Referral hiring of the 21st century has gone digital, and therefore, has become more transparent and impartial.

A saying goes, “Hiring the right talent is like marrying the right person.” Arguably, for any company to stand out from the crowd, recruiting the right fit is one of the most crucial aspects. Nevertheless, recruitment departments have failed to catch up with available technology to make the process more efficient and convenient. Companies losing revenue due to bad recruits or early hopping of efficient employees has now become the new normal. There is a need for a paradigm shift in the approach towards recruitment processes and referral hiring is a great stride forward in this direction.

One may say that referral hiring dates back to decades ago. What’s new about it? The new feather is digital platforms offering referral hiring. Mostly, many companies encourage their employees to recruit friends and family members to work for the organisation, and it doesn’t come as a surprise that this approach produces few to almost no results. Referral hiring of the 21st century has gone digital, and therefore, has become more transparent and impartial.

Why is a Referral Hiring Platform Crucial?

It is a fact that resumes are typically the first point of contact that potential employers have with candidates. As the resume of a candidate showcases the key facets of his/her professional profile, it holds (and most likely will continue to hold) substantial weight. However, it isn’t a surprise to anyone that many (nearly 4 out of 10) candidates falsify information about themselves in their resumes. It is virtually impossible for a company to cross-check every single detail mentioned in the resume of the candidate. Thus, the very first step of the recruitment process is flawed. This is where referral hiring comes into play – it yields quick results, entails lowest costs and has the lowest risk of failure.

A 2017 survey by CareerBuilder highlights the above-stated fact. The study observed that around one-third of employers (34 per cent) avoid technology automation for recruiting staff, nearly 44 per cent don’t automate on-boarding and over 60 per cent don’t automate human capital management activities for employees. Therefore, there is an urgent need to switch to technology for recruitment processes. It is here that referral hiring platforms swoop in to be the most important tool in the company’s arsenal. It gives the best application-to-hire time and also the best retention rate.

Modus Operandi of Referral Hiring Platforms:

What does the word blockchain remind you of? Crypto currency? Well, blockchain technology isn’t limited to just that. It also opens doors to the future of recruitment processes for companies. Blockchain enables a protocol which allows people to have verified resumes and recommendations. This not only helps recruiters but also job-seekers. The technology helps develop a robust platform that resolves a critical issue of the hiring process – validation.

Educational qualifications, work experience, and skill sets of candidates are verified and then inscribed on to a block chain. A candidate once verified and inscribed on the block chain, can be accessed by multiple employers. The technology helps in crowd sourcing a candidate’s reputation for a particular skill-set. People in the network of the candidate can attest that the candidate has the skill that he/she claims to have, and endorse him or her. Furthermore, verification of professional details is done through organisational attestations as well.

The Security Aspect

Referral hiring is usually susceptible to fraud as it involves individual references. However, with fast advancing technology, security concerns have been taken care of. There are even provisions to penalise false endorsements.

Facilitating the Gig Economy

With the demand for short-term contracts, freelance work and skill-focused temporary jobs on a rise, the gig economy is redefining workplaces. As per a study by two Harvard economists, alternative work arrangements have risen 66 per cent in the last decade. The trend has got an impetus in India with big firms like Wipro and Infosys hiring contingent workers. However, there are still trust voids that continue to hinder the growth of this work culture. Referral hiring software debunks the layers in this process as employers can post projects, while freelancers can come on-board while signing a smart contract with the company.

In light of all these arguments, it is clear that companies must opt for a referral hiring software that has an active feedback system and is flexible to changing industry needs. To sum up, it is important not to take referral hiring software as a ‘great-to-do-when-one-has-the-time’ sort of thing, but instead to seriously consider one, to ensure your company’s financial viability.

(By Kartik Mandaville, Founder, Springrole)