Turn Those Referral Frowns Upside Down

Turn Those Referral Frowns Upside Down

“So, when you’re hiring, you’re hiring from a really big pool of angry people on lower wages. Good luck.”—Henry Oliver, Head of Planning, AIA Worldwide (TMP Worldwide), when presenting a the recent 2017 Talent Board EMEA CandE Awards Gala.

I’m such a hopeful, overly-optimistic person. And I’m proud of that, too. In a world that seems to be celebrating brash and boastful cynicism more than ever over empowering with positive progress, it’s not a bad place to be.

However, I have to be very careful about the economic realities of today and where we’re really at with the world of work. For example, the last U.S. jobs report for February 2018 looked really strong, adding over 300,000 jobs, especially with such low unemployment at 4.1 percent. I thought it was great – a 17-year low.

And yet, wages are still pretty flat, with only a 0.1 percent increase in hourly earnings overall, and plus, you’ve still got lots of underemployed people who probably are still taking part-time work and contract work – multiple jobs even – to make ends meet.

So, I read the above quote again from Henry Oliver and thought about the short-term and long-term impact of the negative foundation that’s already embedded into most recruiting strategy and tactics.

Most job candidates don’t get the job at the end of the day, even if you’re hiring multiple individuals for the same hourly, part-time or contract jobs. It’s already an uphill battle to improve the customer service of candidate experience.

Last year there were 300 employers and over 220,000 job seekers from around the world that made up the 2017 Talent Board benchmark research class. Talent Board has released its benchmark research from North America, EMEA and APAC (select your region and download the reports here).

Of the over 220,000 candidates who participate in our global research, only about 15 percent were hired, so it’s safe to say that the population is fairly representative of the real world – those who don’t get the “job” at the end of the day.

And we’re talking about all kinds of jobs – from contract to hourly to salaried to management. Whether or not they decide to apply again, refer others or make purchases if and when applicable at any particular employer is always based on their individual experiences of applying for and going through any particular employer’s recruiting and hiring process.

What about referrals? Employers understand how important these are to their hiring, their brand and their business bottom line. Even candidates are leaning on referrals more than ever, citing that they’re now over 50 percent more important to them than they were in 2016.

Are there differences of how extremely likely candidates would refer employers they’ve applied to across job types, regardless of whether or not they were hired? Each year we ask candidates how likely they are to refer others based on a four-point scale: extremely likely, likely, not likely and definitely not. When we do our competitive analysis to determine which companies have the highest positive candidate ratings we look at the definitive anchor answers of “extremely likely” and “definitely not”.

Let’s see what it looks like in North America. First, let’s look at how likely all candidates were extremely likely to refer others based on their overall experience (see Figure 1). Although the contract candidates in our research had the fewest responses overall compared to the other job types, they did beat out all the other job types on being extremely likely to refer others.

Figure 1. How Extremely Likely Are All Candidates to Refer Others by Job Type

What if they were employed by the company in some capacity already when they completed our survey? Well, see Figure 2. Contract candidates who were employees still beat out all other job types on being more likely to refer others. Referrals are also higher overall for those who were already employees versus all candidates.

Figure 2. How Extremely Likely Are Candidates Who Were Employees to Refer Others by Job Type

What’s the why of all this? First, based on our experience working with employers around the world, contract work tends to be less complex in the recruiting and hiring equation for employers to solve for versus full-time employees and management. In fact, procurement is still more responsible for “hiring” contractors than traditional recruiting and human resources, treated as a “vendor” not an employee.

There also tends to be more flexibility and fluidity doing contract “gig” work that you don’t get being full-time. Sometimes it’s the choice of the job seeker, wanting a job they can dial up and down as needed; and sometimes it’s a matter of keeping a roof overhead and keeping food on the table, especially when they’re not being hired full-time. Anyone who’s been a contractor trying to make a living knows that it’s feast or famine much of the time.

And here’s the key: perhaps contractors are more likely to refer than other job types, specifically because their very livelihood is so dependent on constant referral business. It’s a highly reciprocal exchange. Again, as was referenced earlier, all candidates are leaning on referrals more than ever, and for contractors, 41 percent find referrals one of the most important research channels for them, second to career sites, compared to all candidates that find referrals an important research channel 35 percent of the time.

And considering that the contingent workforce represents anywhere from around 20 percent to 35 percent of today’s workforce, there’s obviously a business value to companies because of similar flexibility and fluidity based on demand, and of course the cost savings of not having to offer employee benefits.

There are also progressive organizations that not only improve their recruiting processes and their candidate experience year after year, they take a total talent approach to recruiting and hiring, looking at both contract and full-time populations to source from for any and all positions.

They are the ones that turn those referral frowns upside down.

In the future, Talent Board will expand its research to cover more of the contingent workforce candidate experience and its impact on employers around the world. As we do so, we’ll better understand the combinations of recruiting and hiring by job type, company size, industry, gender, generation and the list goes on and on.

Talent Board is first non-profit organization to be focused on the elevation and promotion of a quality candidate experience with data benchmark research. Its signature candidate experience research report covers the best practices, platforms and processes that enable companies to provide an exemplary recruiting experience to their job candidates, from pre-application to onboarding.

The Talent Board Candidate Experience 2017 research reports for all regions are available now (pick your region and download) and based over 220,000 candidate responses who applied to positions at 300 companies, again most of whom did not get the job. Through these candidate surveys, Talent Board discerned the current state of candidate experience, as well as the tools, processes and technologies employers today use in their recruiting practices, and how they contribute to the candidate experience.

Employers around the world interested in participating in the 2018 Talent Board Candidate Experience Awards benchmark research program can now register here as of March 2018.

The deadline to complete both the employer and candidate surveys is a few months away, but the time to start is now!

Kevin W. Grossman, President of Global Programs, Talent Board.

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  • Gary Hughes

    The increased hiring in some industries means busier recruiting teams and the need for additional resources such as investment in recruitment tech that addresses organisations' specific pain points.

  • Liam McKessy

    Walmart and Target have increased their minimum wage to attract and retain entry-level talent.

  • Sean Wilkie

    More companies are starting to pay attention that a great candidate experience is an important differentiator.

  • Yvette Kroot

    Machine learning is paving the way for the removal of bias. It works efficiently in delivering the best candidate matches based on their skills.

  • Keith Murphy

    A positive candidate experience is synonymous with good employer branding.

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Kevin W. Grossman

Talent Acquisition Expert

Kevin W. Grossman is the Talent Board president of global programs responsible for all aspects of the Candidate Experience Awards worldwide, the first nonprofit research organisation focused on the elevation and promotion of a quality candidate experience. He also produces and hosts multiple “world of work” podcasts including The CandEs Shop Talk and WorkingTech. A certified Talent Acquisition Strategist (TAS) and Human Capital Strategist (HCS) by HCI, Kevin has over 19 years of domain expertise in the human resource and talent acquisition industry.

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