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Firms often struggle with managing employees whose actions and performance are difficult to monitor. We show that firms rely more on referral-based hiring to hire such employees, and that this in turn disadvantages women throughout the hiring process with respect to both job interview invitations and job offers. We show this occurs because women have weaker referral networks than men. Referral-based hiring disadvantages women by increasing the importance of having a large professional network. In addition, we exploit the exogenous and regional nature of the COVID-19 pandemic to corroborate that firms rely more on referral-based hiring when monitoring employee behavior is more difficult due to work from home arrangements. The latter suggests our findings are relevant for understanding hiring practices and associated gender inequality in the post-pandemic labor market in which remote work remains pervasive.

wlareina@ceibs.edu