Employment growth is one of the most crucial indicators for economic policy. As the literature shows that only few fast-growing firms create the most new jobs, we apply recentered influence function regression to examine whether and how innovation activities shape the employment growth distribution. The analysis is based on firm data from Eastern European countries. Recentered influence function regression is applied to examine the effects of process and product innovations on the employment growth distribution. The effects of process innovation on job creation are ambiguous. However, an increase in firms with products and services that are new to the market shape the upper tail of the employment growth distribution. Product and service innovations thus cause skewness of the employment growth distribution and are a major determinant of job creation.