December 7, 2011 I'M Applying, Job Search, Recruiting

How many times have you gotten a phone call from a headhunter, when you weren’t even looking for job; or the job that he pitched was totally off-base to anything you would be interested in?

How many times has that happened to you?

If you received one of those call from me; I was simply engaging in referral marketing.

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 20 years of direct recruiting, I can honestly say that more than 90% of the individuals whom I’ve placed have been through referrals.  A referral occurs when a person (referrer) says to me:

  1. Steve Stunning over at Mercer might be interested, here’s his number!
  2. Dan Dashing over at Aon is the one that comes to mind; you can give him a call but don’t use my name!
  3. Big Bill Hill over at Towers may know someone; you can use my name when you call him!

In this case the (referrer) is most likely someone I’ve placed previously; maybe it’s a client, or someone with whom I’ve had a numerous conversations.  And interestingly, most of my candidates were placed with hiring managers that I also placed at some point in their careers.  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 get more job offers; which is what recruiting is all about. Here are two reasons why:

  1. During the recruitment process, it’s easier to build rapport and develop a trustful advisory relationship with candidates when they value the referrer’s opinion.
  2. The candidates’ skill-set is matched to the job by a peer. This type of dead reckoning match is more on-target than a computer-programmed to search for key words on a resume.

The ability to generate referrals is the difference between success and failure for a headhunter, so one has to be proficient at developing relationships with complete strangers!

Something 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’ bill 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 came into existence. LinkedIn provides a way for the recruiters in the 80% group to gain access to the same people that the recruiters in the 20% group are obtaining as referrals. For a price, LinkedIn allows everyone to easily find the same candidates-but the ability to develop relationships with the social networking generated candidates remains the biggest challenge to anyone unskilled in relationship building.

On another front, recruitment vendors are offering directly to consulting firms, the perfect social recruitment solution that will automate the referral process and at the same time build a talent community to fill jobs faster and cheaper. I laugh because the good recruiters 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 real 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 with technology is that you must begin with an existing talent community; and most do not have a talent community. You cannot build and simultaneously engage with a talent community; it’s like eating a delicious meal while you are preparing it at the same time. To be effective, you must build the talent community first, and you have to build it the old fashion way-by referrals; and that takes time.

Utilizing current employees as a talent community is certainly a step in the right direction; however this strategy is more suited for the larger employers as they have the brand name to attract talent and the critical mass to implement this strategy.

That’s a different story for the middle market consulting firms; they don’t have the time, the brand name or the volume of employees to implement such a program. But they can effectively compete with the big boys for those nuggets of golden referrals by leveraging A.W, Forrester Co’s existing talent community in the clouds. It took 20 years to build, and you can play a role in the automation process by earning cash for your referrals.