Tightening labor markets present significant challenges for organizations seeking to attract potential applicants. Drawing on signaling theory and the signal incongruency hypothesis, this study theorizes about the individual as well as joint effects of communicating family ownership and AI use in recruiting on potential applicants’ perceptions of organizational trustworthiness and attractiveness. Through a 2x2 between-subjects vignette experiment with 289 participants, we find support for the expected positive effects of communicating family ownership and the expected negative effects of communicating AI use in recruiting on potential applicants’ perceptions of organizational trustworthiness. Interestingly, organizations communicating both suffer a higher loss in trustworthiness than those who disclose AI use in recruiting but not family ownership. Mediation analysis reveals that these differences in organizational trustworthiness transfer to indirect effects on organizational attractiveness. This study contributes to signaling theory by uncovering the effects of inconsistent signals from an organization as a single sender. It also extends family business research by identifying conflicting signals as boundary conditions for the association of family ownership and trustworthiness. It furthermore broadens the literature on AI in recruiting by demonstrating its negative impact on general organizational attitudes. These findings offer actionable insights for managing organizational signals in competitive labor markets.
