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A Controversial New Strategy for Employee Referrals

October 22, 2004
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Related Topics: Internet, Candidate Sourcing, Featured Article, Staffing Management
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Clickability used to add new hires to its staff the old-fashioned way: by asking for referrals from employees, board members and business partners. One by one, associates of the privately held San Francisco Web-publishing company would comb through their address books in search of friends and colleagues they might recommend for hiring.

    But when two positions recently opened up at Clickability, CEO John Girard decided to try a different method of gathering employee referrals. Instead of asking his staff for their contacts, Girard plans to use a cutting-edge software program made by Visible Path, a New York company that specializes in social-network analysis.

    With the click of a button, Clickability hiring managers or recruiters can now search the company e-mail system--such as Microsoft Outlook--identifying who knows who and how strong their connections are. The company can even select competitors that it might like to hire from, then bring to light connections between employees there and existing Clickability staff and partners.

    "It’s obvious to us that we get our best hires through recommendations," says Girard, noting that roughly 30 percent to 40 percent of the company’s new hires come from referrals from the company’s employees, contractors or others tied to the firm. "But getting that information was immensely time-consuming. Our system was old-fashioned in a high-tech way. Basically, it was one step above using a manual mailing list and licking stamps. If we can short-circuit that and identify new people using Visible Path software, that would be pretty valuable for us."

Who do you know at Cisco?
    Welcome to the brave new world of social-networking technology, where Friendster meets the hiring process. Visible Path’s software conducts a split-second examination of how and with whom a company’s employees are interacting, then boils down that interaction to a single numerical value, which is displayed visually.

    If Clickability had its eye on people currently working at Cisco, for example, the Visible Path software would search for any connections between the two companies, calculating e-mails that have been sent and received, and giving added weight to e-mails that generate a response. Names that appear in the BCC, or blind carbon copy, line of an e-mail are weighted even more heavily. "If a name shows up in the BCC line, that indicates somebody that you place trust in--you’re willing to share information," says Girard.

    While the jury is still out on whethersocial-networking software will be the hiring trend of the 21st century--or even whether it will be the source of Clickability’s next two hires--Girard and his company have high hopes that Visible Path will reshape their hiring process.

    Their optimism isn’t entirely without merit. The company got the idea for using Visible Path to churn up potential employees because it was already using it to identify potential sales connections. "We teamed up with Visible Path in the first place because we wanted to expand our software business," says Girard, noting that Clickability already provides Web publishing services to the Wall Street Journal, CNN, Time and Popular Mechanics. "This was a way to identify connections in other companies that might have value for us."

    Of course, there’s the matter of what employees think about having their in-boxes opened for an experiment in social networking. Girard notes that the automated search process is very tightly controlled, mapping relationships solely on the basis of who is sending and receiving e-mail. The subject and content of the messages are disregarded, and employees have the option of excluding their personal e-mail from the search. "Visible Path takes privacy very seriously," he says. "The only thing you ever know is very basic contact information: who the person is, the company they’re involved in and what their title is."

    While the technology allows for word searches--more intrusive examinations of what employees are telling their connections--Girard maintains that to conduct them would ultimately undermine the experiment. "This only works if you have the highest level of participation."

    Still, it’s not hard to see how even a tightly scripted search could generate information that an employee might not want known. Say, for example, that a Clickability employee has been communicating with someone at Cisco about taking a position there. Wouldn’t the exposure of a strong path, as social-networkers refer to these mapped relationships, prove somewhat embarrassing?

    Girard concedes that Visible Path could turn up such communications, but notes that the employee has the option of excluding sensitive contacts from the search. "Of course, if someone were doing something like that via their Clickability e-mail, it would all be on our server anyway," he says.

The cost of not doing it
    Girard has been a fan of social networking since the technology burst onto the scene in 2002 in the form ofFriendster and other entertainment Web sites allowing people to explore their connections. But he says that Visible Path is the first use of such technology that actually works in a business context. "It’s fun to go online and see who all your connections are, but it doesn’t help you get your work done."

    As for going back to the old-fashioned method of searching for new employees, Girard says he’s through with it; having his staff search their contacts takes too long, and relying on recruiters puts too much power in the hands of a single person. He’s betting instead on new technology to find a few good recruits for him, insisting that a single good hire will make Clickability’s deal with Visible Path, which he estimates costs approximately $100 per employee, a profitable one.

    "Would I rather pay $100, or ask my top sales guy to stop selling for 20 hours a year [to do] a five-hour comb through his Outlook contacts once a quarter?" he asks. "It’s a no-brainer. The real question for me is what would it cost us not to use Visible Path."

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