Don’t Fall Victim to the “ERP Killers”

Job Board Dependency

In a perfect world, hiring managers would never have to look further then their own employees for candidate referrals when new positions at their companies become available.  Every job opening would be filled by a friend of a friend, and only candidates that can be vouched for by a current employee on day one would be granted an interview.  You’d fill 100% of your positions with employee referrals and spend on average $3000 per hire vs. $8000 or more.  Your company would be one big happy family of people who all knew each other before they joined your firm.

If this was reality, though, services like Monster, CareerBuilder, CraigsList, and now, LinkedIn, likely wouldn’t exist.  Job/job seeker matching is a big problem, and the top recruiting marketplaces monetize this predicament in a big way:

CareerBuilder alone generated $160M in revenue in the second quarter of 2011.  LinkedIn generated $304 Million in 2012 and is projected to do over $1 Billion in 2013.  Billions of dollars being spent by companies to promote their jobs and mine databases of resumes to find candidates for their open positions.

“Recruiting Nirvana”


“Recruiting Nirvana”

“Recruiting Nivana” is the place where Talent Acquisition leaders can minimize their recruiting spend by generating candidates from their own employee base, bypassing the expensive (and noise inducing) job boards and focusing their talent intake on “warm referrals”.

In this wonderful world (which I envision looks something like Willy Wonka’s Chocolate Room), candidates arrive with references in hand from the referring employee.  Recruiting events become a lot more personal, as everyone showing up already knows one or more people at your company.  The hiring process is seamless:  hiring managers award job offers to friends and family of current employees, everyone works together in harmony and the wheel goes round and round  — one big, happy chocolate river of employee referrals.

The reality though is probably something more like the home Charlie Bucket shared with his two sets of grandparents — plenty left to be desired.

Recruiting Reality

Recruiting Reality

While some companies may generate in excess of 50% of their new hires from Employee Referrals, most firms find themselves contributing to the fat bottom lines of the job boards mentioned above, or worse, paying (gasp) third-party recruiter fees for candidates (full disclosure, I’m one of those guys!)

But have hope:  Recruiting Nirvana may not be that far from reality.

Employee Referral Programs can be optimized.  We live in an age where everybody is essentially one click away from everybody else, and your employees have built up rolodexes that sales reps in the 1970s would have killed for.  Social media has made this possible, giving individuals the ability to map out, and build upon, their own personal network of relationships in ways that, before services like Facebook, Twitter and LinkedIn existed, just weren’t possible.

Beyond just providing a rich ecosystem of personal relationships that reaches potentially infinite numbers depending on the size of your organization, social media makes it really easy to promote your jobs across highly trafficked channels for free.  This has become common-place – “sharing” jobs on your LinkedIn newsfeed, “tweeting” hot jobs to your company followers, “liking” a job posting on your company’s Facebook careers page.  “Social” Recruiting has major benefits, but the focus of our conversation here is proactive employee referrals, not just “sharing” of jobs.

And how is this possible, you say?

The trick is to not fall victim to the 3 big “EPR Killers”, which I’ve listed below, along with a remedy to deal with each one:

1.  Risk/reward ratio:  the time your employees will spend “thinking” about who might be a good fit for an open position, reaching out to that person, telling them about the job, getting a copy of their resume, sending it to HR/recruiting, and waiting for a hire to be made, likely won’t be justified by the cash reward offered for such efforts, primarily because the award is only granted on a performance basis (commission only, if you will).

Solution:  Award employees for their efforts/participation in your program, not just on successful placements.  Gift cards and public recognition go a long way.

2.  Employees are not recruiters:  In a professional sense, recruiting is a job, and your software engineers don’t feel they should be held accountable to do someone else’s job.  At the same time, every human being has the innate ability (some might say desire) to make connections, but when it becomes work, it’s a lot less fun.

Solution:  Make the referral process a game.  Challenge your employees to compete against each other to see who can refer the most candidates in a month’s time.

3.  Employees don’t know where to look for candidates.

Solution: Encourage your employees to actively build their LinkedIn professional networks, and spend more time interacting on the site.  Promoting jobs to contacts is a great way to stay relevant in your own personal circle, and make an impression without asking for something.  

Technology has made recruiting a whole lot easier then it used to be.  Provided you offer a strong company culture, competitive pay and the opportunity to work on interesting problems, you should have no trouble sourcing a large percentage of your candidates from your existing employees.

I encourage you to make an effort to reduce your dependency on job boards and agency recruiters (gasp) by more creatively leveraging employees to get involved in the recruiting game and not falling victim to the “ERP Killers”.  Your company will thrive from it and you’ll ultimately save yourself a lot of time doing things you hate, and have more time to do the things you love (like watching Willy Wonka and the Chocolate Factory streaming on Amazon from your desk.)

Posted in Employee Referral Programs

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