In this episode Matt Alder talks to Guido Niewkamp from SocialReferral
The concept of super charging employee referral schemes by plugging them into employee social networks has been hyped as the next big thing in recruitment for at least the last five years.
It now seems that the tools and approaches that power this concept have matured and are bringing huge benefits to the early adopting employers who bought into them. Social referrals are now hitting the mainstream and in this week’s episode I talk to Guido Niewkamp the co-founder of SocialReferral to discuss what is working and why.
In the interview we discuss:
• How employees become brand ambassadors
• Why 50% of employees won’t refer and how employers can motivate the other 50% to do it
• Success stories including a retailer who recruited 200 people in a month from their social referral scheme
Guido also gives his take on the future of the referral space and we discuss why referral schemes will need to be more about employer branding stories and less about just sharing jobs.
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Recruiting Future with Matt Alder - What's Next For Talent Acquisition, HR & Hiring?
Ep27: The Belated Rise Of Social Referral Schemes
Support for this podcast comes from Broadbean. Broadbean is a smart, innovative, global recruitment technology business. They help recruiters to reach candidates in a fast, effective and efficient way. From candidate attraction and job distribution to candidate sourcing and employee referral, Broadbean can help you post, search, track, socialise and engage. They're also actively integrated with complementary tech businesses and job boards to make sure your recruitment process is 100% complete. Get the job done with Broadbean. There's been more of scientific discovery, more of technical advancement and material progress in your lifetime than mine, at all the ages of history. Hi everyone, this is Matt Alder. Welcome to episode 27 of the Recruiting Future Podcast. The concept of social referrals has been seen as the next big thing in recruiting for at least five years now. The tools and approaches in this area though seem to be finally maturing, offering huge benefits for the early adopter employers who have embraced them. To explore what's happening in this area, I recently spoke to Guido Nucamp, co-founder at Social Referral, who are one of the market leaders in this space. Hi everyone and welcome to another Recruiting Future Podcast interview. My guest this week is Guido Nucamp from Sexual Referral. Hi Guido, how are you? How are you doing? Thank you. Yeah, very good. Could you just sort of give, tell everyone a little bit about what you do and what your company does? One of the founders of Social Referral, a company we started in 2010, it's based in Amsterdam. And we, for the last five years, we've been running online and social integrated referral programs for companies in Holland and the UK and Belgium. And since December last year, we joined Career Builder. So we're now part of the Career Builder family. Okay. And what was your kind of motivation to set up the company? Why did you sort of consider referrals to be important? What sort of gap in the market did you spot that sort of caused you to start Social Referral in the first place? Yeah, for the real, I used to work as a recruiter, a team leader in recruitment and an agency recruiter who had many different roles in the recruitment domain. The main motivation was that every time I went to the hiring manager with my short list, there were a lot of, hey, I know this one or hey, that person worked with somebody in my team, et cetera. And I tried to explain the hiring manager that caused a lot of money and effort to get this list and if his team would have helped out, it would be quicker and cheaper to do. So the idea of referrals was the most easiest, quickest and best way to get the right candidates, but it didn't really happen at most companies I worked for. That's where the idea started to start maybe with a tool or an app or, well, we had a lot of ideas, but I have non-technical backgrounds. So we're more technically oriented at a co-farm, which we started Social Referral to make referrals more important in the sourcing strategy of every company. And can you just give us a very, very sort of quick overview of what the product does before we sort of dig down and start talking about referrals more in general? So what does the product actually do? Yeah. Well, basically what we try to do is to make sending out referrals easier and more fun than it is right now. We focus on the employees, not so much on the recruiters, so the employee is the end user of our products. And employees have a really rich and fast network, but they rarely use it for referrals because they don't know which jobs are open or whom to refer. And that's the first problem we solve. So we ask users to sign up once and from that moment on we send them notifications. You can connect your social networks so we can do matching in your social networks or we give you suggestions on people you know. And plus we try to motivate you with a whole range of incentives going on in the system. And as the last thing, tracking trace, that was one of the complaints. I remember when I was working in a recruiter, employees sent out a referral, but I never heard back from the recruitment department. And that's another problem we solve. What we've learned in all the years is that a product like this is really a consumer-orientated product and not so much on the recruiter itself. Okay, that's interesting. So really sort of designing it to motivate the employees to take part. Correct. Cool, okay. And obviously you're sort of tapping into the power of referrals and the power of social media. How do you think social media is, in what ways is it the kind of game changer for referral schemes? How has it sort of changed the rules or added more potential to the way these schemes work? Yeah. Well, I would like to say social media, but also mobile in general, and maybe messenger apps especially. But people are really connected like they have never been before. So to get in contact with somebody is the most easiest and quickest of all the times we have lived in. And if you're talking about the referral that's leveraging your social networks with the tools and the networks that are there right now, it's easiest to leverage the network than ever before. And that's why it came strangely made that referrals are not bigger than they should be, because everybody is so connected and can get in contact with everybody so easily why are referrals not of a bigger influence in a recruitment strategy? Yeah, I think that's interesting. And I think that really is a key question, because I think the discussion around social media as a referral has obviously been going on for quite some time, the whole time that you guys have been sort of working with this product. Why do you think this hasn't been more important than it should be? What other barriers do you think that have stopped this kind of really taking off as a way of recruiting? I think one of the problems we're facing is the concept of free will. So people are asked to send out referrals, but they don't need to. So then we can talk about motivation. So why should I do this? What we've seen in all these years running the referral programs is that employee satisfaction is the main driver. So if people are happy at a company and they're willing to refer, then they will refer. And with tools like ours, we make it better and quicker and easier. But we cannot change their intrinsic motivation. So are you happy to refer? It's the same principle if you eat in a restaurant, if you have good food, you would refer to your friends, if it's bad, you won't. And it's not much so different with jobs. I think that's really interesting because one of the things I've always found interesting about this space is people try and use technology to be the kind of complete answer to the problem. And I think as you identified there, there's a lot more to referral schemes than just sort of buying a tech tool and hoping for the best. You obviously mentioned employee free will and people wanting to actually recommend their employer to their contacts. What other things make for a good referral program? What other things do employers and in-house recruiters have to keep in mind if they want to kind of employ tools like yours in the most effective way? Yeah. Well, again, it comes down to motivation. I mean, most of the employees are – so maybe step back. What we have seen is that about 10% of every – of all the employees in a company are your investors and we've seen it with most companies. So 10% will refer whatever happens. Then you have 40% of the people that are reluctant to refer, but if you motivate them right, they will. About 50% of people will not participate at all. That depends a little bit per country and company and the culture, but a large group in every company does not want to participate in a referral program. So we are talking about a group that is willing to refer, so this 40% group, but we need to motivate them or give them notifications. And that's where the reward systems kick in. So a lot of companies handle monetary rewards for a successful referral, some use competitions, but then again, it really depends on what kind of company you are and what makes the people tick. So there's not one uniform answer to this one. I'm afraid. Okay. No, that makes sense. I was going to ask, actually, was there anything that worked more than work more than anything else? But instead, I know that you guys work with a number of employers in this space. Does this really work? What success stories have you seen from connecting employees' willingness to make referrals to social media and mobile and messaging services? What sort of success is out there? Yeah. Well, maybe to start off with the corporates. The big corporates, Photophone here in Holland has been a customer of ours for four years now, and they have more than doubled their total referral hires during the course of that. About 65%, 70% of the employees participate in a referral program. So you see with a company like Photophones, a strong brand, people are happy to work there. That's a young population, they're very social, media-minded program like this really makes a difference. We've had a big success with a retail store that we're opening up a couple stores somewhere in Holland, and we did a campaign for them, and they hired, I think, about 200 people within one month through referral. And the difference in this was that we're really young people, and they could win a big prize. I thought it was a scooter or something else, but it was really that something that made the word of mouth communication within a company go bananas. So everybody was talking about it, and everybody was participating in this. You're also working with technical companies, takes a little bit longer to get traction within technical companies, but as everybody knows that this is the way, I see the benefits of the tool, they really start to use it. Of course, there's also companies that you don't get traction. Well, we started in 2010, I can say that during those years, financial industries were quite tough to get on board. Yes, I can imagine that might have been the case. I think it's interesting, actually, particularly with those big corporates, I'd imagine that a lot of the success that comes from using tools like yours is great internal campaigns to build awareness and that kind of stuff. What are you seeing in that kind of area? What's been working? Well, the campaigns are quite important, but we've always been dealing with HR and with recruitment. If you're talking about campaigns, it's more of a marketing and marketing communication approach. So, it was hard to disconnect with HR having to set up campaigns to get user adoption or drive engagement. What we did to help them out, we created an onboarding tool where we have a lot of templates for flyers, posters, banners, wallpapers, you name it, emails, text messages, you can do everything, but we give them all the tools to run campaigns internally. So, the only thing they have to do is change the copy if they want to, but with the tool like ours, they can run internal campaigns, not only for onboarding, but also for re-engagement with the tool, maybe one or two three times per year. That really helps. That's really interesting and I can see that that's really crucial to this kind of thing working. So, final question, you've been kind of at this and in this space for five years now. Where do you think it's going in the future? What are you sort of seeing coming down the pipe that is of interest? Where do you think the referral space is going to be in a couple of years' time? I think it's going to be bigger. There's a couple of companies really working to push the corporate referral domain. If I talk for ourselves, so one of the things we've seen is that referrals are nice, but people only refer one or two or three times per year and that's about it. So, to keep this engagement going, that's quite difficult. What we've been starting to do is to offer employees not only jobs, but also employer-branding content for them to share. So, sharing a job is effective, but the type of content is not that interesting for a lot of people, if you share this. But if you want to build your employer brand, why not have your employees either create or share content about the company? So, we try to make a referral program in terms of offering the type of content we offer. It may be a little bit more interesting. So, people come back a little bit more often, check about new jobs a little bit more often and stuff like that. In the end, referral is part of an ambassador program. Yes, absolutely. And I think it's very interesting that it's moving in that direction and hopefully we'll see a lot more sort of sophistication in terms of how employers use their employees as ambassadors in the future. Guido, thank you very much for talking to me. No problem, happy to do so. My thanks to Guido Nukem. For show notes and past episodes of the podcast, please go to www.rfpodcast.com. You can also subscribe to the mailing list there and find out more about me on the work with my older page. You can of course subscribe to the podcast itself on iTunes and on Stitcher. Thanks very much for listening. I'll be back next week and I hope you'll join me. [Music]