Wikipedia defines referral marketing as a method of promoting products or services to new customers through referrals, usually word of mouth. Such referrals often happen spontaneously but businesses can influence this through appropriate strategies.
In over 20 years of direct recruiting, more than 90% of the individuals that I’ve recruited/placed were the result of a referral. A referral occurs when a person (referrer) says to me:
In this case the (referrer) is most likely someone I’ve previously recruited; maybe it’s a client, or someone with whom I’ve had a numerous conversations. And interestingly, most of the individuals I’ve recruited were placed with hiring managers that I also recruited at some point in their career.
Recruiting from my perspective is basically introducing a friend to another friend; so you might say that a headhunter is also a professional referrer.
Make no mistake, I’ve made my share of cold calls just like everyone else; but very rarely a placement was the direct result of a cold call. I view cold calls simply as a strategy to develop relationship with someone that can potentially lead me to a referral.
It has also been my experience that referred candidates gets more job offers; and that’s what the game of headhunting is all about. Here are two reasons why:
The ability to generate referrals personally is the difference between success and failure, so a headhunter has to be proficient in developing relationships with complete strangers to be effective in recruiting the top talent.
Something else you may not know is that the 80/20 rules also applies to recruiting. (80% of recruiters generate 20% of the placements and 20% of the recruiters’ produce 80% of the total placements) The recruiters in the 20% group get more returned telephone calls, they get more unsolicited telephone inquiries from clients/candidates; they get more referrals opportunities.
That is why social networking sites like LinkedIn is so popular with most recruiters. LinkedIn provides a quick & easy way for the recruiters in the 80% group to gain access to the same people that the recruiters in the 20% group have obtained as referrals. For a price, LinkedIn allows everyone to easily find the same candidates-but the ability to develop relationships with the social network generated candidates remains the biggest challenge to anyone unskilled in relationship building.
On another front, recruitment vendors are selling to employers, the perfect social recruitment solution that will build a talent community to fill jobs faster and cheaper. I laugh, because the good headhunters know that you first need to develop a relationship to build trust; trust has to be earned and nothing good happens overnight. What this means is that technology by itself will not generate referrals because computer software cannot develop meaningful relationships with humans.
I am not saying that referrals cannot be automated, what I am saying is that only recruiters who are skilled in relationship building can effectively leverage technology to generate referrals.
The reason why it is difficult to generate referrals using social media, it is because you must start with your own existing talent network; and most do not have an existing talent network. You cannot build and simultaneously engage with that talent community; it’s like preparing a delicious meal and eating it at the same time. To be effective, you must build the talent network first, and you have to build it the old fashion way-through referrals.
Utilizing current employees as a talent community is certainly a step in the right direction; however this strategy is more suited for the Global employers as they have the brand name to attract talent and the critical mass to implement this strategy.
That’s a totally different story for the smaller employers; the ones that don’t have the time, the brand name or the volume of employees to implement such a program. But seriously, they can effectively compete on a level playing field with the National firms-if they successfully recruit the right talent from those nuggets of golden referrals-leveraged from organic talent networks-developed by the same headhunters they are trying to ignore.
Here’s the reality-to win-you have to work hard. And at the end of the day, the stronger firms employ the best talent. The firms with the best talent win and retain more customers. The firms that win more business use headhunters as their primary weapon to recruit the best talent. And good headhunters utilize relationships and referrals as their primary tools to recruit the best talent. Nothing good comes easy, so don’t let them fool you!