Why relationships trump resumes

Relationships have always been a critical part of how any company does business, especially when it comes to the sale and marketing of your service or product. Every single person has his or her own unique circle of relationships. Analyzing the relationships that exist within an organization can provide numerous benefits, including minimizing the need to cold call as well as develop a more qualified pool of potential sales leads. It can also provide human resource departments with an adept group of candidates for filling any vacancies.

There’s no question that internal referrals work. Larger organizations are taking internal job referrals so seriously that they often reward employees for successful referrals that lead to a hire. The New York Times wrote an article about this a few weeks ago, highlighting how companies such as Ernst & Young, Deloitte and Enterprise Rent-A-Car are leveraging internal referrals. The article also mentioned how candidates are fast tracked through the hiring process when a current employee refers them.

So why is this important? Why are companies seeking internal recommendations and trying to understand what employees might have leads on the right person for the job. They do it because it works. Here’s why:

  • Quality of the Candidate: Referred candidates tend to be very qualified for the roles they are recommended for. One of the main reasons for this is that the person making the recommendation knows the candidate’s skill sets well enough to put their own name and reputation on the line by recommending them for this position. Chances are the referrer has known the candidate for years and understands exactly their skill sets and
    work habits, as opposed to having to try and figure all of this out through various interviews.
  • Cultural Fit: Culture in an organization is critical, as it is the difference of employees loving their jobs or not – and a happy worker is a more productive worker. Individuals who are recommending someone for a position already understand the corporate culture, their friend’s personality and work ethic, and feel that they are a good fit.
  • Improved Workplace Morale: Alongside culture, having employees refer candidates can also positively impact workplace morale. People like working with others who are easy to get a long with, and share the same pleasure in their work. Also, hiring someone based off of the recommendation of a current employee promotes the understanding that everyone in the company’s opinions and suggestions are respected.
  • Speed of Filling Vacancy: Employee referrals help to ensure a position is not sitting vacant for a long period of time, speeding up the total amount of time from when the position became available to when it has been filled, cutting down on productivity loss within your organization.
  • Cost Savings: Savings from leveraging employee referrals can be enormous for a company. Internal referrals save on recruitment fees, but also in training and turnover costs. These savings can impact the bottom line in a big way, freeing up cash for other areas of the business.

Are you currently leveraging the relationships of your employees when hiring new positions? Have you experienced any other benefits from looking within for the hiring process? We’d love to hear about them.

Comments (2)

Makes a ton of sense. But it’s “morale”, not “moral”. There’s a chance referrals could improve morals but I doubt it. 🙂

Updated! Good catch, John. Thank-you for reading and letting us know.

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