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  1. 1. WHITEPAPER INSOURCING THROUGH SOCIAL REFERRALS THE NEW WAY OF HIRING ABSTRACT It is easy to see why Employee Referral Management Programs (ERMP) are present in most organizations. The most common way of incentivizing employees was to offer cash rewards for hired candidates introduced by employees. While most companies have an ERMP, primarily attracted by this methodology, but most have reported problems with long term adoption of the program. This paper will identify the barriers to widespread adoption and what can be done to improvise on the ERMP. Research shows getting a referral are a cheaper and faster way to hire, yield better results and lower the turnover rate at your company. ABSTRACT It is easy to see why Employee Referral Management Programs (ERMP) are present in most organizations. The most common way of incentivizing employees was to offer cash rewards for hired candidates introduced by employees. While most companies have an ERMP, primarily attracted by this methodology, but most have reported problems with long term adoption of the program. This paper will identify the barriers to widespread adoption and what can be done to improvise on the ERMP. Research shows getting a referral are a cheaper and faster way to hire, yield better results and lower the turnover rate at your company. ABSTRACT It is easy to see why Employee Referral Management Programs (ERMP) are present in most organizations. The most common way of incentivizing employees was to offer cash rewards for hired candidates introduced by employees. While most companies have an ERMP, primarily attracted by this methodology, but most have reported problems with long term adoption of the program. This paper will identify the barriers to widespread adoption and what can be done to improvise on the ERMP. Research shows getting a referral are a cheaper and faster way to hire, yield better results and lower the turnover rate at your company. ATUL CHATUR & NIMIT BAVISHI
  2. 2. Happy2Refer 2 TRADITIONAL REFERRAL SYSTEM Defining a referral in the old world is simple; a referral was a recommendation, and people only referred the people they knew well and had probably worked with. This was driven by memory, contact diaries and personal relationships. Volumes of referred candidates were low, but conversions were high because employees matched on skill, experience and knowledge, and were recommended as a fit in all these areas. Most of the common employee referral management programs involve making open jobs visible to employees and asking them for recommendations from their network. The process requires the employees to provide potential candidate details, usually a resume or LinkedIn profile, and to have gained permission from the candidate to submit. Successful hires are rewarded with cash payments, commonly after the completion of the probationary period. As payments are involved, there is a due diligence process to qualify for payment. There are various pros to the referral program including getting access to high quality candidates with a good fit, Employee Endorsed skill level and employability, Employees being accountable for candidate fit, Low cost of referral hires (even after bonuses), Low conversion ratio of applied to interviewed and interviewed to hired, Speed of hire and Opportunity to reward employees. Some of the cons of this process include generating a low volume of referral candidates, Administration heavy systems, long amount of time taken to complete most referral programs, due diligence of referral rewards and most importantly asking employees to have the matching skills of recruiters. The benefits to referral recruiting are undisputed, with the pros easily outweighing the cons. However, the low volumes of referrals means that even the most successful programs result in no more than 25% of all hires. It is easy to see why companies place ERMPs at the center of their recruiting efforts, and that recommendations from employees provide the most valuable source of hire. The challenge most companies face is finding new ways to increase the volume of referred candidates, maintain the quality of referrals and sustain the flow of referrals on an on-going basis. CHALLENGES WITH TRADITIONAL REFERRAL SYSTEMS The best referral you are going to get is probably when the referred candidate is known by the employee and they have worked together in the past. There is normally a big emphasis on asking new hires for referrals. The reason given for this is that new employees are most forthcoming with names, and usually of former colleagues. The new employees are also keen to impress, and motivated by their new employer. Logic also follows that as this candidate was successful, they know and refer former colleagues that will likely have a similar skill set and experience. 1. Uncomfortable approaching friends about Jobs Employees often feel uncomfortable approaching their friends about jobs with their employer. They also feel that it is inappropriate to talk about and discuss jobs with their friends, given the confidential nature of careers. 2. Accountability When an employee makes a recommendation, they take a risk on their personal reputation. If the referred candidate is hired, there is the additional risk that the candidate will not perform, and will always be known MOST COMMON BARRIERS AND ISSUES Uncomfortable approaching friends for Jobs Accountability Transparency Not their Job Manager Buy-In Time-consuming Forgetting the ERMP
  3. 3. Happy2Refer 3 as their ’recommendation’, particularly given any rewards they may have been paid. 3. Transparency Where rewards for referred hires are high, there is a high level of due diligence. Examples for not paying the expected rewards are that the candidate was already known to the company and in the Applicant Tracking System (ATS), the paperwork was incorrectly completed or the employee did not upload a resume. Especially when there are cash rewards involved, there are plenty of reasons for saying no to a claim. The sense of injustice proves to be a real killer for many referral programs. The rules need to be transparent and designed to reward rather than penalize. When the system is seen as fair and reasonable, employees are far more willing to take part. This, lack of transparency is one of the most common reasons for failure of old world referral systems. 4. Not their Job Whilst an Engineer might know plenty of Engineers, their main job is working the machines, not recruiting. The more the Engineers are asked to be recruiters and exercise judgment over which candidates to submit, the less confident they are in taking part in the process. The ‘not my job’ attitude can lead to little buy in, so why refer? It could also be a result of employees lacking confidence in making judgment calls, linked to accountability. 5. Manager Buy-In Managers need to see the ERMP as being important to their team, and the most effective way they recruit. The communication of the ERMP internally often focuses on the benefit to the company and often misses out on the benefits to the individual employees of working with the best people they can, and the part they can play in it. When time and resources are invested in getting Manager buy-in, they are far more willing to include conversations about referrals in team meetings. Where referral figures are included in performance reviews, then the ERMP is kept front and center. 6. Time-consuming Tied in with rewards are processes, and procedure can be time consuming when due diligence is a driving factor. The process behind the ERMP needs to be simple and quick, enabling employees to contribute without interfering with the time available to do their real job. The more time involved in searching, matching, communicating with potential candidates, recruiters and admin, employees will be less likely to continue taking part. A successful ERMP needs to be admin light and built with the employee in mind. 7. Forgetting the ERMP Most ERMPs launch with great intentions but after a few months, employee enthusiasm and participation wanes. This need not be the case with careful planning. When structuring an ERMP strategy, you need to think how you are going to promote the program and keep it prominent in the thoughts of employees.
  4. 4. Happy2Refer 4 THE SOCIAL PHENOMENON – INSOURCING VS OUTSOURCING Over the last few years, social networks have experienced exponential growth. Employee networks have grown accordingly, offering access to structured career data through sites like LinkedIn in particular, and unstructured data through networks like Facebook. Employees are continually updating, adding new contacts and growing personal networks. The more sophisticated Job Posting tools create unique links for sharing that enable employers to identify which of their employees originated the share. This is useful for recognition and reward, whilst the practice of sharing jobs in the wider network is to be encouraged in order to reach job seekers who are browsing or using search engines to identify opportunities. Job seekers are increasingly connecting with their peers in organizations they want to work for. Encouraging employees to share jobs into their networks offers the potential to reach these connections, but it is only a chance. A direct message is always going to prove to be more effective. A referral is best defined as a personal recommendation from one person to another. The difference, though, between an old school referral and a social referral is the potential depth of the relationship. All networks consist of an inner and outer circle(s). The inner circle includes connections where an offline relationship existed based on work interactions and personal knowledge. The outer circle(s) consists of those connections that have connected online through a shared interest, mutual connections or similar. This offers access to data for mining and matching and reaches for personal messaging via an established connection. When you consider the potential reach offered by the combined population of all of your employees who are willing to sign in to a Social Referral Program, it’s easy to recognize the potential of operating your ERMP around social connections rather than personal address books, as in the old world referral. The key here is to enable employees to weight the referrals they make, giving priority to those in their inner circle whilst leaving the way open to search all connections however distant for a skills and experience match. The use of data mining technology enables recruiters to identify potential candidates based on skills and experience of any employee who permits access by signing up for the ERMP. It is time companies think about and act on the outsourcing vs insourcing of recruitment through social networks. In the past, most recruitment activities have been outsourced to recruitment consultants, job boards, agencies, headhunters, with the least possible emphasis being put on the most valuable resource that any company has – its employees. The latent network that employees now represent, gives the company a chance to tap into the network for recruitment purposes – both active and passive recruitment. THE INSOURCING NETWORK
  5. 5. Happy2Refer 5 THE DRIVING FORCE BEHIND SUCCESSFUL ERMPs The most common factor of a successful Employee Referral Management Program is a team of inter- departmental champions that are outside of the recruiting/ HR team. The ERMP team should be the ones who drive the program, design rewards and build a community of referrers inside and outside of the organization. The champions should be given the freedom to design the framework to get the most out of the ERMP. Most companies designing a new scheme assume that offering cash is the main driver. More often than not, the complications associated with cash, from due diligence to taxation to distributing cash outside an organization, hinders wide scale adoption. It is better to let the employees determine their own rewards or even have shopping cart functionality where they can shop for rewards based on points awarded through the program. These can be cumulative or instant. Small rewards and team rewards often go much further than occasional cash payments. The other consideration in this is what to reward. Whilst most ERMPs reward hires only, is this actually what you want to be rewarding when there is only a 1:12 (or lower) chance of success through referrals? The more successful ERMPs in such cases reward referrals rather than hires. This can be small recognitions or awards, or gamification, typically by rewarding each referral with say a lottery ticket for a big prize such as a motorbike. Getting rewards right for your employees is important and you should never underestimate the power of reinforcing the desire among existing/ current employees to get the best employees into the company for everyone’s benefit. It is also critically important that employees can opt-in and opt-out as they see fit. The technology aided social referral, with the addition of a ranking feature based on relationship (inner/outer circle), retains the benefits of the traditional referral whilst adding targeted reach. DEVELOPMENT OF SOCIAL REFERRAL AND MOBILITY The explosion in the use of smartphones and tablets has changed the way people do things. People message and respond in down time between work and personal commitments, and they expect to be able to interact instantly. The pervasive use of Mobile Phones (Smartphones) and Tablets in everyday usage is referred to as Mobility. In the past, being on a PC was necessary for online job search and email messaging. This mostly meant messaging or sending out notifications and waiting a minimum of 24 hours for some kind of response on most recruitment activities. People use down times like when they are commuting, on breaks and whilst watching TV in the evening to check in with messages, updates and emails – all this has been enabled by Mobility. They are on the move and want to be able to access content easily, viewable on a mobile device. They don't want to need to navigate from page to page, and they want to be able to respond instantly. Responding by mobile device means that candidates are unable to provide extensive information, needing a one or two click expression of interest. The key drivers to success of a Social ERMP: Easy and convenient participation Simple, intuitive process Non-recruiter champions On-going communications and visibility Recognition of contribution Transparent rewards program Automated matching Relationship weighting Candidate experience Feedback to referrer
  6. 6. Happy2Refer 6 This is ideal via social referral where the original profile can be tagged against the unique URL applied to the job. When the target clicks their interest, the aggregated profiles used to match (such as a LinkedIn profile) can be imported from the user profile. Receiving the message on a device in your pocket will incur response times and conversions. Even social media giant Facebook consider themselves to be a mobile, rather than a social company, and any ERMP technology not built for mobile can be difficult and cumbersome to use and hence considered dated. Mobile referral technology, mobile landing pages, and push notifications to trigger referral messaging are all key for ensuring an effective mobile presence. MOBILE REFERRALS
  7. 7. Happy2Refer 7 GAMIFICATION OF RECRUITMENTS When we speak or think of gamification, we often imagine Angry Birds and other online games and game platforms. Gamification, however, can be widely used into a number of business practices. Awarding points for referral inputs and outcomes encourage competition between employees and teams. Online badges recognize contributions from all employees, and can be tied in to social status and performance review. The greater the recognition from management, the more employees aim to achieve the standard. Competition is a big driver among colleagues and teams. Awarding points for activity and outcomes means employees can accumulate reward points to cash in against a series of rewards. Adding fun elements to rewards like spot competitions, bonus points for in demand roles, and adding games like click the lucky button or spin the wheel to win extra points or prizes keeps the attention on the ERMP in a fun way. Plugging into competition, fun and recognizing referral champions results in a community feel to the ERMP, particularly when combined with other employer/culture branding efforts. THE ERMP AND ORGANIZATION CULTURE BRANDING We tend to automatically think of Referrals as enlisting the help of employees to share jobs with members of their network who have the skills to fit the opportunity. Companies are paying more attention to culture branding, using social media to provide a window into their organizations in order to enable potential candidates to opt-in to connect and follow the company and opt out if there is no fit. Personal referrals of content are far more likely to be seen and opened, increasing appeal and culture brand awareness amongst a network of people who rank highly on the employability scale. Employability is based on skills, experience, culture fit, location and other factors. Content connects people with organizations, and referred content makes sure that these are the right people to fill future requirements. Potential candidates are increasingly looking for more information on the real values and culture of the company. This marks the shift from transactional recruiting on a job by job basis, to relationship based recruiting, with potential candidates wanting to get to know an organization before applying. With so much noise in the social media content in the social channels, it is easy to lose content and is hard to pinpoint target audience. Innovative thinking about ERMPs uses the same data mining, matching and referral technology to refer content on a one to one basis to targeted connections. EVOLUTION OF THE TALENT NETWORK THROUGH REFERRALS Recruiting, mostly, has been transaction oriented in the past. Jobs got posted on static websites, job boards and printed media. Applicants applied online and went to an applicant tracking system (ATS), provided information about their backgrounds, answered routine questions and uploaded a CV. One or more of the applicants bagged the job and the most got rejected. Records were retained for legal reasons, but mostly remained untouched, and each time there was a new job there was a re-run of all these activities. Recruiting and applying for a job was win or lose, pass or fail. The problem with this methodology is that each time there was a whole new campaign, and those people who did not bag the job were split into two categories: Those who were a good fit with the company culture and had appropriate skills, but were beaten by a better applicant on the day. Those who were a poor culture fit, or unqualified/ inexperienced for the skill set of the roles that the company offered. The growth of employer branding content created two new groups. Those who were interested in the company as a possible employer in the future, but were not yet ready to apply.
  8. 8. Happy2Refer 8 Those who were attracted to the company but did not fit or have an interest in open vacancies. Potential candidates who fit into the last two groups mentioned above formed the best collection of people to source from. They had all shown some form of interest in the company and could be tempted to apply again when the timing was right. This marked the development of the talent network. The talent network organizes connected people according to their profile, skills, experience and location in order to send them relevant updates about jobs, culture, branding and content in the channel of their choice. From the candidates point of view this keeps them up to date with relevant information and job opportunities, and the company gets to keep their talent pipeline alive in advance of requirements. The evolution of the talent network brings a new dimension to the ERMP. Employees can employ the same technology and methodology to populate the network by creating profiles for the types of people that would fit with possible future requirements and asking employees to send out invites to join the talent network to their social connections, based on data mining. The talent network can be populated by adding a one click sign up to all content and jobs. Joining the network needs to be simple, with data coming from social profiles such as LinkedIn to keep messaging relevant. This results in every update from the ERMP presenting an opportunity to connect with potential future employees and to start engaging. The more relevant content and jobs go to the right targeted audience, improving the culture and employer brand awareness. It is possible that as the company talent network grows, there will be a tipping point where there will be no need to search outside of this network, and every ’member’ will have a level of relationship with the company. Referrals present a great opportunity to build the talent network to this level. REVERSE REFERRALS Even though your employees have social networks that are full of potential employees, the reverse also applies. Individuals who interested in your company as a potential employer are connected with your employees. As a potential candidate, getting referred has real benefits over applying through traditional methods. Referred candidates are prioritized for review and feedback Referred candidates avoid the ATS at point of entry Referred candidates come with a degree of recommendation according to the level of relationship Adding a ’Get Referred’ button to jobs, career sites, content and social places enable interested parties to see how they are connected with the company in order to request a referral. This has real benefits to populating the ERMP because the interaction is driven by requiring minimal input and time from the candidates and employees. INTERNAL REFERRALS When we talk about referrals, we are usually thinking about external candidates, but the modern ERMP has a big part to play in internal mobility. Internal mobility goes hand in hand with retention and employer branding. The opportunity for advancement is one the biggest motivators in joining a new employer. Sideways moves within an organization are also often dependent on noticing an opportunity on the intranet or notice board. Direct approaches by recruiters within the organization are quite rare, meaning internal moves and promotions are usually driven by the company. Internal referrals, where employees can refer jobs to colleagues and refer them to hiring managers with a recommendation opens up internal mobility and have a big impact on the quality of hires.
  9. 9. Happy2Refer 9 EXTERNAL REFERRALS It is easy to think of the ERMP being the domain of employees current and past, but given the right marketing and positioning, anyone with an interest in the business should be able to join and benefit. People want to help friends and contacts, and if a job is not of interest to them, why wouldn't they let a friend or contact know if it has been made easy. External referral networks benefit from the same gamification and recognition features as the ERMP, although you might want to consider different content and a different user experience. This can be controlled by filters at entry point on both web, mobile and mobile app entry. External referrals may want more access to company information and different rewards. All shared content should contain a simple invite to join the talent network and the referral network with one click. The big consideration here is communicating that you will not mail any one of their contacts, or scrape or store data. Trust and transparency is the key factor in gaining access to a network. ADOPTION AND IMPLEMENTATION OF EMERGING TECHNOLOGIES We believe that our business-technology solution at Happy2Refer truly represents an innovative and cutting- edge technology approach to Recruitments through Referrals. Our Multi-Degree Referral Hiring Technology Solution combines elements of Big Data, Artificial Intelligence (AI) and Natural Language Processing (NLP) to gear an enterprise towards hiring and engaging with the best candidates out there. Our approach has elements that require business process changes in organizations and hence need buy in and direction from the CXO-level. While Referrals as a way of hiring have existed for umpteen years, we endeavor to use and apply new and cutting-edge technology to an age-old problem. Because of these reasons, we classify our approach and implementation as an Emerging Technology and most adoption and implementation of Emerging Technologies need a different approach for ensuring fast adoption and implementation in Organizations. Our Approach to Emerging Technologies incorporates the following elements: Avoiding the pitfalls of Emerging Technologies Identification and Assessment of Emerging Technologies Emerging Technologies and Public Policy: Lessons from the Internet Assessing Future Markets for New Technologies Disciplined Imagination: Strategy Making in Uncertain Environments Scenario Planning for Disruptive Technologies Appropriating the Gains from Innovation Managing Dynamic Knowledge Network Using Alliances to Build Competitive Advantage in Emerging Technologies The Design of New Organizational Forms Designing the Customized Workplace We have found a number of Organizations that we deal with are taking a refreshing approach to Referral Hiring. What we offer is a way to convert this latent potential.
  10. 10. Happy2Refer 10 ABOUT ATUL CHATUR Atul has over 15 years of diverse business experience across various sectors and geographies. He has headed several global technology initiatives at Infosys Technologies Limited, a leading Indian IT Services provider. He was a Global Business-Technology Solutions Leader at Infosys and has consulted for Fortune 500 companies in the areas of Organizational Capability and Management Systems Development. He has worked on several emerging technologies at leading, global technology firms including RFID technology, Logistics Management Systems and Organizational Capability Models. Atul has an MBA from INSEAD (France), an MMS from JBIMS, Mumbai and a B.E. (Mech) degree from VJTI, University of Mumbai. Get in touch: | +91-900-466-3010 | LinkedIn ABOUT NIMIT BAVISHI Nimit has over 6 years of cross-functional experience from technology to private equity to HR technology. He is the co- founder of Happy2Refer, a multi-degree referral product and Aglastop, an applicant tracking system. He has worked with the World Bank Group looking at investments across South and East Asia. Nimit has completed all 3 levels of Chartered Financial Analyst® (USA) and a B.Tech. (IT) degree from VJTI. Get in touch: | +91-992-052-5646 | LinkedIn ABOUT HAPPY2REFER ( Happy2Refer is revolutionizing the employee referral system by enabling multi- degree referrals to help companies reach out to their employees’ extended networks to hire. Happy2Refer's mission is to change the way hiring works leveraging mobile, social and network-based hiring. Friends of the Firm Network: Amplify hiring reach by 100x using employees expanded networks Engage Non-Employees: Reward and engage non- employees, turn them into your loyal referrers Intelligence: Leverage Intelligent algorithms that automate, filter and reach right-fit candidates through referrals Automation: Automate and measure 360-degree ROI Quality Passive Talent Pool: Build a diverse quality passive talent pool drawn from multiple networks Hiring ROI: Improve your hiring ROI by 4x