The sheer volume of potential directions to follow is confusing, daunting, and at times, just plain overwhelming. While some organizations have stuck a stick in the sand and are pushing forward with a defined approach, the majority of efforts currently underway will fail for one key reason: they rely solely upon a small handful of individuals attempting to maintain visibility in a sea of content growing exponentially.

Relying upon a social media coordinator, online brand ambassador, or a team of recruiters dedicating only a portion of their desk time to social media initiatives dooms such efforts to stumble and underperform. Such efforts produce corporate fan pages on Facebook, where the only comments ever visible are sanitized “PR” posts and boring job announcements! (I actually viewed one such page last week where the only wall post visible was a notice from the organization’s legal department advising visitors to the page not to post negative comments!)

Delivering an engaging, interactive, authentic, and personalized experience requires a scale of participation that the limited resources of the recruiting function simply cannot provide. The alternate approach, the one most likely to drive success, is an employee-centric approach that relies on your employees to build and manage relationships and the recruiting resources to coordinate, influence, and support their efforts.

The 12 Most Common Social Media Strategies

Most recruiting managers fail to think strategically when they develop their approach to social media recruiting. In fact, if you want to test someone’s depth of knowledge of social media recruiting, simply ask them to list the range of strategies that corporations can pursue. Most recruiting leaders will respond that they either don’t know enough about social media yet, or ramble off how they are adapting historical marketing efforts for delivery via social media.

As a corporate advisor, I’ve seen what a lot of organizations are up to, including initiatives already live and others currently in development. To help frame the discussion about this topic moving forward, I’d like to categorize the efforts into the following strategy categories:

Limited Scope Strategies

• The “laissez-faire” social media recruiting strategy — a do-nothing strategy where efforts are not managed or coordinated.
• Reference-checking strategy — a strategy that employs social media solely as another source of information during the reference-checking process.
• Post-and-pray strategy — a strategy that leverages social media as nothing more than another channel to broadcast employment opportunities to.
• Employer brand management strategy — a strategy that focuses on using social media to evaluate and influence the perception of the organization as an employer by distributing content about the employee experience via social media channels.
• Hybrid strategy — A hybrid strategy recognizes a need for different approaches to drive different types of activity supporting unique aspects of the organization. It uses components of nearly all strategies presented here.

Broad Scope Strategies

• Centralized social media recruiting strategy — a common strategy that employs recruiters as the sole agents of the organization and relies upon them to carry out full-spectrum activities including direct sourcing, relationship recruiting, employment marketing, employer brand assessment, and employer branding.
• The employee-centric recruiting strategy — a powerful “full spectrum” approach that exponentially increases the visibility of the organization in social media by using all employees as the agents under the direction/influence of the recruiting organization. (This strategy is the primary focus of this article.)
• The “talent community” strategy — a variation of the employee-centric strategy that has a longer-term focus on building communities and relationships based primarily on professional learning.
• Outsourced management strategy — A strategy that employs a third party such as a marketing or PR firm to manage a significant portion of the effort.

Organizational Strategies

• Banned social media strategy — a strategy that seeks to minimize the impact of social media for better or worse by blocking or severely restricting access to social media throughout the organization.
• Social media committee strategy — this strategy recognizes that where social media is concerned, the needs and wants of numerous organizational stakeholders may cross and seeks to coordinate efforts and more effectively marshal resources.
• Distributed social media strategy — a strategy that provides organizational guidelines on social media usage, but that permits units/groups within the organization to plan, develop, and execute initiatives without oversight.

Organize Your Employee “Army”

Few would argue against the fact that implementing a program to manage and increase the organization’s presence on social media is a hot topic among managers and executives. While the most advanced work is being done in customer service functions, marketing, product development, and HR leaders nearly everywhere are at the very least exploring the possibility of using this new channel of communication.

The majority of early efforts by recruiting leaders struggled to produce meaningful and measurable results, but from experimentation comes innovation and learning.

The primary driver of failure among early adopters wasn’t lack of interest or individual effort, but rather lack of scale!

Social media erupted as tools to facilitate interaction, and interaction in too many aspects of one’s life can be time consuming and exhausting! Fortunately there is an answer to this problem: don’t do it alone. Use employees to build relationships, and then take advantage of those relationships! It’s the same principle that makes employee referrals the No. 1 source of hire at most firms. Both programs rely on harnessing or leveraging other people’s time (OPT) to contribute to recruiting results. Because the ratio of employees to recruiters is extremely lopsided, using employee’s time results in a quantum increase in network size, visibility, and professional relationships that can drive future recruiting successes.

The added benefit: employees are better able to communicate in ways and on topics more valuable to their peers, which makes it easier for them to build successful relationships.

Microsoft’s industry-leading long-term community-building approach, which relies heavily on employee efforts (highlighting employee blogs, displaying ERP advertisement on employee profile pages, etc.), illustrates the direction that recruiting managers should take. Large firms like Google already rely heavily on their employees, and smaller firms have resorted to this employee-centric or employee-centered approach because they simply don’t have a significant recruiting team.

Before you waste a lot of time and effort and become frustrated, shift your recruiters away from doing most social networking and instead toward orchestrating and managing it. Organize your employees, managers, corporate alumni, and even your vendors to become an “army” of social media brand builders and recruiters.

A Close Tie-in With the Employee Referral Program Is Required

The foundation of any social media effort that is employee-centric must be a seamless tie-in with a world-class employee referral program. Without a direct connection, the majority of great prospects your employees identify will never make it into your recruiting process. Nothing frustrates your employees more than putting maximum effort into identifying a superstar who is interested in your firm and then finding out that the organization that asked for their help failed to follow up.

The handoff from employee to recruiter must be smooth and seamless so that the candidate isn’t “dropped” or doesn’t feel like they have been transferred from a caring and highly interested employee to an uncaring recruiter or recruiting process from hell.

To ensure that the back office is ready for your social media effort, audit your referral process for major flaws and ensure that social network referrals are processed in a way consistent with social network users’ expectations. The employee referral process should also be modified to allow employees to provide online profiles in lieu of traditional resumes when they’re not available. You might also add a feature that offers a small reward to network contacts who refer highly desirable names to one of your employees who are part of their network.

Up next week, I’ll discuss why recruiters cannot and should not be on the front lines of your social media army, and offer some tips on how to engage employees in your effort.

Instead, recruiting directors should design a unique “executive referral program” that encourages executives to make referrals for your high-level openings.

You might think a separate program is unnecessary because high-quality referrals should flow naturally from your executives as part of their job, but such an assumption would be a mistake. Instead, make every executive an “executive talent scout” by developing a specifically targeted executive referral program that periodically mines recruiting leads from your senior leaders. Such a program can produce amazing sourcing results without the need to pay either a referral or an executive search fee.

An Alternative to Executive Search

The explosion of social networking sites like LinkedIn and Facebook make it incredibly easy for almost anyone to identify and build relationships with talent for executive positions. As a result, now’s a great time to bring executive recruiting in-house.

Unfortunately, many executives are not well-versed in leveraging such tools to optimize their networking efforts, nor are they well-practiced at periodically scanning their networks for talent that may be a great fit for the organization outside their own downstream.

Encouraging your executives to provide referrals by crafting a program that improves upon their networking skills and proactively pulls recruiting leads from said networks for open executive positions is a cheap and effective way to augment or replace the use of third-party executives.

Focus on Referrals From Top-Performing Employees

While any well-designed employee referral program should excel at producing quality hires, programs that specifically target proactive referrals from top performers consistently produce the highest level of results. Unfortunately, many organizations prohibit their top performers (who happen to be managers or executives) from participation in referral programs. If your firm truly promotes based on ability, it only makes sense that your senior managers and executives are “top performers.”

It’s imperative that your corporate referral effort include two specific subprograms: proactively approaching your top performers working in key jobs, known as a “give me 5” program; and getting referrals from senior managers and executives through a high-touch “executive referral program.”

Why Executives Are a Powerful Referral Source

Successfully filling executive positions has the highest impact on the organization of any recruiting activity. Well-connected executives are likely to know, and thus be able to refer, more “outside” executives for these critical positions than anyone except a few superstar executive recruiters.

Executives are excellent referral sources because they generally have the most extensive networks of any employee group, save for your salesforce. Executives tend to travel more frequently, participate in benchmark studies, attend industry events, and assume leadership roles in professional associations and community boards.

Not only do your executives build extensive contacts through such efforts, they also build trust relationships (that are essential in recruiting). In addition, because of their work within professional organizations and their mentoring activities, executives are also likely to have extensive knowledge of “upcoming” talent in the industry.

Elements of a Benchmark “Executive Referral Program”

There is no standard format for executive referral programs, but some of the key components include:

• Proactive approach –- a critical design element of any top performer referral program is that you must proactively ask individuals for “names.” They might know the best people but never find the time to refer them. Although traditional referral programs rely on employees to take the initiative, executives are different in that they are severely time-challenged. Start by filling the calendar with regular times to approach them throughout the year. Then have your designated executive recruiter contact them during slack times of the day (usually early morning or late evening). Also try to convince them to look through their PDA, mobile phone, and email contact lists for names that fit your criteria. Encourage HR generalists and other senior HR managers to pump them for names during regular interactions and especially after they attend major industry conferences and events.
• Immediate response –- the No. 1 success factor for long-term success in any type of referral program is responsiveness. The same holds true when it comes to executives referrals. If they make a submission and you don’t respond immediately, the odds are that they will not make another. When an executive gets disenchanted, they will spread the word quickly among their peers, and participation rates will drop. Because a high volume of referrals automatically kills responsiveness, it’s critical that you proactively limit the number of referrals to a few high-quality names per cycle per executive. In the same light, if an executive makes a referral and the person doesn’t get selected, contact them and let them know precisely why.

Define Your Referral Targets Clearly

• Define your target jobs -– executive referral programs focus on getting your executives to refer highly qualified individuals for other executive jobs. Make sure that there is another process to handle “I have a friend” referrals for regular job openings.
• Educate them about “who” to look for -– Accepting or rejecting referrals is a highly political action, so the key is to start out with clear guidelines and targets. In particular, educate them about the firms to target, those that produce executives, and senior managers considered to be desirable skill-wise and compatible with your corporate culture. Have them seek out executives with skills and experience in the areas of innovation, technology, and international business. Encourage them to bring back the names of top individuals from conferences and benchmarking sessions. Also encourage them to provide you with information on how this referral’s skills and experience fit your firm’s needs. Whenever an excellent executive referral is hired, provide a summary of their qualifications to all executives so that they can better understand the level and the type of candidate that you’re seeking.
• Educate them about who to exclude –- Make it clear that you want executives to proactively seek out talent and not to automatically make referrals of individuals who approach you looking for a job. In addition, the program needs to have guidelines that discourage the referral of individuals they have not had the opportunity to directly observe in a work-related setting. In the rare case where a friend or family member might have superior qualifications, require your executives to provide clear evidence of their experience working with them and how their qualifications are truly superior. If an individual submits questionable individuals, give them immediate feedback, and if it is repeated, exclude them from the program for a period of time.

Improve Participation Rates

• CEO support –- get the CEO to publicly announce support of the program in front of every executive and establish his/her expectations for participation. In addition, CEOs also need to actively provide names. To drive ongoing support, periodically make other executives aware that the CEO has found time to make executive referrals.
• Other executive support -– get the entire executive team to agree to respond rapidly to any referral in their functional area; the initial response should be within 48 hours.
• Set a quota or target –- sometimes you can increase participation rates by increasing expectations. Consider setting a “target” referral goal for each executive. If you can’t get the CEO’s approval for formal targets, consider setting “expectations” by providing but not requiring a suggested target number of referrals each quarter.
• Recognize them -– executives are well-paid individuals, so standard referral bonuses might not have a large impact. However, you might find that recognizing their success and sharing it with other executives and the CEO might significantly spur their participation.
• Reward them –- most executives do not require a bonus to make a referral. However, if rewards are offered for making executive referrals, provide an option for the executive to “opt out” of the bonus and instead donate the money to a charity of their choice or the standard corporate charity. You can also make providing successful referrals part of an executive’s bonus formula, succession plan participation, or criteria for promotion.
• Add to job descriptions –- add to the job descriptions for all new executive positions the fact that they are expected to both encourage referrals from their employees and to make executive referrals themselves.
• Track and report referral rates -– executives are almost always highly competitive individuals. As a result, tracking and broadly reporting the forced-ranked performance of all executives will spur any slackers to increase their participation.

Implement Critical Program Features

• Assign a recruiter -– designate an individual recruiter to focus on executive referrals, answer questions, and seek out opportunities to talk with executives in order to gather names.
• Encourage a social media presence –- a good percentage of all referrals at least partially originate from social media sites. Executives, because of their title alone, can easily attract many followers on social network and social media sites. Encourage them to open profiles but also provide them with templates, coaching, and samples so that they can get up to speed quickly. Periodically assess their profiles and online activities and coach them on how to improve.
• Candidate experience –- any executive referral must be provided with an excellent candidate experience both during the initial referral and during the hiring process. Like or not, executives almost always feel that they are special, so you need to treat them exactly that way if you expect to land them now or in the future. Referrals need to be surveyed and metrics need to be kept to ensure that every aspect of the candidate experience process is positive and responsive.
• Fast-track assessment –- part of responsiveness includes assessing potential hires differently than most candidates. That means that you must contact them quickly and arrange for a candidate-friendly assessment process.
• Candidate feedback -– if an executive recommends someone, assume they are high-powered individuals with significant egos. As a result, you can’t just reject them out of hand as you might a standard candidate. Instead, provide feedback and guidance as to why they were not selected. If you frustrate the candidates they refer, your own executives will stop participating in the program.
• Define who can make referrals — In order to increase responsiveness, limit who can participate in this special program. In most organizations, the number of qualifying executives and senior managers should be less than 25.

Miscellaneous Actions

• Make it a database -– in addition to focusing on filling immediate executive openings, set as a secondary goal to build and continually add to a “who’s-who” database of all desirable executives. This means that top candidates not immediately hired remain in the database so executives and recruiters can build a relationship with them over time. There also needs to be a relationship-building process using CRM methodology to keep in touch with individuals who don’t fit a current need but you might want to hire in the future. This database can also be used for benchmarking, product evaluation, and learning, as well as recruiting.
• Names-only option -– many executives know the names of other high-potential executives but they don’t automatically have copies of their resume and often they’re too busy to find the time to acquire it. Where possible, develop a process where they can merely provide names, and a recruiter will do the follow-up work necessary to capture the updated resume.
• Conflict-of-interest issues -– avoid the common assumption that allowing executives to make referrals will result in a conflict of interest (meaning that they will refer and hire individuals just for the reward). In my experience, the exact opposite is true and most executives will go out of their way to avoid this perception. Educate them in the program literature about the few cases when it’s inappropriate to make referrals and always offer the option to refuse the reward or to donate it to charity.
• Use metrics -– implement tracking metrics to identify the effectiveness of executive referrals. Especially focus on metrics in the areas of candidate quality, candidate diversity, new-hire on-the-job performance, new hire retention rates, and executive referral program ROI.

Final Thoughts

Despite their extensive track record of success, employer referrals have been limited in scope. It’s a missed opportunity not to use them in expanded areas, including university recruiting, recruiting contractors, and for executive search.

Like it or not, the expansive growth of the Internet has changed the world of sourcing and candidate relationship building forever. Where executive sourcing used to be the exclusive realm of a few highly trained external executive recruiters, it is now possible for others to supplement their work.

Now is the time to expand the scope and effectiveness of your employer referrals program (note: if you’re interested, I have a book on improving referral program effectiveness). Act now before your recruiting workload increases and you won’t have the time.

The analogy doesn’t hold up perfectly because friend collecting is a Facebook pastime, and if you ask around you can almost always find someone to let you into any network. But it’s still not recruiter friendly. Unlike LinkedIn, where the search tools were designed with recruiters in mind, Facebook’s tools seem intended to discourage sourcing.

Yet those millions of Facebook members are too tempting a target to resist. Since the beginning of the year Appirio and Jobvite have both come up with applications that connect HR tech systems of their own or their partners with Facebook. Both however, are intended for corporate recruiters using either Salesforce or Jobvite’s recruitment system. Both focus on referrals.

InSide Job is different. It’s a Facebook application that individual users choose to deploy, making them searchable and findable to other InSide Job users.

The idea came to Lorne Epstein, a career recruiter, as he tried to get contacts out of LinkedIn for free.

Says Epstein, “They charge $10 for an email (there are corporate accounts, but he’s talking about an individual search) and there’s 40 million profiles. Facebook has 250 million and it’s only getting bigger.”

So Epstein, author of You’re Hired! Interview Skills to Get the Job, came up with a simple way to connect recruiters with Facebook users, and job seekers with the people who might be able to help them get a job.

It’s called InSide Job and it’s an application that allows its users to search other InSide Job users.

The process is straightforward enough. You must choose to use InSide Job and allow it to import resume information from your Facebook page or enter it manually. Then sit back and wait for a recruiter to contact you or search for people in the InSide Job network who might be helpful in your job search.

Coincidentally, Epstein pulled together the people to develop InSide Job from his own personal network.

Epstein freely acknowledges that the challenge for Inside Job is adoption. In order for it to be a moneymaker for Arlington Soho, the company he set up to manage and market the application, he figures the user volume would have to be around 100,000 or more. Considering there are hundreds of available applications, growing the 5,000 current users is no mean feat.

Musical Chairs – InSide Job from Lorne Epstein on Vimeo.

Flashmob marketing with musical chairs in Washington’s Dupont Circle can’t hurt, but the competition for attention is keen, and Jobvite and Appirio have a head start.

Still, InSide Job is further evidence that recession or not, there’s intense interest in leveraging the social media.

Even though ERE Expo ‘09 (Spring) ended more than a month ago, I thought of writing this piece connected to that event. Thanks to an invitation from Todd Raphael of ERE, I flew down to San Diego from India and enjoyed making a presentation on “10 Secrets-to-Success of Employee Referrals in India.” It was one of the breakout sessions and obviously many had other choices to attend. To those who I missed interacting with, I am now making an attempt to share my thoughts again through this medium.

Before I got into the main theme of my presentation I shared some thoughts about India. I assumed that most in the audience would not have experienced India and hence a small introduction helped them to appreciate the context. My PowerPoint presentation is embedded below, along with this write-up. It will be good to go through that with the following synopsis in mind:

The introductory part:

• India is one-third the size of the U.S., but has almost four times the population. The U.S. is more than five times richer (GDP) than India, which is still largely an agricultural economy. However the Indian population is considerably younger. This is a huge opportunity — and also a challenge — for the leadership.
• India is a land of contrasts. This is bewildering to outsiders and exasperating to Indians. Things are changing faster than ever before but not as fast as all of us want.
• One of the reasons for the contradictions is India’s complexity.
• The IT industry is currently the best-known face of India in many parts of the world. It has had impressive growth. Even with the general slowdown it expects to do relatively well. This means that it will continue to need skilled manpower.

The hiring environment in India and the importance of “references”:

• Meeting manpower requirements is a major hiring challenge, given the complexity and contradictions in the country. Recruiters have to cope with problems of access, unique expectations, and the multiple influence groups. The bulk of what follows is an attempt to cope with much of this.

About my employer, Aricent:

• Aricent is an international leader in the field of communications software. It believes in restricting its business to niche communication software development, testing, and maintenance rather than spreading thin into multiple application areas. It has operations in 19 countries worldwide. About 80% of development work happens in India.

• Some of our top co-creations with our esteemed “who’s who” list of customers in this line of business have been amazing.

• Aricent’s success in the field of communication software also lies in its capabilities of hiring the right people at the right time, and doing so using the most cost-effective channels and processes. One of the salient features of hiring at Aricent has been its employee referral program named “iRefer.”

iRefer: The Case Study

I presented Aricent’s iRefer program to illustrate the theme of my presentation, “10 Secrets-to-Success of Employee Referrals in India.” Let us now see what these 10 secrets are:

Inspiring Awards and Recognition:

• A successful participant of this program can easily earn 10% to 15% of his/her annual salary through referral bonuses, plus many other special awards in kind.
• Special monthly/quarterly/annual prizes for winning referrers have always been a big draw amongst the employees.

Adhering to Service Level Agreements:

• The members of the recruitment team are committed to certain SLAs with the referrers as part of the program. Data showed that the adherence to SLAs have been approximately 95%. This gives the confidence to the employees to participate in such a program.

Enhancing Participation:

• The team focuses on increasing participation in different ways. The participation has grown from 9% to 35% in the last seven to eight years.
• Transparency in process, timeliness at every stage of process, personal engagement with individuals and groups, and effective internal communication have been the essential factors in enhancing participation.

Branding and Communication:

• Unlike in many organizations, the internal branding and communication for an employee referral program are handled by the recruitment team itself. These activities are not outsourced to the corporate marketing or the communications teams. This helps to reduce the cycle time considerably since there is exclusive focus.
• The essence of branding and communication has been to feel the pulse of the employees and build themes around that to inspire them to participate in all the programs under “iRefer.” In fact, the brand “iRefer” too was a result of an all-employee global contest for proposing the most appropriate name for the referral program. In the below presentation, one can see various creative uses of different communication methods.

Special Hiring Programs:

• These are the “toppings” on the base programs. Special programs are announced over and above the regular plan to fulfill short-term requirements of either special skills or some specific levels of people within a specific period of time.
• Two such special programs have been showcased in the presentation. One of them helped us to hire a certain number of engineering college graduates in an off-season. We did an off-campus drive and had amazing gains in a short period of time at 25% lesser cost per hire. The second program gave us great results, too, when we set out to hire people with special and specific skills which were slightly different than our usual needs.

Catching “Boomerangs”:

• iRefer’s contribution to our multi-channel “ex-Factor” program was significant. 57% of “boomerangs” we hired through the “ex-Factor” program were through “iRefer.”

Analyzing Metrics and Success Measures:

• We are all aware that “data without analysis is paralysis.” Like the way an immense amount of data mining is done in the whole recruitment function, “iRefer” too captures a lot of data. We have tools and processes to do so. The success of the referral program is dependent on how swiftly we can respond to different situations and requirements and how we can consistently improve our processes and systems to respond so. Correct and timely analysis of data makes us learn and improve fast.
• One such case study showing how a change in communication methodology helped to increase the flow of resumes.

Feedback Mechanism:

• Taking feedback from referrers and potential referrers is as important as giving feedback. While the recruitment team is committed to give timely feedback on the referred candidates to the referrer within the defined SLAs, it is also important to take feedback from the referrers at regular intervals.
• The feedback from referrers is taken through an internal satisfaction survey and through a structured chain of escalation hierarchy. In addition to that, we have an “iRefer” help desk on our intranet.

Benchmarking Industry for Improvement:

• Learning from good competitors and sharing with them are always great ways to improve. This is true for all industries. The recruitment team of Aricent has been benchmarking its own “iRefer” program with many big names in the industry through formal and informal sources. Some of the data given against each competitor could be estimates and are based on the best possible information available.

Overcoming the Negatives:

• Employee referral programs also have to deal with certain negative perceptions universally. The main perceptions which we focused on are (a) possible lack of transparency in the system; (b) possible nepotism; and (c) the fear of “money” affecting relationships. The need to communicate upfront, educate employees correctly about the processes/norms, and ensure robust policies are the essential ingredients to overcome these possible negatives.

I had ended the session with two additional slides on how “iRefer” would operate in the current recessionary environment and posed some questions for the future.

I hope all, particularly the ones I left behind at San Diego, enjoy going through the presentation. If anyone wishes to connect with me, post a comment here.

McCarty, sourcing manager at the infrastructure/construction company Parsons, is trying to address this recruiting challenge partly by spreading the good Parsons word through social media. McCarty, along with Yahoo’s Carmen Hudson and TMP’s Louis Vong, is speaking at a workshop put on in Los Angeles (where he’s apparently a rare non-car-owner) by SHRM’s staffing-management association. He was brought to Parsons partly to help infuse higher-tech tools into the company, where many employees are in their 50s.

To help craft their Web 2.0 strategies, McCarty says companies should ask themselves the following questions:

• What are the best Web 2.0 options to use?
• What is your goal? Is it branding? Is it sourcing? Is it conversion?
• Who is your target audience? Is it internal? Is it external? Is it both?
• How much content can you manage? In other words, you’ll get out of it what you put into it, but what time can you put in? Says McCarty: “You can create a really great front page, but if it’s not maintained, it’s not marketed, and if you don’t drive people there, it’s not going do you any good.”
• Are there other groups in your company that are currently leveraging Web 2.0 technology, that you can piggyback on? Can you share usage, tools, and techniques with these groups? Can you convince a non-HR entity to pay for costs?
• Do you have the ability to move or reconfigure budget to accommodate costs?

McCarty’s No. 1 source of candidates is still employee referrals. Social recruiting, he says, is merely a way to get more of them, and to get better ones (topics to be explored further in June).

He says that people (the general public, not HR/recruiting types) are just beginning to realize that “everything you publish is there, forever.” He has dropped family members from his Facebook “friends” collection because what they posted was inappropriate. “If you can’t control yourself, I now control you,” he says.

The 34% is employee referrals. The 20% are recruiter-sourced. The 17% is from the company’s site, though of course that begs the age-old question about how people arrived at the site. The remainder: 15% job boards; 11% temp conversions; 3% internal transfers.

The chart’s not so unusual. What we like is that TiVo shares it with candidates on its career page. The DVR leader will speak (commercial-free) at ERE’s 2009 Fall conference in Florida.

For more on referrals, check out the May issue of the Journal of Corporate Recruiting Leadership, where Accenture will be profiled. The company’s a candidate for an ERE Recruiting Excellence Award in the employee referral category (winner to be announced at the upcoming Spring conference).

Sjoerd Gehring, global employee referral lead for Accenture and a marketer by trade, led the design, pilot, and now the global roll-out of a new employee referral program for the management, consulting, and technology services giant. Gehring listened to employees, met their needs, and got a big return.

“In looking at the candidate referral process from a marketing perspective, it’s often focused on the needs of the HR department, not on the needs of the referring employees,” says Gehring. “The key is to listen to your employees’ expectations and keep their desires at the heart of the program.”

Gehring built a rapid rewards feature into Accenture’s plan, which pays the referrer a partial bonus of 10 to 20% (what he calls a teaser bonus) just for referring a quality candidate. The balance of the bonus is paid to the employee immediately, once the candidate is hired. His philosophy is simple: First, a referring employee is not an agency, so they shouldn’t be held accountable for vetting candidates. Also, it’s less expensive and more productive to encourage employee referrals by offering small bonuses than to pay agency fees.

During the Accenture pilot, referrals increased from 14% to 32% of sourced candidates over the prior year, and the number of new hires from referrals increased from 36 to 318 — all because Gehring offered quick bonus payments, with no strings attached.

by Todd Raphael and Leslie Stevens

Half of these cuts are probably necessary anyway, the balance most likely an overreaction to the dismal economic conditions most companies are now facing.

There is an expectation that along with the cuts these recruiting departments need to drastically improve their productivity by 30%-50%, almost overnight.

The good news is that while most corporate recruiters are working hard, the majority are not working smart.

As a result, getting 50% or 100% productivity gains isn’t that hard to do. With this in mind, here are some things recruiting leaders can do to increase overall productivity by at least 100%.

An Almost Endless Stream of Ideas on How to Increase Corporate Recruiting Department Productivity by Over 100%

1. Only hire recruiters who are, or can become, partners with their hiring managers. Recruiters who are partners with their clients get more time to discuss real job needs, they send out fewer candidates, make more hires, and overcome natural hiring manager resistance to see top candidates who don’t fit the bill on paper. Partners make twice as many placements per month than recruiters who are perceived as vendors to their clients, so this is a huge productivity opportunity.
2. Make sure your recruiters are competent to do the work assigned. One way to increase productivity is to ensure all of your recruiters are as good as those in the top 10% on your team. (Contact me if you’d like to check out our new online recruiter assessment tool we’ve created with Profiles International.)
3. Make sure every recruiter understands the jobs they’re filling. Sadly, most recruiters don’t know much about the jobs they’re representing. Whether it’s a call center in Chicago, a sales rep in San Jose, or a J2EE architect in Ashtabula, recruiters need to know what drives on-the-job success, why the job is critical to the company, and why a top person should consider it.
4. Make sure your recruiters totally understand their target market. Recruiters need to be subject-matter experts regarding the job, the industry, and especially the needs of their ideal “target” candidates. Creating candidate personas is the first step, including demographics, associations, first- and second-degree networks, conferences, recognition awards, academic connections, and motivating needs. This allows them to write compelling ads, post them in the best places, know exactly who to call, what to say, how to get great referrals, and how to convince the best people your job is the best of the bunch.
5. Make sure your recruiters know how to recruit. Recruiting means getting more candidates interested at the beginning, ensuring that few drop out in the middle, and 95% of all offers are accepted on fair terms. Effective applicant control is at the core of this and most recruiters don’t even know what this even means. Do you know how many candidates you’ve lost because your recruiters dropped the ball somewhere in the process?
6. Make sure your recruiters are respected by the candidates they represent. If recruiters aren’t seen as subject-matter experts and career advisors by their candidates, you’re losing some great people before the process even begins. You’ll get a good sense of this by calculating how many “A” level candidates your recruiters uncover and place on a typical search. If it’s not 70% or more, you’ve found a huge productivity improvement opportunity.
7. Make sure your recruiters can accurately assess candidate competency. Recruiters should be able to get this right 80% of the time with a 30-minute performance-based phone screen, at least to the point of not embarrassing themselves by recommending a totally unqualified person. Think of the time wasted sending out a candidate who shouldn’t be seen in the first place.
8. Make sure your recruiters are tough-minded, confident, and persistent. The best recruiters don’t take no for an answer, they defend their candidates from superficial assessments, and they close on career opportunities more than money. These recruiters are 2-3 times more productive than those who cave at every negative. Double your team’s productivity by making sure your recruiters are those who don’t give up without a fight.
9. Manage time. Cold-calling people you don’t know is a big time-waster. Calling people who are good who will call you back is an ok thing to do if a great ad didn’t work. A sequenced sourcing strategy based on the “low-hanging fruit principle” of selling should be established for every search assignment. Then, measure your recruiters on qualified sendouts/hour to start finding out where your team is wasting its time.
10. Don’t let your recruiters call people who won’t call them back. Start tracking voice-mail return rates. Those with the highest percentages (target a minimum of 75% to start) usually spend more time calling referrals, are seen as subject-matter experts or come across as extremely professional. To improve productivity 300%, either train your recruiters to increase their callback rate from 25% to 75%, or hire those who already do it without complaining how hard it is.
11. Make sure your recruiters get 2-3 high-quality referrals on every call. The ability to get high-quality referrals is the secret behind passive candidate recruiting. A great referral will call you back if you mention the name of the great person who provided the referral. Recruiters then need to prequalify every referral and only call those who are worthy. If you track great referrals per call, you’ll quickly know which recruiters are able to play in the passive candidate recruiting talent game.
12. Prepare a process-flow diagram of every step in your hiring process and calculate the yield at each of these steps. Look at each step in your hiring processes and see where you lose the most candidates. First, track ad response and apply rates. At the back end of the process, figure out how many good candidates were poorly assessed or excluded for dumb reasons. Then start working on those process steps that can double or triple your team productivity.
13. Make sure you’re attracting early-birds, not leftovers. When you examine the problems associated with most active candidate sourcing programs, you quickly discover that they’re attracting leftovers, or candidates who have been in the market a few weeks or more. If you’re not attracting the best of the bunch as soon as they start looking, you’re wasting time and resources going through electronic stacks of resumes of unqualified people. Implementing an early-bird sourcing strategy can increase your active candidate sourcing productivity by 100-200%!
14. Eliminate all barriers-to-entry. The best people, whether they’re active or passive, are more discriminating and don’t want to be pushed into filling in an application before they’re ready. To address this critical need, establish an open-door policy where you allow candidates to “just look around” before getting serious. This is what Web 2.0 is really about — establishing two-way relationships using a variety of entry points to attract someone’s attention.
15. Manage your 500-pound gorillas. A huge productivity loss is managers who can’t recruit, don’t know real job needs, or can’t accurately interview. If you’ve ever lost a good candidate for one of these reasons, or if managers refuse to see a top-notch person with a slightly different skill set, you know how much time is wasted here. Getting hiring managers inducted into the real world of hiring top performers will double your productivity almost overnight. Not doing it will diminish the impact of everything else mentioned here. (Contact me if you’d like to find out about our new gorilla taming programs.)

Doing everything described will absolutely result in a 100%-200% productivity gain. If not, you didn’t do them right, so start over and try again. Even if you did achieve the productivity improvements, start over again anyway to get another 100%-200% productivity improvement.

Things are changing so fast you need to keep at it by establishing a continuous improvement program. Bottom line, this is what this article is really about.

With this sobering news in mind, I offer those of you in all quartiles this short, 10-point personal evaluation guide. While some of them are a bit crazy, they’re based on comparing your performance to the best in the business. It will tell you quickly whether you’re in the top 25% and how to stay there.

If you’re not in this double RIF-proof group, you’ll find out what you have to do to get there. For those of you doing any pre-RIF assessments, it will help you figure out who goes, who stays, and who’s worth saving. What a crazy idea! (Note: your comments are being collected on my Recruiter’s Wall blog.)

Using Adler’s Crazy Metrics as the New Recruiter Scorecard

The world of recruiting continues to evolve faster than most of us can adapt. To see where you rank in the new age of recruiting, evaluate yourself on each of these factors on a zero- to 10-point scale.

This has been designed for full-cycle recruiters and it’s based on a curve, so you need to score around 65-75 points to be in the upper quartile.

1. Voice Mail Return Percent. If you’re calling passive candidates (those not looking) you should be in the 70%-80% range here. This is worth a full 10 points. Average in the current economy is about a 20% return rate and is worth about 3 points. You only score points here if you’re calling people who are fully employed or where your personal influence is the key to getting them interested. (Note: see point 3 for how to increase your voice mail return rate.)
2. Number of Days Looking. Getting people as soon as they enter the job-hunting market is a huge competitive advantage. So start asking your active candidates how long they’ve been looking. If you’re the first recruiter or company they’ve spoken to, give yourself all 10 points, but only if you had anything to do with pulling this feat off. You get a big donut if the candidate says they’ve already accepted another offer, they’ve got other offers pending, or if they’ve been in the market for more than two weeks. Give yourself 5 points if most of your candidates found your ad in the first 5-10 days of their search. If you had nothing to do with making sure the ad was found, that it was compelling, or in causing your candidate to respond, you don’t get any of these points. Instead, give them to the person who pulled this off.
3. Referrals Per Call. To score all 10 points on this factor, you need to average 2-3 worthy referrals per call. Someone is worthy if they are highly qualified and a strong candidate for your open job, or personally knows someone who is. An average score (3 points) on this factor is about one decent referral per call. I have a personal rule that has enabled me to increase my personal productivity by 300%! It goes like this: first, don’t call anyone who will not call you back! Second, don’t call anyone who’s not a top performer. Third, only call worthy prospects. The only way to pull this is off is to get 2-3 worthy referrals on every single call you make. (Here’s a networking tips article for help on improving your score here.)
4. The Maslow vs. Money Index. Here’s an article summarizing Maslow’s hierarchy of needs. It’s must-read material for recruiters. The key point here is that good candidates don’t take new jobs primarily for the money. They take them for some combination of growth, opportunity, a chance to learn new skills, to do something important, or to increase their personal satisfaction. Unfortunately, most candidates ask “what’s the money?” early in the courting phase, putting most recruiters on the defensive. Good recruiters quickly shift the conversation to Maslow-related ideas, suggesting that the primary reason a person should select one job over another is because of the opportunity for growth and personal satisfaction it represents, not the money received. (Caution: this will only work as long as your comp is reasonably competitive.) Score all 10 points if you handle this money question smoothly all of the time, and zero points if you stumble all of the time. Give yourself 2-3 points if you can convince a fair percent of your candidates to reconsider, independent of the pay.
5. Not Interested Conversion Rate. This is the percent of candidates who initially say they are not interested in your job opening but who reconsider. You score all 10 points if you phrase your questions in such a way that everyone says they’d like to talk with you about your open opportunities. Score zero points if you walk away from most of these candidates without some type of clever rebuttal. The key to good recruiting and scoring high on this factor is applicant control. You know you have it when you — the recruiter — determine if you’re interested in the candidate, not the other way around.
6. Partner vs. Vendor Ratio. If you’re a partner with your hiring manager clients you have a better understanding of real job needs, you’re more influential, they’ll see candidates who are a bit off the mark based on your recommendation, they’ll trust your judgment, and you’ll make more placements without wasting time. A vendor-like relationship with a client puts the recruiter into a subordinate and less-influential role. The recruiter typically has less knowledge of real job requirements, the hiring manager refuses to see candidates who don’t meet the exact requirements, and the manager won’t reconsider candidates he or she has incorrectly assessed. Divide the percent of your clients who are partners by those who are vendors (Note: 50/50 is equal to one and is worth 4 points.) A good ratio here is two, meaning two-thirds of your clients treat you as a true partner, so give yourself 7-8 points for this.
7. Unsolicited Referral Rate. If you regularly get great referrals without asking for them you score high on this factor. Great recruiters are known in their niche market and top people want to connect with them. Give yourself all 10 points if at least 50% of your placements are made from these unsolicited referrals. If you get 4-5 strong unsolicited referrals each month, whether you place them or not, give yourself 5 points on this factor. You get a big zero if you don’t get any good referrals, unsolicited or not.
8. Technology Utilization Factor. Whether it’s being an ATS geek, a Web 2.0 aficionado, a search optimization fanatic, or a CRM guru, recruiting in today’s era requires significant technology expertise. If you still advocate a tech-free environment, you earn a big zero on this factor. Googling for resumes is not a big deal anymore, so you get nothing for being good at this. If you’re training others in using the latest recruiter-tech stuff take all 10 points. If no one laughs at your lack of tech-expertise, score 5 points here.
9. Advertising Efficiency. To get all 10 points on this factor, you have to make sure your ads are found and at least 50% of the people who find them click through. This means you need to use reverse engineering to select the best boards and make sure your ads are so compelling top people are intrigued enough to respond. If you just post your traditional job descriptions on boards that have not been vetted, your score is equal to the number of great people who apply — zero!
10. Gauge of Persistence. Recruiting top people is never smooth. People always have concerns. Candidates always have other offers. Managers always want to see more candidates. Pushing through these issues is at the heart of great recruiters. If you can convince most of your candidates to reconsider, get your managers to see and hire people who don’t meet the exact requirements, and are constantly pushing the process forward, regardless of the challenges, you deserve most of these 10 points. Take them all if your candidates and clients thank you for persevering. You don’t deserve any points here, if you complain about all of the challenges involved, procrastinate, or make excuses about your lack of results.

Free BONUS ADD-ON: Buyer vs. Seller Quotient

Divide the percent of the time your strong passive candidates are selling you (meaning you’re the buyer) by the amount of time you’re selling them (i.e., 50/50 is equal to one and worth 5 points). If you sell more than you buy, you get 1-2 points, and if you buy a lot more than you sell, you get 7-8 points. Good recruiting is about getting a strong candidate to sell you on why he or she is qualified for the job. They’ll only do this if they believe your job represents a strong career move for them. This is also referred to as applicant control and is a core competency of every top recruiter.

New-age recruiting is about influencing people who have multiple opportunities to consider what you have to offer. While there is more technology now available to find people, this is now the easy part. Getting on the phone, recruiting them, and networking is now the real skill involved with being a great new-age recruiter. That’s a crazy idea, isn’t it?

Economic downturns, mergers, and acquisitions all place pressure on organizations to curb labor costs. No time in the last decade has that tenet been more apparent than right now.

Layoffs, large or small, force organizations to cut loose the talent in which they have invested salary and training dollars. While talent released during a layoff today may seem like little more than an expense, tomorrow it could be the difference between success and failure.

World-class organizations need to develop a process that will allow the organization to quickly and easily “re-recruit” alumni with proven track records of success when economic conditions warrant hiring.

The solution that makes re-recruiting possible is a corporate alumni program. Alumni programs allow you to maintain a mutually beneficial relationship with former employees who may someday provide significant value again, providing you with an excuse to remain in contact and a mechanism to recruit them back quickly when needed.

Because so much great talent is being released into the labor market right now, it is a great time to either start a formal program or upgrade your existing corporate alumni or “boomerang” program.

Corporate Alumni Programs Can Also Increase Revenues

While the primary reason organizations develop alumni programs is recruiting-related, lots of research demonstrates that investing in corporate alumni programs increases the sales lead generation and deal closing capability of the organization.

As many sales professionals are seeing their jobs evaporate today, it makes perfect sense to partner with sales leaders to build a program that is designed to support both the recruiting and sales organizations mutually.

Leveraging sales professionals who have been let go as lead generators, brand builders, and in some cases, as customers provides added capability to the organization in a time of budget cuts and hiring freezes.

If you treat them right, former employees (i.e., corporate alumni) can be converted into “ambassadors” for your organization. Despite being laid-off, odds are that a significant number of former employees remain loyal and committed to your organization.

If you proactively build and maintain a relationship with them after they leave, they will continue to “talk up your firm” and maybe even become a customer when they land in a new role.

Program Goals and Benefits

Well-designed corporate alumni programs can benefit the organization in many ways. Some of the possible goals of corporate alumni programs include:

HR-related goals:

• To improve the quality of hires by rehiring top performers and innovators (boomerang rehires are low-cost, typically have higher retention rates and reach minimum productivity much more quickly than most external hires).
• To increase the number and the quality of employee referrals by expanding the program to include alumni.
• To strengthen the employer brand image throughout the industry.
• To increase retention rates among current employees by developing a stronger positive image.
• To increase the number of mentors available to current employees.

Business-related goals:

• To generate direct sales by making alumni customers.
• To increase the number of leads generated (customer referrals).
• To capture ideas and innovations from alumni.
• To get product assessment help.
• To get benchmarking help and to learn about industry best practices.
• To gather competitive intelligence.
• To get help from alumni in building strategic partnerships.

What Differentiates Great Programs From Average?

Firms like McKinsey and Microsoft were pioneers in formalizing relationships with their former employees. Other firms, like Deloitte, Ernst & Young, Booz Allen, and Bain, join the pioneers in operating successful corporate alumni programs with features that set them miles apart from the typical alumni program.

After years of research, I’ve identified 14 factors that clearly differentiate great programs. Whether you’re starting your own, upgrading your current program, or considering using a vendor to operate your program, it is important to incorporate these key differentiators:

1. A strong business case. The most important differentiator is the perception of the program as a business initiative, not just another HR fad. Establishing the program as a business initiative requires that it be supported and budgeted by leaders because a clear connection has been made between operating a successful program and increased revenue/profit. At the best firms, the program manager works with the CFO’s office both to demonstrate the ROI of the program in terms of “dollar impact.” That means that the dollar value of bringing back top performers and the economic impact of having your former employees act as “brand and product ambassadors” has been quantified. In fact, at least one firm has made the argument that the corporate alumni program should be housed in business development rather than recruiting.
2. It prioritizes alumni and treats them differently. While most programs treat all corporate alumni equally, the very best prioritize their alumni based on their future value to the organization. For example, if both Homer Simpson and Tiger Woods were both corporate alumni, it would not make sense to treat them both equally because one you would want to return and the other you wouldn’t. Obviously, Tiger would be more influential and well-connected and thus he could more effectively spread the word about the firm and its products. Target top performers, individuals with key skills, and innovators as potential boomerang rehires.
3. They use technology. The days of running corporate alumni programs off of Excel spreadsheets are gone. The best firms and vendors use either customer-relationship management software or emerging social networking tools to keep track of alumni and effectively maintain the relationship. Alumni are contacted periodically with personalized information based on their individual needs and expectations. Web-based “alerts” are utilized to keep up with the activities and accomplishments of alumni.
4. Dual goals of recruiting and development. The very best corporate alumni programs have a dual focus. While almost all programs focus on rehiring alumni, the very best also commit major resources into building an alumni network for business development purposes. The second focus is impactful because not every former employee can or would want to return but they can all help make referrals and positively spread the word. This business development component is especially important in tight-knit industries where most employees stay within the industry throughout their career.
5. They utilize social networks. It’s been true for a long time that social networks are effective mechanisms for building and maintaining relationships. As a result, most corporate alumni programs leverage either public social networks or build private social networks to expand the scope of their program. The best programs leverage both, just as great recruiting organizations use multiple channels to reach target talent.
6. They use metrics to continually improve. Traditionally, these programs were allowed to operate because they made logical sense. However, in a fast-changing world, the best programs have learned to use metrics to drive continuous improvement. The shift to “fact-based decisions” means that program emphasis and resources are continually shifted toward areas with a higher impact.
7. Above 10% rehire rate. The very best programs produce exceptional results, which means that between 10% and 20% of all hires should be boomerangs. A significant percentage of business leads and sales should also be directly traced to your corporate alumni network.
8. 100% electronic capability. Although face-to-face meetings are still necessary, the very best programs have the capability of working 24/7 around the world. That means that every key program element must be Web-based. Legacy paper-based systems are simply too slow and expensive.
9. A dedicated alumni webpage. The very best alumni programs feature a webpage designed exclusively for corporate alumni. It might include forums, FAQs, blogs, learning wikis, podcasts, videos, and an alumni directory that can be sorted by name, location, and interests.
10. It has a diversity and a global component. The best programs understand that diverse alumni and those with international backgrounds have needs that might differ from the average. As a result, they offer a range of information and options that can be tailored to fit individual needs.
11. It utilizes a broad definition of alumni. In traditional programs, participants were exclusively full-time employees who voluntarily left. However, the best programs realize that there are a wide range of individuals who can act as firm ambassadors, so consider including laid-off workers; retired workers; former part-timers; contractors; interns; applicants who declined the position; and spouses of former employees.
12. An onboarding component. Firms that want to excel begin educating employees during orientation about the firm’s expectation that this is a “lifelong” relationship. They build on that expectation by involving current employees with alumni. And should they leave the firm they participate in a “welcome interview” that welcomes them to the next phase of their relationship with the firm.
13. A dedicated staff. The best firms have a dedicated staff that allows for continuity and allows the firm’s program to become a competitive advantage.
14. Proactively improve the reasons for leaving. Rather than paying lip service to the under-lying causes that convinced some of the top employees to leave (bad managers; a lack of challenge/growth), the best programs confront these issues head on. So postpone exit interviews until well after separation. This way, you can identify the real cause of turnover, develop a formal process to minimize future turnover, and remove obstacles that may inhibit former employees from returning.

Final Thoughts

It’s unfortunate that the current economic climate is forcing firms to release so many valuable employees.

However, you can look at this as an opportunity to turn “lemons into lemonade” if you can maintain their interest in returning and if while they’re away, they continue to drive business to your firm.

Due to advances in technology and social networking, the cost of operating alumni programs is low while the ROI of alumni programs is higher than ever. Instead of considering those who have been forced to leave your firm as value-less, and those who opt to leave as traitors, simply look at departures not as a goodbye, but rather, as an “I will see you later.”

Free Webcast on Excelling at Corporate Alumni Relations
Dr. John Sullivan will deliver a free webcast detailing how organizations can excel at engaging corporate alumni on Tuesday, March 3, 2009 from 1:00 PM – 2:00 PM ET. Those interested in attending can learn more here.

Once again referrals have turned out to be the leading source of external hires in the annual CareerXroads source of hire survey. In 2008, 27.3 percent of the external hires made by the 45 large employers who completed the survey came from referrals made primarily by employees, but also by alumni, vendors, and others.

Corporate web sites — a destination and not an actual “source,” insists the report — was second with 20.1 percent of the external hires coming from there. Rounding out the top three were job boards, which accounted for 12.3 percent of the hires.

No big news in those results. For the last several years the survey that CareerXroads principals Gerry Crispin and Mark Mehler conduct every January has consistently found referrals accounting for about 3 of every 10  external hires made by the participating companies.

What is different this year is that 38.8 percent of all openings were filled by internal transfers and promotions.

“We found that very interesting, ” says Crispin. “That’s the highest number since we started this survey eight years ago.”

His explanation is that despite hiring freezes, critical openings still have to be filled. But, now that’s being done internally and the  jobs the transfers leave are simply being absorbed by the remaining staff.

In the report, Crispin and Mehler put it this way:

“… the significant increase in the proportion of internal to external fills in 2008 versus 2007 (28%) is at least partially due to the deteriorating economic climate during 2008. We think this conclusion is further supported by the survey respondents’ estimate that the number of contingent workers employed by their respective firms decreased from 18% in 2007 to 10% in 2008. Clearly the data reflects a shift in emphasis to filling internally and squeezing external hires.”

The report also notes that some of the surveyed companies are filling almost half their vacancies by internal promotions and transfers. That’s something those companies should report on their career sites, Crispin and Mehler say, since it evidences their commitment to career development.

The survey report also identifies a few new trends and strengthens trends first noticed in previous years. Most notably:

1. Third party recruiters and agencies as a source of hires have been in decline since their zenith in 2005 when the survey indicated 5.2 percent of hires came from there. In 2008 that number had fallen to 2.7 percent, a decline exacerbated by the overall drop in hiring.

   “Don’t place your bet on this side of the market having much of an upside when the economic climate reverses. It won’t,” the report says.

2. CareerBuilder has overtaken Monster among the job boards (28.9 percent vs. 23 percent of the total hires coming from job boards), but the report calls it a pyrrhic victory. “We believe this SOH has indeed peaked and predict it will diminish in the future.” However, the report suggests that all of the big, national boards are losing share to the niche sites, which collectively accounted for 36.2 percent of the hires coming from job boards.
3. Perhaps not surprisingly, not one of the surveyed companies said it planned to increase hiring in 2009. Showing the depths of the downturn, the companies collectively expect to hire 15.7 percent fewer employees this year than last.

Recruiters have come to regard the annual CareerXroads Source of Hire Study as a sort of guide by which to measure their own company’s sourcing. However, Crispin and Mehler caution that, “we seek to stimulate discussion about staffing issues rather than encourage blind acceptance of data at face value.”

The report is compiled from data reported by 45 firms (out of more than 200 invited to participate) who collectively filled 309,600 openings last year.

Note: The chart accompanying this post has been updated to include two categories omitted from the previous version.

Right now, the business climate happens to be a little frightening. Since it looks like things will be like this for a while, I’d like to offer some thoughts on something that you’re certain to encounter in the next few months: a notable increase in executive referrals.

Anyone who spends time here knows that employee referrals are a simply fabulous way of bringing talent into your organization. The benefits are legion: employee referral hires are cheaper, pre-screened, more likely to be successful, increase employee morale, etc. A well-run program that delivers a consistent experience to both the candidate being submitted, and the person doing the submitting, will pay for itself many times over.

Executive referrals are a little different . . .

They come in three general categories. First, are the referrals that are simply sent to, say, the CEO’s office by strangers hoping for a leg up on the hiring process. I find that they usually arrive at my desk in batches, the time and date they were received stamped on the top, and sent along whenever the executive assistant felt like it was time to get them off their desk.

Second are those from an executive who has been brought in to lend some firepower to a referral. These often arrive in e-mail from a senior-level executive, and if you start at the bottom of the e-mail chain, you see that the first note is a “Hey Charlie, remember me?” note to the executive, in which the sender forwards a resume, and asks for help in “getting it to the right person” for consideration. Typically, Charlie does not know the person being referred.

The third scenario is quite different. In this case, the executive is referring someone that they know personally, or have at least met. Sometimes there is an expectation that someone will “reach out to them” for a conversation, or (in some companies) that they will be brought in for an “exploratory” interview. Depending upon your company culture, there can be tremendous pressure to hire these referrals. I once worked for a company where the second-in-command was trying to get a job for the boy who mowed his lawn. He insisted upon accompanying the young man to any interview that he had. Imagine scheduling an interview with a 19-year-old kid for some summer help, and having one of the most powerful people in the company walk into the room along with him!

The reason for this article is that you are about to see Scenario 3 a lot! One and two are easy to manage — I typically draft a polite note to the person being referred, personalize it with their name and the executive involved, and invite the candidate to visit the careers webpage and build a profile. I then forward a copy of that e-mail to the executive involved so he or she knows that follow-up occurred.

Under normal circumstances, Scenario 3 is rare. However, the current tough economic times will make it much more common — if more people are looking for work, and there are fewer jobs, they’re more likely to use an executive connection they might have in order to give them a competitive advantage. These interactions are very tricky.

Years ago I worked in a large recruiting organization that was led by a remarkable leader. After some months, this person appeared to take an interest in my career, and I was chosen for some great developmental assignments. One day, this person approached me, and handed me a resume. It was a resume from her best friend’s son. He was finishing school, and she wanted me to “keep his resume in mind” for future openings.

While this young man was bright, his experience was in an area slightly different than what we typically hired new college grads for. To make a long story short, I eventually did find a job for him in the company. While that might sound like a success, it took time, and things were never quite the same between me and the departmental leader after that. She believed I was a promising recruiter. If that was the case, then why was it so difficult for me to find this young man a job? Clearly, her best friend’s son was a star (in her mind), so the problem must have been with me.

If that was the outcome from actually finding an executive referral a job, imagine what happens if you don’t find them a job! Managing an executive referral is time-consuming, politically risky, and rarely leaves everyone satisfied. One or two per year is a manageable volume (you probably have a resume like that on your desk right now!), but you’re certain to see many more in the coming year. The time to start planning how you’re going to handle these referrals is now.

Here are some tips to help you come away looking like a business partner, instead of the goof who can’t find the CEO’s best friend a job!

Decide Now How You Want the Process to Work and Have Conversations

Your executives may have no idea how often you receive resumes from their colleagues. Schedule time to talk about this, and let them know you’re committed to bringing great talent into the organization. Ask what they’re expectations are regarding the referral of a friend. If you have the opportunity, try to have the conversation with as many executives as possible. Make sure you know what they expect to happen.

On a related note, be sure your HR leadership is included in these conversations. For one thing, they’re an important business partner, and it’s critical that you are both on the same page. Often, the resume in question will go to an HR VP, and then to you. Make sure these referrals don’t become a game of “telephone,” with you sending a polite note while the HR VP promised that an exploratory interview would take place!

Offer Options and Recommendations

After listening to your customers, offer some possible alternatives. Do they really want exploratory interviews? Who will be on the interview schedules? What sort of expectations does that create? In other words, will it make things worse in the long run to have someone in if it turns out that simply by examining the resume it’s evident that there is probably not a place for this person? What if you agree to reach out to the person each month for a status update? What about a process for maintaining a slate of executive referrals, and reviewing their credentials against open jobs at their level? My experience has been that it’s easy for an executive to send over a resume — after all, you’re in charge of Staffing. Why can’t you just hire this person? Helping your customers understand what’s involved in finding a match, managing tight headcounts, and understanding the minutia of work authorization, competencies, and salary expectations is a worthwhile exercise.

Insist Upon Shared Accountability

How often have you received a call or a note from someone in your organization who knows a “great executive recruiter you should really be working with”? Rather often would be my guess. I suspect you’ve been asked to meet with people from executive recruiting firms to “explore ways of working together” and “discuss opportunities for them to help you with your executive hiring.” While I genuinely appreciate the chance to meet new vendor-partners I’ve not met before, often there is an expectation on both the part of the recruiter (”Susan said you’re the one who makes the decisions about executive searches”), and the person who introduced them to you (”George is a great recruiter — after all, he found me!”). Suddenly, you’ve become the person who is “not willing” to give them one of your searches!

In the same way, executive referrals can paint you as the villain. Insist upon some measure of mutual accountability from the person sending the referral. Would they be willing to hire the person into their own department? Would they be willing to network within the company at their level to locate potential opportunities for the person they are referring? Making the placement a shared effort can go a long way in building your credibility as a consultative business partner instead of someone who “finds a place to put people” for senior leaders.

Communicate What You’ve Done

Once you establish a process that everyone agrees upon, make sure you keep the executive who referred the candidate informed. As I look back to my earlier example of my department head’s best friend’s son, I don’t think anyone had any idea how many calls I made, or how many meetings I had with various hiring managers to discuss this young man’s qualifications. It might very well have looked like I didn’t do anything at all to find a job for that candidate. Once you agree to a plan, communicate your activities regularly so the executive knows what actions are being taken.

Report Back Results

Executive referrals are extraordinarily complicated. They require many hours of your time, and take some pretty sophisticated maneuvering within the organization to ensure all parties walk away satisfied. For every hour that you’re shopping a resume around the company, or meeting face-to-face with candidates, that’s an hour you’re not focusing on getting your company through these tough economic times. It’s important for your leadership (and your HR partners) to know how much time this activity requires. It’s also important for them to appreciate the return on investment it generates. If you end up spending 20% of your time on this activity, and it ultimately results in no hires, it’s critical that your customers know this. Often this leads to a mutual appreciation for the resources the activity consumes, and can lead to some new approaches for handling these referrals.

Your executives are well-networked, and can give you access to fabulous talent that you might otherwise miss out on. Executive referrals are an important mechanism for getting this great talent in the door.

This activity is time-consuming, though, and politically charged. It’s also certain to take more and more of our time in 2009. Invest some time into working with your leadership to create a plan that meets everyone’s needs, and you’ll find that this activity can actually become one of the most enjoyable parts of your day.

That alone makes the announcement news, but this is a game-changer. Even more important than the access it gives recruiters to two of the largest networks in the world, is the validation Jobvite is bringing to all those predictions about the value of social networks as a recruiting tool.

No need to point out that recruiters discovered social networks almost as soon as they came along. That’s true enough, but consider how they’ve been used for recruiting. It’s mostly been a passive exercise with Facebook and MySpace widgets enabling a company’s jobs to appear on individual pages. LinkedIn and others of its kind have been mostly a source of leads.

In the one instance, the social networks are little more than a job board in new clothes. In the latter case, it requires active recruiter time to source candidates, more targeted perhaps, but functionally not a whole different from using Google or Yahoo or other research tools. As recently as last summer Kevin Wheeler was predicting that eventually social networks “will become core to good recruiting and talent management,” though he called them “over-hyped and poorly used at the moment.”

Jobvite’s announcement today, and last week’s from Appirio, are bringing us closer to realizing as practice what Wheeler astutely saw as a trend. What the new tools from both companies do is to leverage social networks in a directed manner. Where referral programs pioneered by the likes of companies such as Jobster (site; profile) scattered job opening announcements like seeds in the wind, Jobvite and Appirio tell participating employees who among their contacts would be a best fit. Forwarding the opening is still up to the employee, but at least it won’t be an address-book dump.

So similar are the tools from the two companies that you have to wonder if it’s one of those natural evolutionary paths or someone was peeking in someone else’s window. Both also operate pretty much the same way.

Here’s how the new Jobvite tool works: A participating employee opts in to the program by logging into their Facebook or LinkedIn account (Appirio’s took works only with Facebook) using the Jobvite service. Jobvite then analyzes their Facebook friends and 1st-degree LinkedIn contacts, matching them to jobs on the basis of the skills they list, the job titles and companies in their profiles, and other relevant information. Matches are reported to the employee who chooses to forward — or not — the job opening.

This is where the Jobvite tool parts company with Appirio’s tool to go a step further. Actually, it goes many steps forward: A recipient of a job announcement who decides to forward it to their contacts can also opt-in for the matching feature. So even if you have no connection to the company that has the job opening, you can see who among your contacts is a good fit and forward it only to them. And so long as the referrals are made via the link in the email, everything is tracked so the recruiters know whence came the referral.

“In a world in which the job seeker is changing,” says Dan Finnigan, CEO of Jobvite, “It’s obvious the backend side of e-recruitment is going to change.” In this case, Jobvite’s created a sort of guided viral program that leverages the information individuals volunteer about themselves to find the best match among their employees’ contacts.

There’s plenty more to like about the new release. Interested referrals who choose to apply can use their online profiles, instead of a traditional resume. There’s also a LinkedIn widget they can use to find out who works at the company, should they have questions or want to make a direct contact. There’s also a Twitter application to send job invitations to followers and, if they have posted a Twitter profile, to offer up matches.

“People want to use their networks to do their jobs better,” Finnigan was saying as we talked about the social networking phenomenon. “The people who do that have friends and contacts who do that too and those are the people recruiters want to reach.”

Despite the tracking, Finnigan said neither Jobvite nor the employer ever learn who is in anyone’s network (except, of course, should one of them apply for the job). The way both the Facebook and LinkedIn APIs work keeps the data from flowing back. Jobvite neither stores nor retrieves data.

One interesting aspect is that the APIs these social networks make available have a value that Appirio and Jobvite and others still to come are commercializing in an important way. LinkedIn sells a recruiter service itself. So how long will it be before the network operators start to charge for this kind of access? That will depend on how well these recruiting programs pan out and especially how much more efficient they are identifying good candidates.

How good, then, are the matches? That all depends on how good the profiles are and how well designed the job description is. Jobvite’s analysis uses job titles, geography (location), education, skills and keywords. For competitive reasons, Finnigan didn’t get too specific about the algorithms Jobvite uses. But he did say the system is heuristic. “It has to learn over time,” he told us. “Suffice it to say there is a feedback loop.”

Chances are it uses fairly standard matching developed by the ATS builders as a starting point, then learns to give more or less weight to certain terms and their proximity to each other based on things like whether similar candidates in the past applied for the job and whether interviews were scheduled and possibly even if offers were made. (Jobvite is a recruitment management system that includes calendaring, CRM, ATS, and offer management.)

As Finnigan added, social networking and the kinds of tools that Jobvite is introducing, are the future of recruiting.

What makes it worth the $25,000 annual fee is how Appirio’s tool does its work. First, it pretty much runs on its own, once an employee opts in. It’s magic comes from its ability to access the employee’s friends list, analyze their job skills and experience from the profile Facebook members complete, and match them against company openings.

It’s up to the employee to pass along the opportunity and refer their Facebook friends. Interested candidates who decide to move forward can be sent to the company’s career site to apply, but all are tracked by Salesforce.

The accompanying pictures shows a Facebook page with a referral recommended by the Referral Management Solution. The page also includes sales leads, which are generated by a version of the same program that’s designed for developing sales leads and viral marketing.

Privacy, Appirio’s VP of product management and marketing Ryan Nichols told us last week when he walked us through the system, is “top of mind for us.” Neither the employer nor Appirio know who the potential matches are. They do get to know there are matches, but, says Nichols, the job data is brought to Facebook and contact information isn’t exported.

“Just sending messages to friends. That’s all it is,” he says.

What makes Appirio’s use of social connections for recruitment different from some of the other programs out there — Jobster, for example — is that it identifies connections that are a match before anyone has to lift a finger. Other referral programs tend to simply cast a wide net and hope that the right fish swim in. With the Referral Management Solution, Facebook referrals at least know their profile keywords fit the job req keywords. As is always the case, the quality of the match depends on the quality of the job description and the profile and how many keywords are matched.

Appirio’s tool works only with Salesforce, no doubt because Salesforce — and Sequoia Capital — are financing the startup. Nichols told us versions for other recruiting software are in the works.

The word “social” has many definitions, but some of the more appropriate ones are 1) pertaining to friendly companionship or relation; 2) Seeking or enjoying the companionship of others; and 3) living or disposed to live-in companionship with others rather than in isolation. The point being that people use social media as a two-way street and to get a sense of community. To belong to a community one has to have something to contribute and be accepted as a member. A community is people interacting with each other. It requires free flow of ideas and thoughts. None of that is delivered by a corporate web page, which is essentially static. People do not invite companies to be their friends. The same is true for recruiters wanting to get hires off Facebook. Creating and cultivating a network to the point where one actually has a hire can take a long time, and the ROI can be impossible or very difficult to justify. It’s not possible to say that X number of hours spent networking will result in Y number of hires and it is not a replicable model.

The Amway Model

There is a very successful and proven approach to tapping the potential of social networks. This has been around for decades before there was Facebook. Companies that operate using network marketing — such as Amway, Avon, and Mannatech — build and work their networks by providing a little structure and the messages they want delivered along with incentives to get the results they desire. They know that their networks exist and thrive where they become communities. They are not clubs where anyone can buy a membership and get the benefits. The people that succeed at network marketing emphasize the social component. The same is true of Facebook. Active members have built their networks to form communities they want to be part of. It’s a two-way street, with lots of interaction, dialog, and sharing — elements that have been true of communities since there have been communities.

Employers wanting to tap social media for talent need to recognize and respect these realities. It’s not about putting up a web page — it’s about what you have to contribute. Therefore it’s easier to tap the networks that already exist — those of employees. Employees can be encouraged to write about their employer, their experiences at work, things the company is doing that may be interesting to others, and so on. Some ERP systems now offer functionality that allows an employee to directly post jobs to their Facebook page. But this requires flexibility and giving up control over what gets put on those Facebook pages along with the job postings. Many employers are accustomed to having all communication beyond the firewall restricted to the boring drivel put out by the PR department. The idea that employees can be writing, blogging, and putting out stories about their employer without review can give many an HR manager an acute case of dyspepsia.

I had one such experience where a company I worked with was so shaken by a blog posting I wrote that was critical of someone, that they created an entirely new corporate policy requiring all employees to have everything they wanted to put on a blog, a website, or any other medium approved or risk termination. Of course, not everyone is as paranoid or PC as this bunch — they would be uncomfortable about any writing that was critical of Bin Laden, on the outside chance he’s really a nice guy who’s been framed or badly misunderstood.

Don’t Kill the Goose

Succeeding at tapping social networks as a source of talent requires participating or contributing to what makes them popular. Many recruiters have limited time to create their own networks or spend time blogging. But in either case what employees do will be far more effective and, more importantly, far more credible and therefore better received than any hype that marketing can spin about the paradise that exists inside the corporate walls. This isn’t exactly a new idea — some employers have long allowed candidates to talk to current employees without any monitoring of the conversation to get a true sense of what it’s like to work there.

Trying to control or restrict that is an exercise in futility, better described as tilting at windmills. Of course that never stopped employers and others from trying. Employers tried for years to restrict their employees’ use of the web out of the fear that they would just waste their time, before finally giving in, by which time mobile devices had made the restrictions irrelevant anyway. The same will be true of social networks — the desire to control the lives of others is deeply ingrained and anything having to do with the web seems to turbocharge it — just look at China and most of the Middle East. Of course, as all that try it have discovered — such actions result in equally forceful opposition.

By embracing social networks and encouraging employees to talk up their employers, warts and all, any employer can turn their workforce into a big referral program that will dwarf any effort the recruiting organization can manage on their own. The key is to recognize that social networks exists first and foremost for the benefit of their members — to provide them a sense of community and meet their social needs. To reiterate — the value provided by a social network is that it is social. An employer that can’t understand this simple concept should best stay away from trying to tap social media.

Fortunately, if you have the courage to shift your approach you can still produce significant results using recruiting approaches that require little or no money. I am sure you are probably thinking that the old adage “you get what you pay for” holds true, but I am sure you also realize that there are exceptions to every rule (after all, ERE.net is free!).

Over the course of my career, I have compiled hundreds of innovative steps that recruiters and line managers have taken to reach top talent when other solutions simply were not working or they didn’t have the money to fund them.

I recently put pen to paper and completed a new book entitled 1,000 Ways to Recruit Top Talent, which as the name implies, offers numerous recruiting ideas, all of which have been used successfully.

The following is a checklist of some of those ideas that require little or no budget to implement. These approaches also work during strong economic times but they are especially appropriate during a major business downturn.

I) Recruiting Tools that Use “Other People’s Time”

If you’re short on recruiting funds and on hours in the day, the best approaches to consider are those classified as “OPT” approaches that use employee time and budget resources of other departments:

1. Recruiting at professional events. Ask your firm’s employees to recruit at local and national events, trade shows, awards dinners, and seminars they are planning to attend. This is a superior approach because your employees can easily approach potential candidates as “equals” and because their time and travel expenses are already being paid by their business unit or other sponsor. The key to successful event recruiting is to develop the expectation that each employee attending such events will bring back three names of individuals who would be outstanding recruits. Encourage your executives and superstars to speak at these events, because that exposure might result in some immediate candidates, as well as improvement of your overall employment brand.
2. Social networks. Having recruiters spend endless hours building profiles on social network sites can be expensive. Instead, shift some of the responsibility to your employees because there is a high probability that your employees currently utilize one or more social networks already (Facebook, LinkedIn, MySpace, etc.) both on and off the job. Start by encouraging your employees to include in their profiles compelling facts and stories about the firm. Next, encourage them to proactively make group connections and to provide you with names of potential recruits.
3. Blogs. Recruiters can write effective blogs but it’s probably also true that many of your top employees probably already author blogs or are active participants in blogs relating to their field. If so, encourage them to talk about the positive aspects of your firm and to actively recruit on their blogs. Encourage other employees who read blogs to use them to also identify top talent.
4. Boomerangs/corporate alumni. The best way to ensure a high-quality hire who perfectly “fits” your culture is to focus on recruiting boomerangs (individuals who previously worked at your firm). During tough economic times, many of these individuals might regret their decision to leave but be hesitant to approach you about attempting to return. A simple phone call from an employee in their former department reassuring them that they would be welcomed back might be all it would take to land proven talent.
5. Videos. Videos are powerful recruiting tools because they allow you to more effectively “show the passion” at your firm. Rather than paying vendors to develop these videos, consider holding a video contest where employees throughout the firm compete to put together short, compelling videos about why your firm is a great place to work. The employees will do it on their own time and surprisingly, they may find many compelling features to display that you weren’t aware of. Post the best ones on your own corporate website or on YouTube.
6. Proactive employee referrals. Employee referrals need to be your number one focus because they shift a great deal of the recruiting “work” away from recruiters and on to your employees. Referrals produce high volume and high quality, but during tight budget times the cost of referral bonuses needs to be avoided. The best way to do that is to directly approach top performers that work in areas where you’re hiring and ask them to provide you with a handful of names of top people. Next ask them to make some contacts for you to begin the relationship recruiting process. Most employees are willing to do this work without an expectation of a referral bonus. Also consider expanding your referrals to allow referrals from customers, strategic partners, vendors, consultants, suppliers and retirees.
7. Ask past references for referrals. Individuals who served as references for previous top hires will often help out again in your search for new candidates if they were asked. Start identifying recent hires who have turned out to be exceptional. Call their references back, thank them, and then ask them who else they may know who is exceptional and could possibly be interested. Because these individuals have given good references once, it is highly likely these new names will also be of high quality. Most references are more than willing to help without an expectation of reward.
8. Traditional referral programs. During tight economic times you might need to shift away from individual referral bonuses and towards a “drawing” or lottery approach. This is where employees get a statistical opportunity to win trips, vacation time, lunch with CEO or other non-cash yet compelling prize. You can also make customers, employee’s families, suppliers and consultants that work with your firm eligible for the referral drawing program.
9. Hold a name-gathering Rolodex/PDA party. If you need help in sourcing or identifying top candidates, involve your employees who are likely to know the best and brightest in helping you put together a list of possible candidates. Rolodex parties are informal departmental or business unit meetings were top performers are brought into a conference room, given ice cream or treats and are then asked to “download” and share the names of the very best individuals that they know at other firms from their personal contacts. Those names might be stored in a Rolodex, a PDA, mobile phone, or email-based contact manager. Regardless of where the information is stored, the very best names are gathered at the party and are then targeted by recruiters to fill current and future job openings.
10. Chat rooms. Chances are that your best current employees are already active on Internet listservers, forums and chat rooms. Encourage them to talk up the firm and answer questions highlighting your best practices and technology.
11. Media coverage. Encourage managers and top employees to make themselves available to the press because the coverage can help attract candidates. Also encourage them to write articles in professional publications that highlight the firm’s best practices and technology.
12. Recruit at company events. Consider company sponsored business, PR, product and sales events to also be recruiting events, where you might be able to identify potential candidates.
13. Mentors and mentees. Mentoring relationships can be very strong. Take advantage of that by asking your employees if they are a mentor (or a mentee) of someone at another firm. If so, ask them to help you recruit the best ones.

II) Sourcing — Low-Cost Approaches for Finding the Names of Potential Candidates

If you’re looking to identify potential candidates, here are some sourcing approaches that will cost you little or nothing:

1. Ask candidates during the interview. Ask the best interviewees for the names of other good individuals they know during the interview. If you ask enough interviewees, you will get a pretty good list of top names.
2. Ask new hires during onboarding. Ask all new hires on the day they start who else is good at their former firm. Ask them to help you recruit any of the identified individuals that they know well.
3. Almost qualified – Re-look at “finalists” from previous hiring efforts for roles in a given job family to see what former candidates may now be more qualified.
4. Conduct Google searches. It’s almost impossible for anyone with any professional status to “hide” these days. Key people always have high online visibility, so identify well-known individuals by running their “Google score.” Names can be found by searching using major technical terms or job titles, along with a firm name.
5. Turned us down. Re-visit finalists who, in the past, rejected your job offers. Try a new approach and attempt to resell them. If they say no, ask them if you can contact them again later.
6. A find-you-again profile. Ask your current employees “how would I find you again?” Ask them what business and social events they attend, magazines and journals that they read, TV shows that they watch, etc. Use this information to identify the sources that are the most likely to produce results.
7. Retirees. Some retirees have second thoughts about leaving the world of work, while others are willing to work as “fill-ins,” so keep in touch with those that you might like to have return.
8. Community groups. Encourage leaders of community, service and church groups to make referrals and to let you speak at their events.
9. Contests. Technology firms like Google, Microsoft, Yahoo, and others are utilizing online technology challenges to identify the best problem solvers in the world. Finance companies are using “case contests” to identify teams of MBA graduates with the ability to rapidly apply their learning.
10. Clubs and organizations. Firms are beginning to realize that if you want risk-takers, you recruit at rock-climbing clubs. If you want people with discipline, you recruit former Marines. Several pharma organizations have begun hiring ex-cheerleaders as salespeople because of their discipline and their ability to get people’s attention. Pockets of labor usually share at least one extracurricular interest outside work. One hospital organization in Illinois found that nearly all pediatric nurses’ frequent arts and crafts supply stores regularly and began targeting crafts clubs and training classes in such venues as sources.

III) Selling Candidates — Tips on Convincing Candidates to Say Yes to an Interview or a Job Offer

1. Job descriptions. If you have a hard time getting individuals to apply, a dull job description is a common reason why. Rewrite your job descriptions to make them more like marketing pieces. Identify the WOW factors that you have and the features that excite your current employees. Put them in your job descriptions and make them compelling.
2. CEO calls. Have your firm’s CEO call top candidates directly and encourage them to sign on. CEO calls are incredibly effective.
3. Same-level calls. Many individuals make a habit of not returning recruiter calls. Instead, have someone at their professional level call them and you will get as much as a three times higher response rate. The reason for this is “professional courtesy” and the opportunity to learn.
4. Peer interviews. Many organizations have found that they get a significantly higher acceptance rate if candidates are interviewed primarily by the individuals they will work directly with. Because peers know the job, they can be more convincing and at the same time, more believable than hiring managers.
5. Side by side offer sheets. Provide your hiring managers with a single sheet that shows how your offer compares favorably with offers from competing facilities. This helps improve offer a acceptance rates.
6. Contact them on the right day. Constantly seek out information about top individuals that might “all of a sudden” be unhappy because their boss/friend just left, a merger has been announced, they didn’t get a raise, they got a bad performance appraisal or other “triggering event”. Contact them right away and close the deal.
7. Select a hiring team. Some managers just aren’t good salespeople (recruiters). Identify the employees that are good recruiters and salespeople and let them do most of the hiring. Give them recruiter training and reward them for their efforts. Because they do a lot of hiring, they will naturally be better at it than a single manager that only does hiring once or twice a year.
8. Free training. Offer top candidates you have pre-identified any vacant seats in your training classes in order to build a relationship and to assess their capabilities.
9. Involve them. Ask top individuals to help you “assess” a new idea or program, then build the relationship to the point where they know you well enough to accept an offer.
10. Sell sheet attached to your application. Attach a “sales sheet” to your hard copy application forms that highlights the best practices and features of your firm.
11. Promise them an interview. Guarantee potential recruits an interview. Consider giving them a reward (a $10 coffee card) or a free meal if they show up for an interview.

IV) College Recruiting Tips

1. Interns as on-campus reps. Ask your college interns/ part time staff to serve as recruiting representatives when they return to campus. Ask them to visit campus events and to provide you with the names of the best and what it takes to convince them.
2. Grad assistants. The grad assistants of top professors not only know the best students but they are very good at convincing them to accept your new opportunities. Officers of professional student organizations are also excellent talent scouts.
3. Use last year’s hires as sourcers/recruiters. Ask last year’s college hires to help you identify and recruit this year’s crop
4. Ask college professors. Ask college professors to be referral sources. Identify the best and begin selling them more than a year before graduation.
5. 2-years-out college hires. If you haven’t had a lot of success competing for students graduating, try re-contacting those you wanted but couldn’t get two years out of school. You might find recruiting them now is a lot easier as their preferences changed when they become more experienced.
6. CEO talks. Having senior executives speak on campus and give presentations and classes have unusually high impact on recruiting.

V) Other Miscellaneous Approaches

1. Create a hiring consortium to share costs. Consider going together with a group of similar firms to share recruiting ad and/or career-fair costs.
2. Win “best place” awards. Although it takes a major effort, winning a place on local or national “best place to work” type employer branding lists will have a dramatic impact on both the quality of your applicants and your offer acceptance rates.

Conclusion

There are literally thousands of approaches that have been used by recruiters to reach top talent. Some approaches are more mainstream and as a result have been monetized by entrepreneurs who saw an opportunity to make money.

But the majority of approaches are simple, low-cost, and wildly effective when used in the right way. What works for the manager of the local tire and lube shop probably wouldn’t work for the software startup, but there are at least 100 innovative approaches that would.

The key to being a successful and innovative recruiting leader is trial and error; not random trial and error, but educated trial and error.

Look at the characteristics of the audience you are trying to recruit and identify approaches that make sense for that population. Top talent is used to being barraged by recruiters using mainstream approaches, so when you try something different you most likely will slide right past all the barriers they have erupted!

The difficulty in getting individuals actively engaged in their industry and performing at top levels to apply increases significantly during tight economic times because even the best-of-the-best are more reluctant to leave the relative security of their current job.

If you want to overcome a candidate’s reluctance and increase your recruiting function’s “convincing capability,” consider a friends program. It can add a powerful convincing tool to your arsenal and leverage your best employees to help you sell your opportunities to hard-to-convince targeted talent.

A Groundbreaking Program

The concept was developed in the late 1990s at Cisco Systems by Michael McNeil, whom I consider to be the father of employment branding and modern marketing-based recruiting.

The program is based on the premise that everyone wishes they had “a friend” inside a firm they could call and get the real, honest scoop on the job and the firm prior to applying. When the program was first launched, it was so innovative and different that Fast Company magazine wrote about it, as did a number of other management publications.

US West, now Quest Communications, employed a similar program. The approach was one I applauded at the time because it specifically addressed the insane level of competition for top talent that firms were encountering and acknowledged the impact of providing a better candidate experience on a firm’s success rate. While the program would probably not be as effective today if it were plucked from history and implemented exactly as it was, it could very easily be modernized to be even more effective today given the advancements in person-to-person and person-to-group communication technologies.

Employees as Supplemental Recruiters

“Friends programs” are similar to employee referral programs in that they both solicit your employees’ help during segments of the recruiting process. The premise is a simple: you get a small group of targeted employees to volunteer as “recruiting boosters” to communicate directly with preselected potential or current applicants who need an extra boost to excite them. The employee agrees to communicate with them (usually on the phone) for a short, honest conversation about their job. The applicant can view the opportunity to talk directly with someone in their job as having a friend that works at the company. Also, the informal nature of the conversation with a “friend” is less threatening because it’s a conversation among colleagues or equals and is more about addressing the talent’s issues versus those of the employer.

The friends concept is powerful because it utilizes the best salespeople for convincing hard-sell individuals…top employees who currently work in the job. Current employees in the job are more convincing because they “live” the job every day. They can discuss at length how the work actually gets done as opposed to the summary the job description provides and the overly rosy characterization of the work environment recruiters push. The willingness to coordinate an honest/candid conversation makes the company more credible.

If your employees love their work, the friends program provides them with an opportunity to share their enthusiasm and the knowledge that they have about working for a great company. You might find that they have information or sales points that most recruiters and even some managers wouldn’t be aware of. By getting a group of your best employees to volunteer to assist in recruiting top candidates, you can stretch your limited recruiting resources while increasing your capability to excite potential candidates.

Key Program Design Elements for an Updated Friends Program

If you want to implement an improved version of Cisco’s “friends program” (now discontinued), there are 12 design elements to consider:

1. Focus on key jobs. Focus effort only on high-impact and hard-to-hire jobs. Only offer the option to talk to a “friend” for key jobs, so that you don’t use employee time when a recruiter can do the convincing adequately.
2. Limit participation to top-performing employees. Obviously, you want your most convincing employees to hold a “friends conversation.” As a result, there needs to be a selection process which limits employee volunteers only to the most convincing individuals who work in the targeted jobs. Selection criteria should include their performance level, their ability to communicate and excite, as well as their knowledge of the job and the company.
3. Limit applicant participation. Only offer the “friends conversation” to potential or current applicants who are highly desirable and at the same time, are also particularly hard to convince. Candidates for “friends conversations” need to be selected based on the likelihood that a one-on-one conversation would have a significant impact on their level of interest and excitement.
4. Vary the time. Withhold the “friends conversation” until the time where it can have the most impact. Normally, it is scheduled early in the recruiting process when it is needed to convince reluctant individuals to make a formal application or to convince individuals to agree to come in for an initial interview. However, the “friends conversation” can also be effective later in the recruiting process where it can be used to persuade applicants to continue on in a long, drawn-out hiring process or at the very end to convince them to accept an offer.
5. Educate employees. You shouldn’t assume that even top performing employees know how to effectively “sell” their job or the company. As a result, you should require the selected employees to review web-based educational materials and to utilize a “do’s and don’ts” checklist during their friends conversation.
6. Offer multiple communications options. Although most “friends” connections are telephone conversations, you could also give applicants or employees the option of communicating through text messages, Facebook, email, or on rare occasions, in person.
7. Limit the number of conversations. In order to ensure that employees don’t spend excessive time holding these conversations and to avoid employee burnout, the program should limit the number of conversations that any employee can hold in a given month. The time of each individual conversation should also be limited.
8. Vary by region. The cultures of certain countries can make some employees or candidates more reluctant to participate in your friends program.
9. Rewards. Employees are generally willing to voluntarily participate in a “friends program,” but consider giving them a reward. Offer a simple “thank you,” enter their name into a separate “friends” prize drawing, or offer a partial referral bonus if the candidate they contact is eventually hired.
10. Consider an assessment option. Employees who agree to hold “friends conversations” can also be asked to assess a candidate both for their skills and for their “fit”. Their assessments however should only be a part of the overall assessment process (because they are not trained assessors).
11. Feedback loop. After successfully hiring a candidate that participated in a “friends conversation,” you should ask them in a survey during on-boarding what impact it had and which elements were the most and least effective. Use this information to improve the program.
12. Complementary approaches. Additional ways to increase the number of conversations between your employees and applicants should be used as a supplement to the “friends program.” These additional approaches might include distributing referral cards, employee blogs, profiles on social networks and providing employees with “ask me about my firm” buttons to wear at professional events or when traveling. Some healthcare organizations use a related concept known as “peer interviewing,” where rather than just interviewing exclusively with managers, candidates get to interview with, and ask questions of employees that “live” the job every day.

Potential Concerns

The effectiveness of a “friends programs” can be reduced if they are too broad and unstructured. It’s also true that employees need to be educated about what they can and cannot talk about in order to protect critical company information.

In addition, some managers are concerned that their employees might add some negative comments about the job or your firm.

However, contrary to popular belief, a few negative comments could actually be a potential benefit. Why? Because any source of information that’s 100% percent “positive” is generally viewed by applicants as corporate propaganda. By including a small percentage of the negative, you actually increase the credibility of the overall message.

Final Thoughts

Recruiting managers are constantly saying they want to be more strategic. If you are among that group, the “friends program” is an opportunity to strengthen the selling and convincing components of your recruiting effort utilizing “other people’s time.”

By involving your employees, you increase their understanding of recruiting issues and you increase the likelihood that they will assume more ownership of the recruiting process. The startup costs to the recruiting function are minimal and if you design it correctly, it can produce significant results almost immediately.

Here is the final installment of our five-part series on updating your employee referral program. Today’s questions are related to specific program features mentioned during the webinar.

29. How is the Friends Program (Cisco) an employee referral program? The Friends Program, introduced by Michael McNeal in the late 1990s and no longer active at Cisco Systems, leveraged employees in a specific role to communicate with and excite possible applicants for similar roles who had indicated a potential interest in joining Cisco Systems via the corporate website, an event, etc. As with all sourcing initiatives, a well-designed ERP accomplishes three things, including finding talent; pre-assessing talent; and selling talent on the idea of working for the organization. The “friends” concept was primarily designed to support selling talent on the idea of joining Cisco, although an argument could also be made that the conversations also supported assessment. The premise of any “friends” program is that your employees are the most credible and believable salespeople when it comes to convincing candidates that a particular job is exciting. In a large organization, administering such a program can prove logistically challenging, which is why we recommend that you modify the program’s scope to cover key jobs only. You have your best employees in a targeted job family volunteer to briefly communicate with prescreened talent of interest to answer their questions and to further convince them to apply for a position, to complete the interview process, and hopefully to accept an offer. While the employees in the program may not have sourced the talent directly, they play a vital role in convincing the talent that the organization is the right choice for them, which is why the employee gets credited with a referral.

    Today there are additional ways to use your employees to help “sell” your jobs. Companies like Microsoft and Google utilize blogs as another method of allowing potential recruits to communicate directly with their employees. Asking your key employees to utilize their Facebook or LinkedIn profiles to provide information and to answer questions is another way to involve your employees in selling the company. Some healthcare organizations use a related concept known as “peer interviewing” where, rather than just talking to managers, candidates get to ask questions and talk to employees that “live” the job every day. If your employees love their work, it’s a good idea to provide them with an opportunity to share their enthusiasm and the knowledge that they have about this job (information and sales points that most recruiters and even some managers wouldn’t be aware of). If you’re concerned that your employees might add some negative comments about the job or your firm you might be surprised to learn that that is actually a benefit of any program that uses the “friends” concept. Why? Because any source of information that’s “perfect” is generally viewed as corporate propaganda and not believable. By including a small percentage of the negative factors, you increase the credibility of the overall message.

30. At what stage in the selection process is the best time to implement the “friends” program?
    Under the old Cisco program, the “friends” contact was often quite early in the recruiting process. We recommend a narrower and more targeted approach. We suggest that you have a selection process for your “friends.” Being selective in who you allow to be “friends” assures that the individual employees that are helping sell your jobs are effective and enthusiastic communicators, as well as top performers. Use these “friends” to contact the most desirable talent of interest for mission-critical and hard-to-hire jobs. By limiting the jobs and the number of contacts, you reduce the likelihood that you will waste time on mediocre talent or unimportant jobs.

31. What’s a good benchmark company regarding to Employee Referral in FMCG Supermarkets?
    Retailers specializing in fast-moving consumer goods often experience significant employee turnover, so leveraging an employee referral program to improve quality of hire and retention is a smart move. Companies with high-performing programs in this and related industries include: Domino’s Pizza, Kohls Department Stores, and Canadian Tire.

32. In the healthcare comparison example, is the $2,796 the bonus for the referral?
    During the webinar, we introduced a side-by-side sourcing channel comparison for a major healthcare system that demonstrated that even though the cost-per-hire was greater for employee referrals, the ROI was greater due to markedly better rates in offer acceptance, voluntary turnover within the first year, voluntary turnover outside year one, involuntary turnover, and on-the-job performance. The cost-per-hire values used in the example are the total cost-per-hire, which includes the employee referral bonus as well as other hiring costs and program overhead.

33. Do you think that this (source comparison) is just reflecting the healthcare industry or are the numbers representing all industries?
    Unfortunately, few companies go into that kind of detail when examining the “quality of hire,” but our research indicates that the differentials identified in the healthcare example are mild compared to some observed. Companies we deemed best-in-class back in 2007 have demonstrated that a well-designed and executed program can demonstrate significant positive impact on nearly all factors evaluated.

34. What is OPT?
    OPT stands for “other people’s time”; it’s similar to the financial concept of OPM or “other people’s money.” Under the OPT concept, the recruiting function develops recruiting approaches that utilize the time and effort of your company’s employees (both on and off the job) as a substitute or alternative to utilizing your recruiter’s time. When budgets are limited, it’s critical that recruiting “leverage” its resources to produce the most impact without spending the recruiting department’s time and money. Employee referral programs effectively shift a portion of the work normally done by recruiters to the firm’s employees. Having another department’s employees identify, assess, and help sell candidates directly benefits recruiting without having to utilize the same amount of a recruiter’s time (as most other sources would require). Having executives write and give speeches about what it’s like to work at your firm, open houses, PDA “name capturing” parties, and recruiting at product events are just some ways to take advantage of other people’s “corporate resources” to enhance recruiting.

35. I did not understand the employee video idea…please explain this point further.
    Videos are a powerful tool for effectively communicating any message. The Deloitte “film festival” concept is a simple one…why not involve your employees in identifying and capturing the exciting aspects that make your firm a wonderful place to work? By holding an internal competition or “film festival,” you can both excite and involve employees in spreading the word. In addition, your employees might find best practices and exciting aspects at your firm that even corporate HR was unaware of. Employee-generated videos are more believable because they’re not viewed by those who watch them as corporate propaganda. Videos may bring interested talent to employees, which can then build a relationship with the talent and later convert them to a referral.

36. Is there a source we can cite regarding the studies that bonus awards above 1,500 are not effective?
    The concept of diminishing returns is one that is pretty simple to bear out in your own organization using pilot studies or even simple surveys. Our research conducted in 2007 is available as an addendum to anyone purchasing the Employee Referral Program Design Guidebook or that attends an AIRS Training program designed by Dr. John Sullivan. (AIRS funded our research into world-class program design.)

37. Could you expand on what Hollister is doing with customer referral programs?
    Hollister Co. doesn’t talk a great deal about what they do, but the concept is discussed in online forums. The premise is relatively simple…people who buy the merchandise love the products, are enthusiastic about the company, and would probably be good brand ambassadors as employees. By leveraging the firms “customer loyalty” program, Hollister Co. can identify such individuals relatively easily by looking at the volume of purchases. What they purchase offers an idea of whether they would be knowledgeable salespeople; if they are fashion leaders, the concept also assumes that they are well-connected and therefore would draw customers to the store. Of course, you still have to put them through the standard assessment process. But many are likely to be thrilled to get the product discount and work at a place that produces products they love.

38. I want to see how you classify referral percentages that you showed on the beginning slides. Are you only classifying the referrals that you pay out/reward or do you also consider ones that select friend or relative option when they apply online?
    This is an interesting question. Our research did find that a significant number of applicants will indicate they know someone who works for the organization, or that they were referred, even though the employee may not agree! When we report ERP hire percentages, we are referring only to the percentage of hires formally recognized by both the employee and the referral as a referral. If your organization compensates employees for referrals, the percentage of hires for which a referral bonus was paid would be a suitable data point.

This article is the fourth in a five-part series on updating your employee referral program. Part 1, Part 2, and Part 3 are online, and the last installment will run Friday.

Questions Related to ERP Impact on Organizational Diversity

24. Some employers are paying an extra bonus for a diverse referral, but only on executive or exempt positions. How do employees perceive this? Does that make diverse non-exempt referrals seem less important? Tying ERP bonuses to the diversity of the referral is a rather rare practice, but one a growing number of organizations are considering. While we do not have data from within those organizations that are already doing it, we do have data that indicates a surprising percentage of American workers are OK with the concept. Among the 7,400 employees that took part in our user experience study, 63% were comfortable with the idea of their organization incenting diverse referrals with a diversity tied bonus. In fact, employees are overwhelming comfortable with tying ERP bonuses to a number of factors including the level of the position being referred for (79%), difficulty of position to fill (75%), and post-hire performance of the referral (58%). Based on our research showing employee comfort with the concept and the business value of a diverse workforce, diversity bonuses are a concept we support.

    Unfortunately, legal counsel frequently objects to the idea, and implementing it can require that you tackle lots of internal political issues. Fortunately, we have found that merely educating employees that you’re particularly interested in diversity candidates can have an almost as powerful as a result, without the associated issues. While the EEOC has not issued any guidance on the issue, they are aware of several major corporations that have implemented the concept and have yet to take action against them, which may or may not indicate their position on the issue!

25. How do you communicate/promote “higher rewards” for diverse referrals? How do you avoid risk with discrimination?
    Assuming that the company’s commitment to diversity is already established and communicated, most of the work is already done. Your company already spends dollars targeted on diversity events and advertising to diverse populations, so spending money on diversity referrals isn’t such a big stretch or something that could be considered illegal. You start by educating your employees how regardless of their diversity status, they frequently come across diverse professionals who have the skills and experience that your firm needs. You then explain how your current approaches aren’t always producing the best results so you are trying this new approach.

    A few firms receive arguments relating to “reverse discrimination” but as in any case, you have to weigh the risks compared to the many benefits that accrue from referral programs that focus on diversity.

Question Related to Technology to Support ERPs

26. What are the best tools for tracking or administering ERPs? When it comes to leveraging technology to support any program, the key is to find technologies that enable or automate your process or a very close approximation of it as opposed to forcing adoption of the process technology developers had in mind. Small organizations with a relatively easy process could probably get by with spreadsheets, but as program complexity and organizational size increase, so too do the needs for technical support. Most ATS systems now provide some degree of tracking and workflow to support ERPs, but their method for dealing with referral submission is not one we advise. (The majority of ATS systems publish internal job boards that employees can browse and select jobs to refer others for. When a job is selected the employee enters the person’s name, a brief message and their email address, and the system sends the referral an invitation to apply for the job. Our primary objection to this process is that it converts the referral to applicant to early in the process and fails to provide a differentiated experience to referrals compared to say a stranger applying online.)

    A growing number of companies are using contact management or CRM technologies to support their referral program. Products like PeopleClick Contact Management and Intelestream’s Perpetual Sourcing have adapted the opensource CRM solution, Sugar CRM, for use in managing pre-applicant persons of interest. One benefit of such systems in that organizations can build custom front ends to the ERP quickly and affordably, then tie specific workflows and messaging campaigns to referrals on a hyper segmented basis. Additional technology solutions that employers might consider include “trouble ticketing” solutions. Such solutions would allow employees to submit referrals using a web-based form of the employers design and attach workflow to the referrals based on criteria. Referrals for positions in specific job families could be routed to a specific recruiter, priority could be assigned to referrals for hot jobs, etc.

27. Do you recommend managing the ERP through an ATS or through a standalone program? The applicant tracking system exists to manage the workflow of applicants, so it makes sense that at some point the referral should find their way into the ATS. We just prefer that it happen later rather than sooner!
28. Do you have experience or know a client using Kenexa as a tool combined with Employee Referrals? Organizations with highly engaged workforces tend to see significantly higher ERP participation rates, so using any workplace assessment instrument or vendor to better understand employee perceptions about you as an employer is a valuable activity. Tools such as those provided by Kenexa could be used periodically to assess overall employee perceptions or on a transactional basis to assess the employee/referrals experience with the program. We have found that addressing issues that employees perceive negatively will positively impact ERP performance.

These questions are derived from a recent webinar on how to drive better understanding of world-class employee referral program practices and support continuous improvement of a sourcing channel that has become the dominant source of quality hires for many organizations.

Questions on Reward Methodologies

14. Any recommendations for paying after X number of days versus paying 50% up front and 50% after X number of days? That’s an easy one. Never ever delay payment — it’s a program killer. Try giving your kids their Christmas presents six months later in July, and see how happy they are with the idea. For rewards to have their desired impact, they must come almost immediately after the action. If you’re concerned about the turnover rate of a certain employee’s referrals, you need to realize upfront that the referring employee can do little to control the factors that impact the retention of new hires. If an employee quits within six months, blame the hiring manager (maybe you should ask them to repay the referral bonus out of their paycheck!). If a particular employee’s hires all quit, first talk to them, and if necessary, ban them from participation in the referral program. Don’t punish everyone for the errors of a few. Another innovative way to tackle this issue is to advertise a bonus lower than the bonus amount actually intended, and augment it at a later date with an additional bonus tied to other factors such as retention, new-hire performance, etc. This method rewards the employee upfront and incents their ongoing support of the referral post-hire.
15. What would your recommend for a company that has focused on the money in the past (up to $5,000), but in this economy wants to reduce the baseline referral bonus to $1,000. How do we message this without getting a negative effect? One of the few positive things about broad-scale economic turbulence is that everyone becomes conditioned by the media to expect a reaction from their employers, even if their firm is seemingly unaffected. Because employees are expecting it and understand the logic behind it, any negative effect of reducing ERP bonuses will be minimized during such turbulence naturally. However, during good times, restructuring a program around a lower bonus can result in a relatively small but vocal outcry. Most outcries don’t last that long, and the long-term impact of them is generally minimal, but if you can avoid them, it’s a good thing! Our research into employer branding program effectiveness contributed a very relevant learning with regards to this issue: if you explain why to employees they often do not cry out nearly as much! That research revealed that more often than not the outcry does not occur as a result of the change itself, but rather with the employees’ inability to devise the logic behind the change. This learning is relevant to policy changes, strategy changes, program changes, workplace environment changes, leadership changes, etc. Tough times also provide an opportunity to renew your efforts to educate your employees that they should be making referrals for their own good and for the good of the team. When business is down, and very little hiring is going on, it becomes even more critical to make those few hires really count. Because recruiting resources are also diminished, it’s time for everyone to do their part because weak referrals and weak hires mean lower performance bonuses and less job security for the entire team. Employee referrals should always be about an employee’s opportunity to work alongside a great new hire, rather than having to work with “Homer Simpson.” Make it your job to convince every employee that recruiting, much like quality control, is just too important to be left in the hands of a few individuals.
16. Would you recommend drawings based on highest number of referrals given, or based on highest number of hires from referrals? In most of the programs that leverage a drawing to award a small volume of high-value prizes as opposed to or in addition to a cash bonus, entry tickets are awarded based on the hire actually being made. Some programs also have a scaled system where the number of entry tickets is determined based on the level of positions filled, mission criticality of the positions filled, etc. By giving a reward only when a successful hire occurs, you incent the employee not just to provide you with the name, but with a high-quality name. It also encourages the employee to extend their work to include selling and convincing their candidate to accept a firm’s offer. However, the raffle approach does not preclude you from offering much smaller rewards for just referring. There are a number of firms that provide coffee gift cards, T-shirts, or other small gifts just for referring. However, we do not recommend any rewards for referrals that don’t meet the minimum job requirements or for jobs where you already have a surplus of qualified candidates. (One firm that used to award a one-pound box of chocolates for every referral found that in the weeks leading up to Christmas the number of inbound referrals quintupled. If you are going to reward the act of making a referral, make sure you counter the benefit with a self-filtering component, as mentioned earlier, to reduce the volume of unqualified referrals entering the system.)
17. What about the inverse — an increase in bonuses right now to acknowledge the tough economy? Logically, you are correct. An added advantage of a cash-bonus-based referral program is that it provides money to employees that might have just as easily gone to external search firms or vendors. It is true that when employees add up their total compensation, referral bonuses can be viewed by employees as an important addition to their disposable income. That said, it would certainly require an enlightened CFO to allow you to increase bonuses during an economic downturn.
18. Our company’s corporate culture is based on corporate social responsibility, and we are thinking about making donations to charities for directors and above who make successful referrals to the charity of their choice. Is this something other firms are doing? We applaud your approach, and yes a number of firms are doing this. Some of the other social-responsibility minded firms even allow any referral to elect to donate their bonus or a portion of it to charity. Senior executives know people also, so you want them to make referrals, but you don’t want a conflict of interest to arise. By donating any reward executives would otherwise receive to charity, you help the community and you avoid any direct cash benefit to them. They get the “feel-good” benefit, and maybe even a tax benefit.
19. Is there any correlation between large referral bonuses and more candidate referrals? Do you get more referrals with more money? There are many outstanding employee referral programs that generate both high quality candidates and a high volume of hires without offering cash rewards at all. We encourage you not to develop a referral program that focuses on the money. That said, it is certainly true that a cash bonus gets the attention of employees and it helps contribute to a buzz about the program, but there is a point at which higher bonuses begin to contribute diminishing returns. Our research as well as several other studies have indicated that bonuses in excess of $1,200 for non-exempt and $1,460 for exempt hires rarely increase the participation rate in the program to degrees that would warrant the larger bonuses. If you can get 45% of the organization to participate for $1,200, does it really make sense to get 48% to participate by raising the bonus to $4,000? The actual dollar point at which diminishing returns start to occur vary with the job, the industry, the firm, and with the economic conditions at the time. One firm that offered $8,000 found that the dollar amount was high enough to actually distract some employees from their regular jobs and incent them to focus just on referrals. In general, anything over $5,000 tends to distort normal employee behaviors and ethics, so be careful whenever you exceed that amount. The best way to identify the ideal reward amount is to start relatively low and then increase it to the point where you see diminishing returns. Another alternative is to offer a lower base reward and to offer a higher add-on bonus for mission-critical or hard-to-hire jobs.
20. Should the bonus amount be net or gross? Both approaches are used, with net being much more common. “Grossing up” the bonus means covering the taxes so that the employee ends up with the actual bonus amount. Obviously this approach increases your reward costs, but it also increases the “WOW” factor. Employees are used to receiving their net pay, so when they receive the total amount, they immediately take notice of it and often tell others about it. Programs that award real cash as opposed to a check can also have a similar impact as a memorable event.
21. Our referral program only pays when someone is hired. Is this an old-fashioned program? No, most programs reward success (hiring) rather than just effort (submitting a name). If you do reward simply providing names, it should only be a token reward.
22. Have you seen any companies use additional days off as an incentive? Yes, our research shows that about one in fifty programs use PTO as an incentive. You can offer a variety of non-monetary rewards provided that the CFO and your benefits people don’t object to them because of transactional costs and tax implications. The key is to offer something that your employees deem as “highly desirable.” Although offering employees choices increases the complexity of the program, tailoring the reward to the individual’s preferences is likely to increase its positive impact. Other non-monetary rewards to consider include lunches with the CEO, choice of scheduling, and personalized thank-you notes.
23. What is the normal “payout” structure when a referral is given? The research is relatively mixed about what firms are actually doing, revealing that roughly 40% pay out bonuses on the new-hire’s start date, 40% withhold or split the bonus into two payments, and 20% use complex payment systems we could not even begin to describe here. What is clear from the research, however, is the impact on the bonus payment terms on employee satisfaction with the program and willingness to refer again. Programs that reward the employee on or very near (within one pay period) the new-hire’s start date often have both satisfaction rates and willingness to refer again rates more than 14 percent better than firms that split or withhold payment to a later date. We advise that you pay the referral bonus on the new-hire’s first day and that you “gross up” the bonus, so that if you promise $1,000 the employee actually receives $1,000.

To drive better understanding of world-class employee referral program practices and support continuous improvement of a sourcing channel that has become the dominant source of quality hires for many organizations, we’ve assembled 38 questions raised during a recent webinar on this important topic.

This article is the second in a five-part series on updating your employee referral program. The first five questions were featured in Monday’s article, and today we continue with eight more critical topics. Look for the rest of the questions Wednesday, Thursday, and Friday.

6. How do you ensure that you are getting quality referrals and aren’t just talking with people who aren’t the top talent and may never be a fit for the company? Almost all “first generation” referral programs suffer from low-quality referrals, primarily because they are not designed to produce anything but. “Next generation” ERPs contain elements that discourage both high-volume and low-quality referrals. The four key points highlighted in response to question #5 accomplish a lot with regard to altering the system to produce a higher-quality output. Program coordinators and recruiting leaders need to understand that all sourcing initiatives are systems, and that if the systems are not producing the desired outputs, chances are it is not the concept, but rather the execution that is flawed.
7. I am a recruiter for a call center. We receive tons of referrals for friends of friends, co-worker of a sister, etc., and there is very limited detail given on the referrals, since they are complete strangers to the associate. Any advice here? This happens all the time in programs that are not formally managed with dedicated resources and where little has been done to define/articulate the employment brand inside the organization. It also used to happen a great deal in Asia and Eastern Europe where employees feel a great deal of commitment to helping out others in their community. Unfortunately, such referrals are highly undesirable and often chew up resources that could otherwise be engaged to improve the experience of high quality referrals. In addition to the methods mentioned in response to previous questions to dissuade poor referrals, you should consider implementing a formal employment branding program that develops a true employment value proposition and leverages internal communications to articulate the brand. Helping employees realize that they are part of a special group, and marketing attributes around that group, will go a long way toward empowering employees with a sense of ownership and pride in the organization that they will start to protect.
8. Does the referrer (employee) have to notify the company who they referred? Can’t they just provide their info to candidates, and leave it to the candidates to apply on the website and indicate the referrer’s name? We tried really hard to not become frustrated with this question, but we couldn’t help it. Pushing applicants to apply via the website is an action driven entirely by a motivation to reduce the administrative workload of recruiters, not one to execute a business process that produces a markedly higher quality of hire with strategic intent. It signifies a desire to treat all applicants the same — i.e., poorly. One of the worst things recruiting technology providers have done to hurt the recruiting profession is support an employee-referral model that pushes referrals to apply just as a perfect stranger walking in off the street would do. A well designed referral program leverages personal relationships to entice and woo top talent who possibly wouldn’t apply otherwise. For that reason, the role of employees in the process needs to be expanded, not minimized. In addition, eliminating employees from the process could very easily result in applicants scanning online for an employee’s name, or getting a name from someone else to insert into the application form field, even though they don’t really know the employee.
9. What level of positions should ERPs cover? The best referral programs are targeted and don’t attempt to treat every job the same. Many top-performing programs narrowed their focus to positions that fit into one of the following groups: hard-to-fill positions; mission-critical positions; and revenue-producing positions.
10. Do you recommend confirming with the employee before contacting their references for referrals? I am sensitive to those relationships. One of the specific concepts presented during the webinar was one called “reference referrals.” Implementing this concept involves contacting the references of past referrals who have proved top performers and thanking the reference for vouching for someone who has proved exceptional. Then, you ask them if they know anyone else that might be interested in several specific-yet-related roles of interest at the time. With regard to asking the employee if it is OK to contact their references again prior to doing so, it really is a matter of personal preference. One way to resolve the potential conflict is to ask references directly during all reference checks if it is OK for you the recruiter to contact them directly again in the future, should you ever have a need that they may be able to help with. Again, because the concept behind employee referral programs is one of leveraging personal relationships, it might make sense to leverage the employee to reach out to the reference, using a team approach with the recruiter.
11. I think that putting too much responsibility on the referrer will discourage them from making referrals. Keeping it simple and letting the recruiters handle the rest makes most sense to me — no? You’re right, it will discourage referrals: the ones you don’t want! Putting the responsibility on the employee helps add to their “ownership” of recruiting. You want the referral process to be a deliberate one where employees identify the very best from among many, and then critically assess them over a period of time. When employees spend little time on referrals, you will have disastrous results. You’re always looking for a balance, but in our experience, asking for “too little” work on the part of the employee has many more drawbacks than asking for “too much” work. Failing to require the employee to know the applicants’ skills and fit could triple the number of “junk” referrals which would clog the system with applicants who realistically have no chance of getting hired. There are numerous regular sourcing channels that produce a high volume of mediocre names; the referral program shouldn’t be another one!
12. How do you balance confidentiality when notifying employees of a rejection? There is a lot of fear about being sued for discrimination in the recruiting profession, even though the probability of such suits is less than that of you being struck down by lightning! By becoming an employee referral, there is an inherent belief among referrals that the employee will be involved in the process and be able to get things the applicant couldn’t get on their own, like the attention of a recruiter and honest feedback! Our end-user research revealed that more than 73% of candidates were comfortable with their referrer playing a role in their assessment. The only organizations that should be concerned with educating employees and candidates why the organization isn’t moving forward with an offer are those that have systemic discrimination issues in the first place. On a related matter, we recommend that you help those few select candidates that are highly desirable to understand why they were rejected. By honestly letting them know what they can do to improve their chances next time around, you can keep them interested in your firm. Being honest will generate more questions and a few complaints, but in my experience, the positive returns far outweigh any arguments against honesty.
13. Small or large company, is there a sound formula to calculate a budget for ERPs? Establishing the budget for an employee referral program is more a function of anticipated hiring volume versus the size of the organization. There is an article mentioned in the introduction to this Q&A on Budgeting for a World-Class Employee Referral Program that discusses the details, so we won’t go too deep into it. A general rule of thumb for programs that employ the poor referral dissuasion techniques mentioned earlier is to budget program headcount based on a requisition load three times the size of the average recruiter. In other words, if you expect your program to produce 100 referral hires per month and the average recruiter usually deals with 32 hires per month, then you will need only one dedicated program coordinator. You will also need to allocate budget for marketing communications, program infrastructure, and rewards. It is becoming more and more popular for managers to pay the referral bonus and for the referral program overhead to be absorbed by the recruiting function budget.