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Social Referrals Save Companies Time and Money

Recruiters across industries know that referrals generally deliver the best candidates, and now thanks to social media sites, they are cheaper and easier to find.

November 5, 2012

If you are recruiting for one of the hot tech companies in Silicon Valley, chances are you are looking to your employees to find the best candidates.

"Up to 50 percent of all the employees these companies hire are through referrals," says Valerie Frederickson, CEO of Valerie Frederickson & Co., an information technology recruiting firm in Menlo Park, California, in the heart of Silicon Valley. "Good referrals are worth their weight in gold."

Silicon Valley isn't alone. One-third of recruiters say being referred by a friend or colleague sets a candidate apart, according to a survey of 1,500 global recruiters by Bullhorn, a software recruiting company.

Recruiters across industries know that referrals generally deliver the best candidates, and now thanks to social media sites, they are cheaper and easier to find.

"Referrals are the highest-rated source of new hires," says Dan Finnigan, CEO of Jobvite Inc., a social recruiting company based in Burlingame, California. "If your objective is to hire the highest-quality people as quickly as possible and to spend as little as possible, referrals are the way to do it," he says.

But getting great referrals is not as simple as sending an email to employees and asking for suggestions. The best companies take advantage of social media sites to talk about the corporate culture as well as the jobs, and they make it as easy as possible for employees to share opportunities across their network.

Fresh & Easy Neighborhood Market Inc., a West Coast grocer with 5,000 employees, sends weekly updates to its employees about new job openings. It actively promotes its career opportunities on Facebook, Flickr, LinkedIn, Pinterest and Twitter to make sure employees and their followers are aware of the latest openings.

All of the postings link back to the company's career page, which features Q&As with employees, company blogs, and fun facts about the workplace along with job listings. There is also a link to Fresh & Easy's YouTube career channel, where job seekers can find training content, interview tips and employee videos, including one titled "Why We Love Working at Fresh & Easy."

"We have such a unique workplace culture, but you don't see it until you start working here," says Emma Weare, Fresh & Easy's recruitment and systems director. She believes the career site and YouTube channel give potential employees a sense of the workplace environment so they are better informed before they apply.

Social media sites have become a vital tool for recruiters who want to tap into the broader networks of their employees and to home in on higher-quality candidate pools.

According to a survey by Dimensional Research and SuccessFactors Inc., social media and mobile devices are being used by 39 percent of HR leaders to communicate with job candidates. Similarly, PricewaterhouseCoopers' 2012 Business Insights Survey of Canadian companies, showed 34 percent plan to use social media for recruiting because it allows them to take a targeted approach to finding the right talent and speaks directly to younger workers.

Companies like Fresh & Easy are already seeing measurable benefits from their investment in social recruiting and referrals, both in the quality and cost of their new hires. According to Jobvite's 2012 Social Recruiting Survey, 43 percent of respondents said the quality of applicants has improved thanks to social recruiting, and 20 percent said it takes less time to hire.

It also costs less to hire an employee through social recruiting compared with more traditional recruiting methods because companies require fewer recruiters and less advertising, and they can tap into higher-quality candidate pools, Finnigan says.

At Fresh & Easy, social media has enabled the HR team to manage all recruiting internally, even as the company grows, and they spend no money on agencies or career sites. "The great benefit of social media for recruiting is that it's free," Weare says, "And it gives you a great way to creatively build your brand."

Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.