency, often forcing firms to prioritise one at the expense of the other.

This study moves beyond that conventional framing by examining talent mobility through the lens of inter-firm networks. Rather than focusing solely on individual hiring decisions, the research highlights how firms are embedded within broader systems of employee movement across organisations. It argues that a company’s performance is shaped not just by whom it hires directly, but by its position within this wider network of talent flows.

Central to the study is the concept of the “Tip of the Funnel.” This strategy involves firms concentrating their recruitment efforts on a small number of carefully selected organisations that themselves attract talent from a wide range of sources. By doing so, firms can gain indirect access to diverse knowledge and capabilities without bearing the full internal costs of integrating highly varied employees. In essence, the integration work is partially externalised to upstream firms within the network.

Empirical evidence supports the effectiveness of this approach. The study highlights the example of Nvidia in 2016, which focused its hiring on a limited set of firms such as Cisco and Intel—organisations that themselves recruited broadly. By positioning itself at the downstream end of this “funnel,” Nvidia was able to benefit from diverse human capital while maintaining organisational coherence. This network positioning was associated with strong innovation performance, suggesting that such strategies can significantly enhance firm outcomes.

The research also finds that the advantages of this approach are particularly pronounced in organisations with cohesive cultures, where shared values and norms facilitate the integration of new employees. Overall, the study reframes talent acquisition as a question of strategic positioning within talent mobility networks. As Professor Han explains, firms can improve performance by selectively hiring from organisations that have already integrated diverse talent, turning network structure into a source of competitive advantage while balancing innovation with organisational efficiency.

More information: Sang Won Han et al, Hiring at the tip of the funnel: Externalizing the work of integrating and coordinating diverse human capital, Strategic Management Journal. DOI: 10.1002/smj.70076

Journal information: Strategic Management Journal Provided by Sungkyunkwan University External Affairs Division