A leading recruitment commentator said that 2010 was going to be the year of the referrer, so we recently conducted a round up of the various research available in the market place with regard to referrals schemes, networking and the impact that this is making on the recruitment market:

1. 88% of employers rated referrals above all other sources for generated quality of new hires

2. 78% of companies are now using social networking and social media to find and attract candidates.

3. 50% of companies were spending more on business networking sites such as LinkedIn, Facebook, and employee-referral programs and less on print and traditional job boards.

4. 50% plus of companies surveyed by the CIPD admitted that so far they had not utilised an employee referral scheme at all.

Clearly the figures suggest that whilst employers who are utilising referral schemes are seeing an increasing percentage of hires initiated through their employees’ social networks, there is still a long way to go if more than 50% of employers surveyed have not utilised a referral scheme at all.

If your company already has an employee referral program, or is at the initial stages of putting this in place its worth looking at how and why they can work so well and also, how expanding them into open referral networks through sites like mypeoplebiz.com can take your recruitment to the next level with significant savings and a great calibre candidate otherwise difficult to find.

Traditionally employee referral programs act as internal recruitment method, encouraging staff to source new hires for your organisation from their social and professional networks through a monetary incentive. This allows for an efficient recruitment process reducing cost and time to hire thanks to improved relevance of referred candidates and the trustworthy relationship between the referrer, candidate and the organisation itself.

· A recent study showed that 88% of employers rated referrals above all other sources for generated quality of new hires

Referrals generate a higher quality candidate as they are likely know the job and candidate far better and are not prepared to waste their or their contacts time on something they don’t think is right. This cuts down recruitment time for you as candidates have essentially already been well sourced and screened for you. Furthermore, referrals build on themselves, not only are you likely to be building a better talent pool, hired referrals are likely to encourage further referrals and are more likely to refer new talent themselves, expanding your ‘talent network’.

By setting worthy rewards for successful hires you’re also creating ‘brand campaigners’ for your company as they promote your organisation to the friends and contacts in their networks. What’s more, 78% of your staff are spending up to half an hour of the working day on social networking sites, creating a even larger range of connections to source candidates from, capitalise on this rather than thinking of it as wasted time.

The impact Personal recommendations via current employees’ social networks can be very valuable in other ways too, as they can efficiently lead to candidates with the right cultural ‘fit’ for a company in addition to saving employers considerable amounts of money, reducing the amount spent on agencies and external advertising.

Why create an open your referral system? Internal referral schemes can work fantastically, but why stop there; all your competitor’s employees also know great people in the industry, and are just as willing to participate in the action. People are more connected than ever before with new technologies, and since 78% of staff are spending up to half an hour of the working day on social networking sites too, recommending a contact for a job is easy – just a simple message is required, and then they can chose to take it forward. Put simply, If your company rewards and encourages this behaviour, your company is going to be rewarded with better talent from the people who know what is needed.

CIPD surveys indicate that 64% of respondents agreed that referral reward incentives for staff have a positive impact – not just on the caliber of job applicants, but on the budget too. A large insurance company which participated in the study’s focus group reported a huge saving of £250,000 in recruitment costs as a result of their ‘refer a friend’ scheme.

Clearly, such schemes can be highly successful.

Once received, the process of filtering begins. This process alone will require hours of painstaking sifting (particularly with-out an ATS), and since whoever does the sifting will need to be fully conversant with every nuance of the position, and consequently, is likely to be highly paid, then by process of elimination arrive at a number of applicants to interview. Now this is the point – during this process of elimination you are in grave danger of missing the most suitable candidates. Why? Because you are basing your selection on a huge assumption. The assumption that a candidates’ CV is in any way representative of their suitability for the job.

Of course we need parameters, a form of measurement, somewhere to start the process. A well written CV can provide some useful information.

Most importantly it can register the applicant’s level of education and professional qualifications. Often it may provide some interesting points about the candidate’s interests and hobbies, and in most cases will offer an historical account of the candidate’s career path thus far. But, the way each recruiter (be they a member of the human resources team, a line manager or the company MD) views this account is purely subjective. A ‘good’ CV in one persons eyes will be completely discarded by another.

Can you really afford such a hit and miss approach to form the basis of policy for sourcing your most valuable assets?

A good recruitment agent understands this. He or she will have made it a priority to firstly completely familiarise themselves with the details of the position concerned, fully taking into account such details as; the culture of the company, the number and mix of the work force, the geographical location, the expectations of the employer, the retention and rewards policy etc. etc. They will also have an open mind concerning the attributes of the ideal candidate, making the number one priority finding the right person for the job.

Some candidates can write a very appealing Curriculum Vitaé (that is, appealing to some) and some are just not able to represent their clear suitability for a particular job by way of 2 -3 sheets of printed A4. So how do you decide? You let the recruitment agent do their job. Ask yourself, would there be around 20,000 employment agencies in greater London alone if they weren’t doing a reasonable job?

Over the years, I have built a level of trust with many clients, to the point that, if I recommend a candidate for a particular job, that candidate will be granted an interview regardless of what it says on their CV. This is how they arrive at a short list. They allow me to do what I’m paid for. Of course, the final decision is theirs and I will endeavour to ensure that they have a real choice. Not the choice between someone suitable and someone who isn’t but between two or three who are entirely suitable. The rest is down to what I call ‘chemistry’, something that as yet, we haven’t found a way to regulate.

Written by mypeoplebiz user David Bloomfield, senior consultant at Bloomfield consultants, a recruitment agency specializing in financial, legal and sales recruits highlights the benefits of using the agency channel in a recruitment strategy.

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