Renaissance in Recruiting: Measurable Network Recruiting at Scale.

I love recruiting and that’s fortunate. It’s been my work passion for over 24 years spanning interim staffing (WWCS), retained executive search (IdealWave), corporate leadership search (Google), consulting (DataXu) and now a blended prof. services + MSP platform solution (Hub Recruiting + ReferScience).

I’ve often wanted to write this specific blog because for the past 23 years, I’ve privately wondered why so many companies pay so much money to so many recruiting firms for each individual hire. The contingency recruiting business model has been a cornerstone approach for approximately 65 years (emerged after WWII), and the retained business model recently celebrated its’ 50th anniversary in 2009. Both are centered around the fundamental assumption that the best network of candidates (and the ability to qualify them) resides inside the recruiting firm rather than the hiring company or the labor pool. And that was probably true until recently.

It is not simply the internet that is changing recruiting. LinkedIn is certainly the seismic disturbance causing a tsunami in recruiting, but there is another quieter element that is really the root cause of such a historic change.  And this is the ease and immediacy of the information-sharing culture.  Almost 50% of US workers said that they learned about their job through a network of friends. The impact on quality of hire (QoH) is significant in this information-sharing culture: referrals, through a network of friends, make better hires.

The 65 year era from 1950 to present day was a period of industry focus on fee-per-hire recruiting.  We are now beginning the era of network recruiting driven by the ease of sharing, ease of accessibility, open-social networks and measurable strength-of-tie.

Almost 50% of US workers learned about their job through a network of friends.  

This is significant because:
  • Referred candidates are more likely to be hired.

  • Referred candidates are more likely to accept an offer for employment.

  • Referred workers have lower turnover.

  • Referred workers earn higher wages than non-referred workers in the high tech industry - and produce higher profits per worker.

  • Employees are less likely to quit after they’ve made a referral.

  • Referred employees are substantially less likely to quit than non-referred employees.

It is very early days, of course, and there is much work to be done. Many efforts will fail because they place the need of the company above those of the employees and candidates. Some will succeed and they will simultaneously reduce time-to-hire and cost-per-hire, improve quality-of-hire and gather relevant data.  So network recruiting at scale is here and it’s the catalyst for a renaissance in recruiting.