By Anne Berkowitch, CEO, SelectMinds
Everyone can agree that referral candidates are the best kind. They are more likely to result in hires, they have higher retention rates, and they generally outperform candidates hired from job boards. In theory, this return on investment is a result of the power of the relationships that drive referrals themselves. As this ROI becomes increasingly quantifiable and validated, I expect we’ll see referrals leveraged in the procurement of other goods and services.
If referral recruiting is the tip of what may prove to be a “Social Sourcing” iceberg, some may ask, why is that the case? HR managers, executives, and professionals aren’t generally the technology decision-makers in their organizations, nor are they typically making company-wide sourcing decisions. It goes back, once again, to relationships. HR is one department that long has relied on personal connections, understanding individuals’ unique situations, careers, goals, and more. As such, it’s understandable that new ways to leverage existing connections using technology would first break into the enterprise through the HR department. The broader the employee network, the bigger the pool is for potential talent referrals and hires. Where other departments initially might view leveraging and integrating employee social networks into sourcing efforts as a distraction, for HR, it’s a value add.
As some HR departments begin building their referral machine, it’s critical to ensure the final approach is targeted and relevant to the employee base. Rather than implementing new technology in hopes that it will create a community and encourage employee interaction and recommendations, HR should identify the solutions that will help track success and the level of activity to ensure effectiveness. Referral recruiting also re-emphasizes the importance of metrics and analytics, especially when it comes to their people. In terms of referrals, data can help HR identify and leverage the best referrers so recruitment can be more targeted. Deploying analytics also can narrow a business’ focus on specific relationships its employees may have, not just blanketing their more superficial connections but rather, driving real value from high-worth relationships.
When businesses rightly begin to approach their employees and their relationships as a social procurement platform, the sky is the limit for developing new vendor relationships, developing business leads, and more. For example, creating a referral system and tapping into existing and trusted relationships can result in uncovering a new vendor relationship. In this new age where every advertisement, online suggestion and sales pitch can be customized automatically to the individual, businesses that adopt ways of establishing, managing, and maximizing those direct, unique relationships naturally will find greater success. One way of doing this, which is what referral technologies can deliver, is to allow employees to manage those relationships and expectations themselves within a branded, private solution irrespective of what department their actual job is in. The pride of ownership and potential reward for a referral is something HR can encourage and remind employees of as a successful referral program takes shape.
The technologies available today actually may change where the HR department falls within an organization. Whether it’s a standalone, fully equipped product or a login to a social network, today’s technologies provide greater potential to quickly make new connections and develop valuable relationships. The access to and development of these relationships can enable HR to become a strategic leader within procurement in the near future. This transition and socializing of business processes, in fact, could enhance and elevate the role of HR into one in which HR professionals find themselves educating their colleagues on best practices for social sourcing.
Many may agree that this evolution in sourcing and procurement is coming thanks to the other changes we’ve seen as a result of the Web and specifically the social Web. Software-as-a-Service (SaaS) technologies that help organizations harvest and derive value from the social ability of their employees will see an increase in demand as the ROI from referral recruiting is measured, accepted, and desired across business departments.
As the co-founder and CEO, Anne Berkowitch leads the SelectMindsBoard of Directors and management team. Since starting the company in 2000, Berkowitch has played the central role in transforming the company from a business based on corporate social networking to one focused on providing robust networking and referral technologies that help organizations source talent, drive business growth, and evangelize the company’s brand. Under her leadership, SelectMinds most recently introduced its talent acquisition solution, TalentVine, which integrate users’ existing social connections to source talent and accelerate employee referrals. Follow SelectMinds on Twitter at @SelectMinds.