Source of Hire and the Importance of Networking

While company loyalty might be on the decline, it appears interpersonal loyalty is on the rise.

To better understand how jobs are being filled we just launched a “Source of Hire” survey. The preliminary results are shown in the graphic. Most notable so far: networking represents a far larger segment of the hiring process then first imagined. Since many of these positions are filled before the job is made public a hidden job market is created, with recruiters playing a secondary role. (Note: I'll be posting regular updates for the survey on The Essential Guide for Hiring & Getting Hired group page.)

For job-seekers and talent hunters alike, it’s important to understand the sequence of steps hiring managers use to fill positions. Rather than post jobs and use recruiters to begin a search, networking now appears to be the default starting point. This has always been the case, but it appears this is growing in importance.

Caution: this data still needs to be validated, so take the survey yourself and stay tuned. We’ll hold a webcast on this topic in a few weeks and publish the final results.

Recruiters are always trying to figure out the best way to find people, so source of hire is an important topic. Posting a job is the most obvious, but not necessarily the best approach. While it’s easy to do, too much time is spent weeding out the less qualified. It’s also very impersonal. Despite the drawbacks, the preliminary results indicate that 28% of the survey respondents found jobs this way. Interestingly, many of these were for professional and mid-management positions although most were for staff and less-skilled positions.

Aside from posting jobs, corporate and agency recruiters spend most of their time searching through resume databases, including talent pools like LinkedIn, to find people. Typically these are for professional and management positions. Many of the people found this way aren’t currently looking, but most are open to consider a new job if it’s better than their current job. Only 16% of the survey respondents indicated they were contacted by a recruiter this way. While this seems a bit low to me, it does suggest that recruiters might be spending too much time filling current openings rather than networking and nurturing prospects for future positions. It could also be that job-seekers are getting savvier, bypassing the gatekeepers and getting in touch with the hiring managers directly. Either way, the data indicates that recruiters who aren’t building deep networks are becoming less important in the overall hiring process.

While employee referrals represented the bulk of the “Networking” category, there were some interesting stories of how job-seekers proactively made the connection with someone in the company. One person worked a trade show to find companies that were planning to hire. A few attended regular professional networking events. Another, who wasn’t looking, kept getting calls from a previous supervisor. The big idea here is that being referred by someone you know –whether the person contacted you or you contacted them – seems to becoming the new default for getting another job. While company loyalty might be on the decline, it appears interpersonal loyalty is on the rise.

When filling a position, there is no need to do everything to find a person at once. When a new job is being contemplated, first consideration is typically given to promoting or moving someone internally (Step 1 in the graphic). If no one is available, managers next consider people they personally know or seek out referrals from their peers or trusted connections (Step 2). Much of this happens before the job is officially posted. Based on the survey, a whopping 56% of all jobs are filled these two ways. Often these jobs are modified based on the person being considered. This is one of the reasons managers are reluctant to post them right away and how the hidden job market is created. If these early steps are not successful, managers reach out to recruiters and officially open the job. These recruiters then go into auto-pilot mode immediately posting the job (Step 3) and starting to search through resume databases (step 4).

Once the survey is finalized it will be possible to determine if the importance of networking is growing and if it's universal across all sizes of companies and types of positions. Until then, job-seekers and talent hunters should still consider the implications of these trends and adjust their efforts accordingly. Specifically:

1. Job-seekers should take advantage of the sequence of steps process by building a deep network of contacts who are on the alert for opportunities in the hidden job market.
2. Recruiters need to shift their focus from reactively filling positions to proactively building networks of talented passive prospects to fill future positions. If they’re doing their jobs correctly, their best prospects need to be contacted before the requisition is officially opened, not after.
3. Hiring managers need to reach out to their network of former co-workers and build a personal virtual talent community. HR and recruiting leaders need to encourage and support this type of early-bird networking.
4. HR and recruiting leaders need to embrace the idea of workforce planning. Having a forward-looking hiring forecast allows a company to more fully utilize the networking capability of LinkedIn, Facebook and Google.

Aside from knowing how you’ll get your next job, knowing how you got your last one is important to us, so please take the survey yourself, and then pass it on to others. Whether you’re looking for a great job or looking to hire a great person, recognize that the old way of doing business is no longer the best way. As Bob Dylan said long before I became a headhunter – “the times they are a changin’” – and they’ve been changin’ ever since. The problem is that most people aren’t changing fast enough to keep up.

Photo: Cuneyt Hizal/E+/Getty Images

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Lou Adler (@LouA) is the Amazon best-selling author of Hire With Your Head (Wiley, 2007) and the award-winning Nightingale-Conant audio program, Talent Rules! His latest book, The Essential Guide for Hiring & Getting Hired, is now available as an Amazon Kindle eBook. You might want to join Lou's new LinkedIn group to discuss hiring related issues.