Talented people are valued not just for their skills, experience and expertise, but also for their networks. Often, the adage ‘good people know other good people’ is true (see slide 11).
Referral programs in different forms has been in place to attract and recruit talent for a long time. The recruitment industry, in particular, thrives largely on networking and referrals. Lately, we have seen lots of variations in how candidates are compensated for their time (paying candidates to attend interviews) and networks (recommend and be rewarded), and the trend is gaining grounds.
We explored the referral space in greater depth by talking to Riges Younan CEO of 2Vouch, an online networking and referral service provider. Riges, highlights where 2Vouch sits in the talent recruitment landscape, and tells us “2Vouch is to recruiting what eTrade is to full-service stockbroking”. Read more below….
Q. Firstly, can you shed some light on your background and professional journey so far. How did 2vouch came about?
RY: I’m one of those crazy career recruiters, I’ve been in the industry for over a decade and in that time I’ve been fortunate enough to be involved in building businesses in Sydney, Melbourne, New York and London. This global experience has taught me a lesson that seems to be universal – referrals are the best source of talent. Over the years I’ve spent a lot of time with companies devising proactive candidate sourcing strategies and one thing that always seemed to be lacking is their ability to leverage of their own employees social and professional networks to find people.
Most companies have informal internal employee referral programs and most professionals have received calls asking, “Hey, I’m trying to find a person for this job, do you know anyone?”. However, the process, technology and tracking of those referrals, were ad hoc and inefficient and the person being asked for the referral often received no feedback on how it went or any form of reward.
The other thing that I have seen personally and also heard from many other recruiters and hiring managers is that existing approaches such as classifieds (job boards, newspapers, etc) and conventional recruiting are becoming less effective. At the same time, social media is changing the way we approach networking and interaction. So we decided to help solve the problem of sourcing people in talent-short industries (like IT, Online, engineering, etc) by building a web based system that uses referrals, social networks and rewards to bring employers together with great candidates faster and cheaper. That’s how 2Vouch was born!
Q. What value does 2vouch brings to the talent acquisition game? In other words, why must companies use 2vouch?
RY: The key promise of 2Vouch is to help companies find great people cheaper and faster by using referrals. Most recruiter’s charge 15-20% for a placement, the typical cost for finding someone through 2Vouch less than 4% – it’s free to advertise and companies pay nothing unless they hire someone (and get a 110% money back guarantee if the person doesn’t work out). So as the economy tightens and companies get more cost conscious, it is really a no risk proposition that they should try filling their jobs on 2Vouch before engaging a 3rd party agency.
It is well known that referrals are the best source of talent. We have built a web-based platform that automates, tracks and rewards a process that has been happening offline for decades. The 2Vouch JobGenie referral-recruiting engine gives companies the ability to leverage the social and professional contacts of a network of referrers and gain access to a talent pool of candidates that historically have been hard to reach.
They can even request referrals from their own network and get a 50% discount if one of those people makes the successful referral.
The quality of the people hired through 2Vouch is likely to be high, too, since referrals have been shown to produce great employees who stay longer, fit to the culture and perform better.
So what we have done is build a platform that brings together the best parts of a traditional contingency based recruiter which is the pay for performance model, the leverage and reach of the online social networks and the automation of the traditional job boards.
Finally, as unemployment rises and there are more active candidates hunting fewer jobs on the traditional job boards, the volume of irrelevant applications that will have to be sorted will rise, causing delays and cost increases. In a market with increased active candidates, referrals become more valuable as a filtering mechanism, so our customers will receive fewer applications but those applications will be higher quality with greater relevance.
Q. Referrals in some forms has been around for a long time, how does the web change the status quo? Can you give us a successful case involving 2vouch?
RY: The web, especially Web 2.0 and systems such as social networks provide referrals with far greater reach, scale and measurability. There are broader forms of interaction available through social media, social networks such as LinkedIn and, of course dedicated referral systems like 2Vouch.
So, whereas previously and employer or recruiter may have made a limited number of calls to people in their rolodex, the web and these tools allow them to seek referrals from a much wider professional base.
Since our beta launch on 1 September, our focus for the remainder of this year is to make sure the referral platform functions they way we want it to and ensure a good user experience. However, whilst doing that we have seen a steady uptake of referrers and advertisers and increased referral activity starting on the system, but we are yet to make a placement.
Q. Candidates are increasingly compensated for their personal networks and time. For instance, candidates are offered money to be interviewed, rewarded with a referral fee etc, do you think this is a growing or even healthy trend?
RY: Professionals are busy and their network is very valuable, so it makes perfect sense to reward them for taking the time to make job referrals into their network. If individual referrers don’t feel they want to take the cash, we make it easy to donate the reward (or some percentage of it) to one of our charity partners – such a The Heart Foundation, Sids & Kids and The Breast Cancer Network, to name just a few.
Also, people understand that their reputation is a critical personal asset – if you like it is the check and balance – so people will not want to damage their reputation by being seen to spam their network purely to make a dollar.
My view is that the short supply of highly skilled and professional talent is a long term demographics based problem. Not even a downturn such as we are experiencing now will dramatically impact the supply and demand imbalance that we have in certain industries such Tech, Digital, ICT and Engineering. So, using job referral platforms and other innovative proactive sourcing strategies will be integral to companies being competitive on the talent front.
Q. In your opinion are referrals a threat to the job board industry or even recruitment agencies. Do you think you are intruding on anyone’s space? How big is the market for online referrals?
RY: Referrals take the job boards to the next level. So we see job boards as partners not competitors, in fact, we have just a signed a partnership deal with a job board that we will be making public very soon. What we are doing for this partner is powering the referral component of their job listings. This gives their customers’ jobs wide distribution through social networks like Facebook and Twitter .
As companies become more cost conscious, many will not want to use a full service recruiter, particularly if they have some HR capability internally. So we see these companies as regular users of 2Vouch.
2Vouch is to recruiting what eTrade is to full-service stockbroking. We see recruiting in the future being delivered in a bundle of services – where you can choose to take all or only the components you need like talent sourcing, telephone screening, interviewing, reference checking, offer negotiation, name generation etc. What 2Vouch does is introduce a new way for companies to leverage their employee’s social networks to source talent directly.
Third party recruiting agencies will always have a place as they provide critical parts in the recruiting workflow that technology will never replace. Recruiting is all about personal relationships and good recruiters invest in their networks and build relationships that will endure
As far as the size of the market is concerned we are playing in a global recruiting market worth $100 billion annually and our vision is to provide highly quality and relevant referrals to every professional job vacancy in the world. Yep, BIG vision – so we have some work to do but are very excited about the journey.
Riges can be reached at email@example.com