Social networking and recruitment

There are some major changes taking place within the recruitment software market at the moment. Changes that have the ability to remove vendors such as Taleo from being “top of the pops”.

What is it? Intelligent matching of jobs to social networks.

Both Australian job referral vendors 2Vouch and Hoojano do this but not to the level that we are seeing from players such as JobVite and Appirio. Appirio has a US$25,000 annual fee and connects with SalesForce and Facebook. Once employees opt-in the system reviews their friends list in Facebook and match potential jobs to friends. JobVite works in a similar way but uses both Facebook and LinkedIn, then the person who had the job referred to them can also opt-in to receive future job notices from the company. ERE had a review of both Appirio and JobVite’s new features.

These features validate the use of social networks for recruiting and move them from being a passive part of the process to a key component.

If you are in the market for a recruitment solution the decision making process just got a little harder.

(Disclosure: 2Vouch is a client of mine.)

Hoojano in partnership with MYOB

Today Australian job referral tool, Hoojano, announced a partnership with MYOB under the banner of StaffSearcher. An interesting move by both organisations, release here

MYOB is moving more and more into SaaS offerings to small and medium business, they even own a web hosting business! Providng these businesses a cost effective method of recruiting candidates is a smart move.

From Hoojano’s point of view an interesting move and one that will give them great visibility to small to medium business owners in a difficult market. Many industry obversers, I for one, have been wondering, after launching their beta in February 2008 what Hoojano has been up to. The main Hoojano site has no jobs which had some wondering had they pulled up stumps! 

I registered and took the site for a bit of a test drive. Still very much like the original Hoojano offering, a few bugs still in the service such as wording errors in emails, but overall a pleasant experience. The biggest complaint is still the one from February 2008, the building up of your contact for referrals is a good concept but time consuming for the user. Also the system does not seem to allow me to create a profile to find myself jobs.

The StaffSearch fees are a bit complex:-

Listing Fee $25 + GST 

Reward – $ Specified by Hirer + GST 

StaffSearcher Reward Commission – 20% of the Reward 

Referrer Reward Commission – Referrers share of reward 

Sponsor Commission 5% of the Reward net of Reward Commission 

The reward is variable and up to the advertiser, and for the initial roles seem rather high but then that’s what the advertiser is will to pay.

A different model to 2Vouch*, who have a zero listing fee and the rewards based on salary levels.

A comment MYOB with StaffSearcher have decided to go around recruiters, a tactic not used by 2Vouch who have been actively partnering with recruiters. A move that might back fire, it has Geoff Jennings off side already

Hoojano/StaffSearcher, know this.  Probably a better approach to your marketing would have been to engage recruiters, rather than rally for their departure from the recruiting process.  

Hoojano CEO Mike Wilkinson responded to Geoff in the comments:

Can I respond on the line that MYOB has added to the homepage. By the way, I respond objectively as it is not a line our business (HooJano) adopts. MYOB is free to attract custom however they see fit.

And

What we have found in our discussions with recruiters is that under certain conditions and if the rewards are at a certain level, they are completely open to submitting candidates. (FYI, recruiters can chose to be overt or not in disclosing their core business, the customer simply wants candidates.)

I hope recruiters do at least give it a go and more so I hope they make money at a good margin so it can evolve as a long term, mutually beneficial part of their business.

I say game on! The more the merrier and the only winners should be candidates and employers!

(Disclosure: 2Vouch are a current customer of mine.)

A small but important clarification

A couple of days ago an anonymous blog, The Didge, here in Australia posted a fairly length review of the job referral service 2Vouch during which they stated that I am the owner. This is incorrect I have no ownership in the business. 2Vouch are a client of mine and that is all. I did suggest to the writers that after reviewing Hoojano they should also review 2Vouch. (UPDATE: The Didge have updated their post while I was writing this clarification.)

I will say I also disagree with some of their analysis of the site, and not just because 2Vouch have been a client. Here is a summary of my thoughts:

  1. They are not too late, when there are more candidates in the market finding the right candidate is still difficult. A referral has the personal reputation benefit that the candidate is of high quality.
  2. Financial rewards are not going to pressure poor referrals. A referrer’s reputation is the most important attribute. If recruiters/hiring managers see poor referrals from someone that will reflect badly on their own personal reputation. 
  3. Referrals have been found to actually decrease the time to hire. For example Vodafone in Europe found that by focusing recruiting activities on employment brand management and employee referral, the average recruiting cycle time per hire was reduced by more than two-thirds. Further the CareerXRoads 7th “Source of Hire” survey found that the efficiency or yield of the referral process is second to none; in 20% of the time it took 2 referrals to make the hire, 16% for 3 referrals.
  4. The points on registration, branding of recruiters etc are reasonable points to some degree. I’m not convinced they are issues for 2Vouch given the business model and their go to market strategy.
But analysing the analysis was not the point of this post.

2Vouch for your friends and get paid

2Vouch

Launching their public beta today, September 1, is Australia’s newest social recruiting service called 2Vouch. (Disclosure: I have done some work for 2Vouch.) Having been in private alpha testing over the last month or so the Melbourne based company is for the first time allowing the public access to their service. The best way to describe the tool is really to quote 2Vouch General Manager Jeremy Samuel:

2Vouch is a social recruiting system that pays professionals $1,400-$2,800 when they make referrals someone who gets hired. For companies, it is free to advertise. They only pay when they place someone through the system and we offer a 110% money back guarantee if the person doesn’t work out. 

The service is fundamentally similar to Hoojano which I spoke about back in February this year, with a few differences. Both basically rely on the refer a friend approach to filling roles.

Employee referral programs are a very common approach used by many organisations and research has shown they are the lowest cost source for hiring in today’s marketplace, even lower than using job boards! In certain industries within the US best in class companies hire over 46% of employees through referral programs.

Cost is not the only benefit research by Professor Emilio Castilla from MIT Sloan School of Management found that employees recruited through employee referral programs can have a higher performance over employees recruited through other means. But back to the tool.

One of the biggest differences between Hoojano and 2Vouch are how they match jobs, although both would say otherwise. Where as Hoojano requires the member to actively review their contacts to find matches 2Vouch uses their Job Genie™ to email the member when possible jobs that match their contacts are available.

Payment is only made on placement, not to advertise so there is no harm for recruiters and employers giving the tool a test run. Further 2Vouch is offering a 110% refund for recruiters and employers if they hire someone through the tool and they do not work out. While this might sound impressive I think 2Vouch will keep their money as research has shown internationally that placements made through referrals are of far higher quality than regular placements.

Members get referral payments, ranging from AU$1,400 – AU$2,800 once someone has been successfully hired. These payments can be made to the members PayPal account or donated to charity.

2Vouch are ranked #26 in the Ross Dawson’s BRW Top 100 Web Applications, original development was completed by Ben Barren and his team from FeedCorp and have recently become part of the Pollenizer gang, Australia leading startup management garage, to create a very compelling tool for the Australian market.

A final note, and a plug, as part of my work with Inspecht we have a research report available on building a business case for using referrals in hiring.