The Many Benefits of Social Network Recruiting: Making a Compelling Business Case

Nov 2, 2009
This article is part of a series called News & Trends.

2009DimeThumbHow do you convince cynical executives to fund a social network recruiting effort?

It’s hard to argue against the statement that social networking (i.e., Facebook, Twitter, YouTube) is an extremely hot topic in business. But I have yet to find a single CFO or senior executive willing to fully fund a comprehensive social network recruiting strategy based merely on the fact that it’s a hot concept.

Even when budget is made available, most organizations need to develop measures to help direct spending into the right efforts that will provide them with the highest recruiting impact and ROI. There is no escaping it: making a compelling business case must become a priority for social network recruiting champions.

In this article, I’ll provide an outline of the four basic business case steps covering how to secure funding during these tight economic times.

Business Case Step #1: Identify the Potential Benefits of Social Network Recruiting

Provide targeted executives with a list of potential benefits and then simply have them select the ones that (if proven) would be compelling enough to positively influence their decision. Have them eliminate benefits that, whether true or not, wouldn’t influence their decision.

With that guidance in hand, design a process that focuses on proving only those benefits that were selected as highly compelling.

The following is a list of 20 potential benefits and business impacts that can result from effective social network recruiting. They are grouped based on their general level of impact on cynical executives:

Highly Compelling Benefits

  • Hire quality — the program may result in hires who perform better on the job and have higher retention rates.
  • Candidate quality — those who frequently use social networks may be the highly desirable early adopter; this source may identify higher-quality candidates who can then be presented to hiring managers (including those who are more technically savvy and more innovative). Note: even the simple act of listing the primary source (that generated the resume) on the top corner of every resume will, over time, educate hiring managers and eventually lead them to demand that recruiting shift their emphasis toward the sources that appear most frequently on top of the resumes that end up on a hiring manager’s short list.
  • ROI — the dollar value of the program’s benefits may far exceed its cost, and the resulting ROI may be significantly higher than other recruiting programs.
  • Vacancy days — because of the high usage rates and the short response times on some social network communications channels, revenue-generating, and key positions may be filled faster, resulting in fewer costly vacancy days in key positions.
  • Higher offer acceptance rates — using social networks to attract and communicate with candidates may result in higher offer acceptance rates among finalists.
  • Hidden candidates — it may identify qualified candidates who cannot be found or successfully messaged using other sources.

Often compelling benefits

  • Employer brand — using social networks may increase your visibility and may significantly improve your “we get it” leading-edge employer brand image among targeted prospects (even if the image-building it doesn’t result in immediate applications).
  • College impact — because of the high social network usage rates among college students, it may directly impact the number and the quality of college hire and entry-level candidates.
  • Communications responsiveness — because there is less spam and in most cases you must be invited before you can send a message, using social networks to communicate may result in higher response rates and/or in more immediate responses when you send messages to prospects and candidates.
  • Message impact — messages sent over social media channels may be perceived by the receiver as being more authentic or have a higher level of credibility and believability than traditional corporate mechanisms. The relatively low cost of sending messages over social networks may also allow your firm to increase the number of messages that it can afford to send. Together, these two factors may result in more effective messages that directly increase applications.
  • Job visibility — using social networking sources may ensure that your job openings will be seen and read by a larger number of qualified candidates.
  • Candidate diversity — it may provide your firm with a higher percentage of qualified diverse candidates in managerial and professional jobs.
  • Global candidates — it may provide your firm with a high number of qualified candidates who reside outside of your headquarter’s country.
  • Cross-fertilization — the methods, tools, and approaches that are developed using social networks for recruiting may be directly transferred to other business functions like marketing, customer service, product development, etc. So these functions may find that their social networking results will be directly and measurably improved as a result of the collaboration.

Occasionally compelling benefits

  • Candidate volume — social networking sources may provide your firm with a high volume of qualified candidates.
  • Lower dropout rates — you must build relationships with your “friends” in order to maintain them as part of your social network. Fortunately, social networks make it easy to build relationships quickly. Once built, it’s not surprising that this relationship may result in more applications, but it may also lower the candidate dropout rate throughout the hiring process.
  • Competitive advantage — using social networks may provide your firm with a significant competitive advantage over other talent competitors. The net result may be that you can win more head-to-head battles with competitors over top talent.
  • Benchmarking and learning — the time that your employees spend building relationships that may lead to recruiting successful candidates may also help gather benchmark information and improve employee learning.
  • Increase sales — because using social networks directly improves your visibility and your firm’s “we get it” image, it may also influence the sales of your consumer products among those that equate product quality and being a desirable employer.
  • Cost per hire — the recruiting-related transactional costs may be lower compared to other sources.

Business Case Step # 2: Identify And Counter Additional Resistance Issues

Merely convincing decision-makers that the program has significant benefits isn’t enough on its own to get funding. Unfortunately, almost all executives have some often-powerful preconceived issues that must be successfully countered. In the case of using social networks, these roadblocks almost always include issues related to:

  • Employees “wasting” numerous work hours on social networks.
  • Protecting the release of company information and secrets.
  • Maintaining a single corporate message when you can’t control what your employees say on the Internet.
  • Privacy-related issues.

At the very least, demonstrate to the COO, CFO, CIO, PR, and the corporate counsel that their potential concerns are overblown.

Start by showing that other benchmark firms that are allowing their employees and recruiters to use social networks are realizing benefits far greater than the potential costs. Next, present external research data that shows how employees use social networks for professional purposes. While studies that determine what percentage of social network traffic is professionally versus personally relevant are rare, informal studies among organizations piloting looser controls on social network activity found between 40%-65% of activity posted during work hours was professional in nature; the majority either requesting or sharing information from/with peers.

Additionally, show skeptical managers that you have developed a formal process for identifying, countering, and burying undesirable information on the Internet. Educate them that, in a connected world, they have already lost complete control of what is said about their firm, and that strategies that involve doing nothing are tantamount to giving up entirely.

Show the naysayers examples of what’s already out there. Show them how having numerous active employees on social network sites, talking positively, will directly counter the existing negative information and actually increase the number of positive messages that people can easily access.

Business Case Step # 3: Use Logical Arguments to Gain Agreement on Some of the Remaining Benefits

After narrowing the list of potential benefits to the most impactful ones, make every attempt to get executives to accept the likelihood of some of the benefits based exclusively on logical arguments. Whether you write a report or provide a PowerPoint presentation, minimize the number of benefits you have to prove with hard data.

With social network recruiting, executives might accept your professional judgment on benefits like its effectiveness on college recruiting; the value of cross-fertilization; the availability of global candidates; and the employer branding impacts.

Business Case Step # 4 – Prove the Remaining Benefits with Data

Out of the 20 possible benefits that you started with, you are likely to have to prove the actual impact of at least five of them with data. I will outline each of the five data collection methods in the remaining bullet points. Please note that the methods are listed from the least convincing to the most convincing data collection method.

Using existing data

  • Provide benchmark data — in some cases, executives will agree that a program will likely provide the level of expected benefits based on external research data. The data might come from consulting firms or industry associations. However, the most convincing research data generally comes from either direct competitors or from firms that your executives admire. The goal is to convince executives that if, for example, using social networks at IBM reduced time to fill by 38%, a similar result could be expected at your firm.
  • Look for existing internal efforts — on occasion, especially in large firms, you will find that some group, facility, or region has already tried your new approach without corporate approval or knowledge. In the case of social networks, you would attempt to identify and then use the results produced by any “rogue” group as an indication of the benefits or results that a company-wide effort might obtain. Because the data is internal, it is more likely to be accepted than external benchmarking data.

Limited data collection required

  • Use your own employees as a baseline — assume you are trying to prove that social networks provide the capability of identifying “hidden candidates” who could be found in other sources. Start with a list of your own top performers in a particular job and then search traditional sources like job boards, attendees at professional conferences, and Google searchers to see what percentage can be located. You then do a search of their names on social network sites. By comparing the two results, you can find out whether your best employees who are “hidden” or not available on traditional sources can in fact be found on social network sites. You can use a similar approach to identify whether social networks contain more diverse candidates. You can use a third-party to see if messages to your own employees have a better response rate if they are sent via social network channels (compared to traditional voice or email).

Providing new data

  • Run a small pilot sample — in order to gather performance data to prove that a program produces certain benefits or results, it’s sometimes necessary to run a small pilot project. Pilot projects are widely used in other business areas and they have a high rate of credibility. In the case of social networks, you could suddenly allow a single recruiter to begin using social network tools and you would then attempt to identify any improvement in their performance (comparing their baseline performance to their performance after using social networking tools). You can also run a pilot on a single job to see if the baseline performance on key metrics improves. If you have the resources, you can run a pilot in a complete business unit or facility and then compare the before and after results. Unfortunately running pilot projects may require some level of approval and it will cost some money (but much less than a full-scale rollout).
  • Use a split sample — the most convincing form of proof that doesn’t require a companywide implementation is to use a split sample. It’s the same approach that is used by drug companies to convince regulators that their product is effective. For example, say you wanted to prove that social network recruiting produced higher-performing hires than traditional recruiting methods. You could start by identifying a team of recruiters who recruited exclusively for a single job family. You would randomly separate this small team of recruiters into two groups. Nothing would change for the control group, while the second group from the team would be trained how to use social network recruiting tools. They would be required to use social network recruiting as a major segment of their recruiting for all of their jobs over a six-month period. The initial on-the-job performance of their new hires after three and six months would be compared to the performance of the new hires from the recruiters in the control group. If the performance of the social network recruiter group was significantly better, you could say with a high level of credibility that using social networks improves the quality of hire. Continuing to measure the performance differential over time would provide additional data to support the program’s ability to improve the quality of hire.

Final Thoughts

Managers of recruiting functions seem to struggle continuously to obtain more budget and resources.

Most, unfortunately, rely too heavily on building relationships in order to maintain or increase their funding levels. If you’re tired of the up-and-down funding cycle, maybe it’s time to master the science of building an effective business case. It’s sad that recruiting is still struggling to prove what we already intuitively know (i.e., that recruiting top talent into key jobs has a huge dollar impact).

We have one of the largest impacts and ROIs of any function in the corporation, but we fail miserably at presenting it in such a way that a CFO would find it believable.

This article is part of a series called News & Trends.
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