Does PERP Represent the New Future of Sourcing?

We all know that employee referral programs and networking are the prime means to find top quality talent. However, this takes time, effort, and the hands of a very skilled recruiter to be productive. It appears this won’t be the case much longer, since we’re now heading toward a technological tipping point.

Automating the ERP process represents the upcoming wave of new technology. From what I’ve seen, fundamental changes are now underway that will soon change the way corporate recruiters find the 85% of candidates who are not now looking. This could have significant negative repercussions for external recruiters and every other current sourcing approach.

LinkedIn, Jobvite.com, and Referio.com, among others, are now offering and/or are beefing up their employee referral capabilities as we head toward an era of full ERP automation. This essentially means that your employees’ LinkedIn, Facebook, and Outlook contact lists will be scrubbed for suitable candidates for your company’s current and future positions. Adding the P in ERP though is where the real advantage lies, and you can get in on this action right now.

The differences between PERP and ERP are night and day. ERP is based on the idea that your employees will refer their close friends and associates who have asked to be referred to your company. This is a pretty narrow group of people, with the quality and timing hit or miss. Since your employees are reluctant to say no to a friend, quality is questionable, as well at the low chance you have an open position available at the time of referral even if the person is good. Here’s how the P in PERP changes this model:

  1. Instead of waiting for a referral to call in, your employees will regularly and proactively review their existing contact lists to identify people who are potential candidates for your open positions. This requires that employees are aware of these open positions, and your employees (or recruiting team) are proactively contacting these people. Getting these people interested in what you have to offer won’t be to hard if your outbound messaging is compelling, but will be a wasted effort if you send a boring and skills-infested job description.
  2. A P2 employee referral program adds another level of proactivity to the mix. In this case your employees continually and proactively expand their current network of associates with the best people they’ve ever worked with in the past. This way when you send out the compelling emails, you’ll reach a broader group of top performers. If the emails are especially compelling, they’ll have a viral effect, reaching even more top performers. (We’ve developed a pretty corny “wild ‘n crazy” ad wizard that converts boring job descriptions into compelling ads. If you don’t laugh too loud we’ll let you look.)
  3. A P3 ERP goes even further. With this addition, your employees send regular messages to their contacts suggesting that your employees be contacted whenever their connections begin contemplating a career change. This way your company will have a chance to pursue these people before they enter into the public job-hunting market. When your employees are contacted they need some means to automatically search current and soon-to-be opened job postings for a fit. Getting hot prospects first in combination with some type of automatic matching feature will be a huge competitive advantage.
  4. Adding interactive email to your CRM (candidate relationship management system) further automates the PERP process. In this case, prospects candidates who respond to your initial outbound email will receive an appropriate system-generated response based on their request. This will appear to be a personal message from a recruiter. With the appropriate decision-tree logic, candidates can be reeled-in via a series of information sharing emails. Then when the candidate indicates he or she is serious and wants to talk about a specific job, a meeting can be automatically arranged to talk to a recruiter.

While this type of full automation isn’t quite here yet, don’t be surprised to see partial solutions offered at the next ERE Expo. Regardless, here are some things you can do now to get started developing your own PERP right away:

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  1. Have your employees proactively expand their current connections. In the future, the companies with the largest number of high-quality connections to their employees will be in the driver’s seat. They’ll quickly lose this advantage though, if their offerings describe lateral transfers instead of career moves.
  2. Have your recruiters cherry-pick your employees’ existing connections. LinkedIn is great for this. Just have your recruiters review the current contact lists of their fellow employees and find out who’s the best, whether they’re looking or not. Then contact these people and recruit them for your open opportunities.
  3. Add some type of quality requirement to those people being referred. Make sure your employees are required to justify why they’re referring someone. This provides some indication that the person listed in the talent database is an all-star or a bench player. It also provides the employee a reason not to refer someone unqualified.

Getting people before they enter the job market is what early-bird sourcing is all about. This gives you the chance to decide if you’re interested in pursuing a candidate, and a week or two headstart on the completion. But be cautioned. As the process gets automated, early-bird sourcing will not be an option.

Just consider the flip side to all this. Every company will soon be at risk in losing its best people if its competition is implementing a PERP and it’s not. Just to stay even then, it will need to enter the fray. This will accelerate the process of job-changing as the 85% of the candidates who are not now looking are soon connected somehow with everyone else via PERP. Aside from hyperspeed sourcing, turnover will increase, loyalty will decline, compensation will increase, and the world as we know it will change.

Fasten your seatbelts.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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9 Comments on “Does PERP Represent the New Future of Sourcing?

  1. Answer is “yes” this is a better tool for sourcing. Traditional ERP programs are bogged down with policing the rules, throwing an occasional bone to referring employees with a token interview of a friend, and separating the duplicate submissions to determine who got there first. After a little disgruntlement and bad press, the whole system goes bad. Proactively going after candidates through current employees can be a great sourcing tool. Those who follow this paradigm and develop it further could have a profitable answer.

  2. Hi Lou!

    One small missing piece here – consciousness.

    The major shortcoming of any PERP/ERP (sounds like something I do after drinking a root beer) is the employee “remembering” to interact with their contacts. The role of recruiters is to help with this by “poking” employees on a regular basis. This could be with a login message, a high priority email with links to the CRM, an SMS, etc.

    Of course too frequently reminding employees about referrals can be taken as spamming but if you treat this as a customer relationship issue, this too can be worked out with market research.

    In the end, if they don’t know about the needs, their relationships aren’t terribly useful.

    I forgot to mention my referral carnival idea…

    Hope all is well Lou; let’s talk next week.

    Steve

  3. Thanks, Lou. Part of this is rather old news to me:
    In 1998, I worked for a company where the employees were so successfully incentivized to refer people that some ordinary (not recruiting) employees would pay for newspaper ads to attract candidates!

    I think much could be done if companies gradually implemented this/a similar policy for its employees:
    “As part of your duties at XYZ, we expect you to refer 1-2+ individuals (who we hire) each year. In return for your valuable contribution, we will pay you some $Xk for each person we hire. We have these tools to help you do it:…”
    The PERP is designed to minimize the “random friend” type of referral and other similar problems Thomas mentioned.
    Frequently publicize the PERP and recognize employees who exceed their requirements, e.g. giving them one of those 8 ft2 fake checks at the Quarterly Meeting….

    Personally, I think (P)ERPs aren’t discussed much because recruiters don’t typically get money/credit for hires through them…

    Cheers,
    Keith

  4. PERP has been around for awhile – most TPRs earned their fees this way – the big thing now is that much of this is being automated. In a few more months you’ll see a surge in this new technology from lots of people.

  5. Yes, employee referral programs are the main way to find quality candidates. But ATS like Jobvite have a partnership with Linkedin which allows employees to “choose” whether or not they want to sign up. But as most people do not want to mix their work place with possible personal information, such as Facebook, more often than not they elect to forgo this feature on these newer applicant tracking systems. We also use to connect our salesforce.com on product leads to highlight our recruiting blog which brought them back to our corp website careers section and so on.

    So no, I don’t agree that they will replace traditional sourcing. Reaching out directly to candidates, recruiters can still be equally effective. These new ATS just help track this effort. It may automate the process or showcase your company and jobs, but talking to people still is most effective.

  6. Yes, employee referral programs are the main way to find quality candidates. But ATS like Jobvite have a partnership with Linkedin which allows employees to “choose” whether or not they want to sign up. But as most people do not want to mix their work place with possible personal information, such as Facebook, more often than not they elect to forgo this feature on these newer applicant tracking systems. We also used to connect our salesforce.com on product leads to highlight our recruiting blog which brought them back to our corp website careers section and so on.

    So no, I don’t agree that they will replace traditional sourcing. Reaching out directly to candidates, recruiters can still be equally effective. These new ATS just help track this effort. It may automate the process or showcase your company and jobs, but talking to people still is most effective.

  7. Interesting article. Anyone who disagrees that employee referral programs are and will continue to be the foundation of modern external sourcing systems is an individual with a myopic view of the world that is continuing to cling to a version of reality quickly fading from existence.

    Proactive employee referral programs as Lou pointed out are profoundly productive programs capable of generating a large percentage of high quality and diverse hires for an organization.

    That said, truly productive proactive referral programs will never be automated and anyone who tells you otherwise is being paid to do so.

    While I will agree with Lou that the emerging category of products engineered to support referral programs are leaps and bounds ahead of the solutions provided by the major ATS players, I must remind folks that technology by itself is never a solution, but rather a tool that enables a solution.

    All of the products currently available and those coming down the pipe, including those held tightly under wraps at this point focus on communicating opportunities and facilitating a transaction. Unfortunately, the methodology behind the communications is template based, meaning that the recruiter crafts a message that then gets deployed via e-mail and social network messages/posts. Without extensive labor to craft highly targeted and customized messages, the communications become something we are all familiar with, spam.

    What makes proactive referral programs profoundly powerful are sourcing strategies unique to specific needs that guide highly personalized messaging to encourage referrals and a multitude of human powered activities to pull referrals into the program.

    Broadcasting opportunities is something that nearly all technology platforms that power ERP’s can do, and something every recruiter, employee and candidate are familiar with. The viral employment opportunity message is possible, and a few examples exist, but they are few and far between.

    What really makes an ERP proactive isn’t the tech, it’s the design of the program. Consider these tips:

    1. Research opportunities to identify companies were suitable talent may reside, then craft a series of specific questions that can be posed to highly targeted groups of employees that will most likely have a connection to the target to prime their memory. These questions can be posed via e-mail, but putting them to a small group face-to-face works much better. These questions are called priming questions because they help prime EE’s memory enabling them to recall possible referrals they might not recall otherwise.
    2. Make the activity about building the future of the team or the company and not about the reward. Truth be told $2,500 is enough for most people to refer someone they know would be great for the role, but don’t necessarily like!
    3. Reward managers for high levels of quality referral activity from their downstream employees, nothing works better than a little peer pressure to demonstrate recruiting is a team priority.
    4. Put your action behind your talk. Lots of companies talk about the value of top talent and the importance of ee’s playing a role in recruitment, then treat the referring employee and their candidate like crap. On average, 1:4 employees who has participated in their employers ERP would not do so again based on their past experience!

    Left alone as most programs do, employees will refer their unemployed or soon to be unemployed friends, which isn’t what you want. Getting employees to be truly proactive, engaged, and champions of recruiting top talent is hard, and it requires a lot of work, but the results are well worth the effort.

  8. Lou:
    I’m a little late arriving on this article. But, I have a couple of problems on this topic. First, what about employees’ fears of loss? Meaning, people in general have an inherent fear of loss and by turning over their own professional and person Rolodex, they risk damaging an existing and closely guarded relationship, thereby possibly losing contacts. Thus, for this reason alone, employees might put a fence around their contact list; call it a lack of inclination to share – a dispositional issue. Any thoughts on how to get around this?
    Second, with employees performing against increasing demands, how do you propose gaining their commitment to disseminate a well written opportunity-narrative when they’ve got “ump-teen” other things on their to-do list, already competing for their time, and critically connected to their performance success? A passive incentive is nice – as I’ve personally gotten nice bonuses for referring people. But, it’s akin to telling someone that yes, there is gold to be found, just move plenty of earth and rock and at some point, you’ll find gold. Aside from a coercive incentive, what else is there?

    Don’t get me wrong, I’m all for every single idea you’ve presented in this piece. I actually get excited about this level of thinking. But I also encounter resistance and biases on the part of existing staff and people that makes me think there has to be a means of some kind to effectively overcome it. What are your thoughts on this extension of you topic?

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