Good people know good people. It sounds obvious, yet few recruiters have managed to make the dark art of referral recruiting into a science. We believe we have found that solution by marrying corporate social networks with employee referral programs to create a company referral network. The new concept is soon-to-be-unveiled in the new version of TalentVine. Stay tuned!
But in the meantime, we wanted to share some of the stats that have inspired us to focus on referrals as the magic formula that will bring concrete ROI to social recruiting initiatives:
- Deloitte estimates that an average company in the U.S. spends nearly 50 times more to acquire a $100,000 professional than it spends on training for that individual once employed. (SHRM- 2007 Performance and Talent Management Trend Survey)
- A referral candidate is 54 times more likely to result in a hire than a candidate coming from a job board. (Source: ERE 2006)
- Referred candidates outperform candidates hired through Internet job boards more than threefold in terms of retention and termination rates. “Employee referrals aren’t just a good source of quality hires, they are the No. 1 source of high-quality hires.” (Dr. John Sullivan)
- Employees hired through referral have a 25% higher retention rate. (Source: Workforce Management & Ohio University Study)
- Referrals bring in 25% of recruits at 50% savings per employee. (EY London: Financial Times – Social Networking Hits the Workplace, April 2007)
- A survey conducted by Hewitt Corporation showed that the most common source for highly-skilled candidates was employee referrals (96%), followed by the Internet (92%) and internal transfers (85%). (Hewitt 2002 survey)
- The CareerXroads Annual Sources of Hire Survey stated that employee referrals make up”arguably the No. 1 source” of external candidates who are hired. (CareerXroads 2009 Sources of Hire Survey)
With referral networks, we’re bound to see a more targeted process, which ultimately will link jobs openings to better and more reliable candidates. As the process becomes more streamlined, it should encourage more companies to ramp up their efforts and fully descend on the social recruiting fray.
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