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Recruiters Cite Referrals as Top Hiring Tool

November 10, 2006
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A recently released study gives new insight into how company recruiters perceive various methods for finding talent. And as other studies have shown, it comes down to who you know. Or, more precisely, who employees know.

Seventy-five percent of survey participants said employee referral programs are effective or very effective tools, according to the survey conducted by ERE Media, an online forum and source of information for recruiters, and consulting firm Classified Intelligence. The survey, released in September, includes feedback from 343 respondents across a wide range of industries and company sizes.

Currently, less than one-third of hires actually come from employee referrals. However, more than 50 percent of respondents say they will increase spending on referral programs to further tap into the benefits the programs offer as recruitment tools.

Classified Intelligence founding principal Peter Zollman says employee referral programs are highly regarded because, relative to other recruitment methods, they are fairly inexpensive. Furthermore, the quality of candidates they yield tends to be high, he explains.

While referral programs appear to be a favored recruitment tool, print ads are at the other end of the spectrum. Almost 60 percent of the survey’s participants rated print ineffective or very ineffective.

The reviews on career fairs weren’t quite as scathing. Some respondents believe they do not provide good value, while others consider career fairs a good tool for branding. The latter group also says career fairs are handy when it comes to filling large numbers of job vacancies in a short period of time.

Job boards received overall positive marks, ranking second among recruitment tools. About 50 percent of study participants say they are effective or very effective tools for recruitment.

Information from the report suggests that reliance on electronic recruitment tools is here to stay. Ninety-eight percent of the study’s participants say they use job boards. Some participants say more than half of their hires were found through job sites. Ninety percent of the study’s participants say they have developed corporate career sites.

Although the feedback about job boards was generally positive, there’s room for improvement within the industry, the survey reveals. Niche sites and job boards are regarded favorably, but the jury is still out on the recruiting effectiveness of social networking sites. This category includes both business-oriented networking sites like LinkedIn and purely social sites such as MySpace. More than 40 percent of respondents say they use social networking sites to recruit employees, yet the majority of that group spend less than $25,000 annually on this recruitment method.

The survey’s respondents gave diversity sites poor marks. Zollman says it’s the only category in the study that received no votes for being "very effective" as a recruitment tool. Zollman believes diversity sites are in a tough position. "Candidates that bring diversity to the table don’t want to label themselves as minorities," he says. "They just want to be considered another regular candidate."

Gina Ruiz

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