Wednesday, April 20, 2005

More referrals network in recruitment news

Via Charlene Li at Forrester, news of a partnership between Simply Hired and LinkedIn.

LinkedIn as most will be aware is an online network & a related tool. Simply Hired is a job search engine similar to Indeed (I posted earlier views on Indeed and job search) Charlene describes the combined offering really well:
When you do a search, you can see if any of your contacts work at the company through a link to LinkedIn. So I could see that for a marketing job at E-Loan, I had 19 connections in my network, most of them at least three degrees away.

Many people, especially those who will potentially use online networks for job hunting will already be a member of something such as LinkedIn. Users don't want to join different networks for different functions. LinkedIn, because of its existing user base certainly has a head start therefore over some new entrants in the job-referral market.

As to how it and the new referrals networks are positioned, as I wrote before, referrals work not because you give people lots of money, but because they believe in your organisation and want to sell it. This is why having a referral bonus at $5000 encourages few extra referrals than having it at $500. Splitting the fee down the network will therefore encourage subsequent levels to sell it but do you really want your 'sales channel' to be an untrained mass focussing purely on the commission? My comments on developing channels for selling a job apply equally to the referral chain as they do to recruitment firms.

My original comment on those tools was that in the long-term stand-alone referral providers will be best suited to the mid-sized firms who want to automate a process and don't have a sophisticated recruitment system. If this type of networking does take off the big recruitment systems folks will just add it to their functionality and clients will use whoever makes it easiest for them to use a network - reposting isn't going to cut it. The Hire.coms, Brassrings, Taleos and Jobpartners control the clients eyeballs and should win the battle.

This new announcement though is different. Instead of building the referral out from the recruiter to the candidate it shows the network from the candidate to the recruiter. What does the corporate recruiter therefore need to do?

(1) Ensure that your key employment value proposition is understood by your whole workforce so they can act as reliable representatives
(2) Develop your referral process so that you can handle applications from people that your staff hardly know. (They didn't originally refer their friends anyway, it was always acquaintances)
(3) Ensure that your recruitment system can handle referrals just as any other source and that they don't bypass the process. Make sure it doesn't cause you an administrative nightmare.
(4) Understand that you now have a new stakeholder in your recruitment process (employees) and consider what that means for your communications.
(5) Join LinkedIn so you can be a key link.

Who should be most worried about these developments? My take is that it should be contingency recruiters who active candidates have previously used to make approaches for them. The candidates will start to take some of that ownership back.