Referrals – Harnessing the power of social networking by Stephanie Whitaker

Word of mouth. Regardless of the service you’re seeking, the world runs on word-of-mouth recommendations and referrals. And that goes for finding the right employee.

Increasingly, employers are turning to their own workforces to help them find new employees, with many companies offering financial bonuses for those referrals.

A new website (www.bohire.com) takes it one step further, allows anyone to refer potential employees to companies that are recruiting.

“Recruitment has always been about networking,” said Toronto-based Vincent Tsang, one of Bohire’s three founders. “We’re leveraging the power of social networking and bringing it to the recruitment world.”

Here’s how the Bohire website works: Employers post jobs for free on the site and people refer friends, acquaintances or family members for the positions.

“The employers choose the rewards they want to pay,” Tsang said. “Each employer has a hiring budget, which is why there are different amounts attached to the various jobs.”

He says referrers needn’t be experts at recruiting; they need only to tap into their networks.

“You just have to know someone with the right skills. Everyone knows someone. That’s what makes this like social networking.”

Tsang got the idea for the service after a conversation with his friend, Vince Wong, a human resources director who expressed frustration with existing recruitment methods.

“He was frustrated with job boards and agencies,” Tsang said.

Tsang and his business partner, Clinton Fox, had had a lot of experience in the human resources field. Both had established Info Check, a Toronto resume-checking service, 15 years ago; they sold the company in 2006 and were wondering what their next gig would be.

Wong told Tsang that job boards weren’t always providing him with the best candidates.

“Active job seekers aren’t always of the same quality as passive job seekers,” Tsang said. “Agencies are great because they tap into passive job seekers, the people who are already employed and are doing a great job.”

However, the cost of finding the right candidate through a headhunter can be as high as 35 per cent of the candidate’s first year of salary.

Tsang, Fox and Wong began to brainstorm about creating a different recruitment tool.

“We realized that a vast amount of recruitment comes through referrals,” Tsang said. “An employer will trust the person referring someone because he knows that employee. It’s like going on vacation. You want to know who stayed at the resort you’re booking and how they liked it.”

The three partnered up to create the website, which went on line in January.

Bohire bills itself as a community of job referrers where employers can post an unlimited number of job offers at no cost. This week, the new job postings offered rewards ranging from from $350 to $6,300. Thirty per cent of the bonus goes to Bohire. However, that amount is skimmed off before the bonus is posted on the site.

“So referrers receive the amount that’s listed on the website,” Tsang said.

To ensure that referrers recommend the right talent, the site includes a rating system in which employers rate the referrers’ efforts, similar to the self-policing ratings on eBay. The referrer is also required to explain how he knows the person being referred, Tsang said, and why he’s referring the candidate.

“So the referrer has to do some work,” he said.

There’s also a provision that allows employers to test-drive newly hired candidates for 30 days before awarding the referral bonus.

“We want to make sure, from the employer’s perspective, that they’re protected,” Tsang said. “We’re not an agency. We’re a community of people referring people.”

Could a job referral website become the next hot trend in recruitment?

“I think it could put a lot of recruiting firms on edge,” said Linda Cicuta, a career adviser at the McGill Career Centre and a former headhunter.

She says the reason in-company referrals tend to be successful is that employees are usually able to assess whether the people they refer are likely to fit in. Supervisors in many companies turn to their own employees to recommend potential candidates because “the employee is familiar with the culture.”

“Skills are easy to find. Either you have the technical skills or you don’t. But if you have several candidates who meet your needs, it’s personality and character that allow them to fit into the organization,” Cicuta said.

Iris Unger, executive director of Youth Employment Services, says one of the things that makes in-house referrals work is if the referrers are committed to their organization.

“When people are satisfied with their companies, they’re the best ambassadors to identify people who are likely to fit into the culture,” she said.

The Bohire model is different from the in-company method of recruiting because referrers don’t work in the organizations to which they refer candidates.

“So the Bohire referrers become third-party recruiters,” Cicuta said.

Lindsay Ortega, a recruitment specialist at law firm Miller Thompson LLP, one of the employers that has posted jobs on Bohire, says the system has enabled the firm to hire four people in its Toronto office and the company is considering a candidate for its Montreal office.

“When people from outside of our culture refer candidates, we still do due diligence before hiring,” Ortega said. “When people refer candidates to us, they tell us why they think the people would be a good fit. They often say: ‘I’ve worked with this person for six months and I know he works hard, is keen to learn and is quick.’ We think this is a great business model because it makes the referrers accountable. And it’s enabled us to save about 86 per cent of the cost of recruiting someone.

“What’s more, we post referral rewards on our terms.”

In keeping with the social networking theme, Tsang said, Bohire has had an application on Facebook, which, when downloaded, gives Facebook members notice of new job postings.

“There are 9 million Facebook users in Canada, giving Bohire a potential reach of 9 million people,” he said.

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