In hiring, a Friend in need is a prospect, indeed 

Final Article Assignement – Etienne Vandenbroucke L1 Inter-Eco

« In hiring, a Friend in need is a prospect, indeed » The New York Times   24/3/2014

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The company has different sources to recruit its new employees. There is the recruitment from within and external hiring. The recruitment and selection process is very long and can cost a lot. But some entreprises like Ernst & Young use their own employees to find new hires, in order to save time and money. We call referrals the employees hired in a company after having been referred by employees of the company.

Two new trends in hiring are becoming dominant these years.  
There is the trend of the e-recruiting with the increase of the use of Linkedin by both employers and employees, becoming more famous than Monster.com

This use of networks, in order to bypass high recruitment costs, is simple and quick. A website like Linkedin, and socialmedia in general, changes the lanscape of the recruitment and selection process.
And secondly there is the trend of referral recuitment, which we will develop in this assignement.

                       To begin with, in the « race » to quick and cheap recruitment, employers ask more and more their employees to find new hires. Referrals are trendy today in recruitment and selection process. For exemple E&Y (Ernst&Young) recruited 45% of its employees from referrals in 2014, lower than Deloitte with a score of 49% for its hires.  
There are a few positive aspects of hiring a referral : referrals are faster to hire and they are 15% less likely to quit the company owing to a Federal Reserve Bank study. A referred candidate is cheaper to hire than a traditional candidate. A referred hire will onboard faster than a traditional hire. Finally, an employee who successfully referred a candidate will stay at their company longer than a traditional employee.

Futhermore, there are a few positive aspects of applying when we are referrals, such as getting fast tracked, being on the top of the pile, having 40% better chance of being hired during an interview. Referrals are sometimes without connections to the professional life such as long term unemployed people. These people got lost in the huge system of application today with lots of different ways to apply (different sources of recruitment) : monster.com (and other e-recruiting websites), employement agencies, ads in news paper, university job datings... They (unemployed people) have less connections with social medias so employment from LinKedin or other websites is more difficult. Giorgio Topa says that long term unemployment « is a waste in human capital ». Having someone to help them to get hired is a huge step for their job research, when they become referrals.

                But on the other hand, there are some negative aspects of hiring a referral. Mrs Swan of Manpower says that you « get people like you already have ».
Indeed, 63,5% of employees recommended candidates with the same sex. In addition, 71,5% of employees recommended candidates with the same ethnicity.
That’s why Rent-A-Car company doesn’t want to go up than 50% of referrals in the total of their hires.

In this  « war » of getting new talents, Referral Recruitment doesn’t seem to be the best solution to hire a person that will bring different ideas, opinion, way of thinking to the company… Because Referrals will have the same background of the employees in the company.

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