Research shows affiliation-based hiring can have benefits and pitfalls, depending on proximal and distal ties

Affiliation-based hiring tactics appear to help young firms access and retain higher-quality employees, leading to better performance—provided the connections are appropriate for the firm's needs. According to a study published in Strategic Management Journal, ventures perform better when they hire founders' proximal employment ties in the early stages; however, the effect is tempered when founders hire their former schoolmates.