Employee Referrals and LinkedIn Recruiter Emerge as Top Sources of Hire

June 2, 2009

Recent Harvard Business School field study shows that only two sources of hire receive a positive Net Opinion Score: Employee Referrals and LinkedIn Recruiter .

LinkedIn recently partnered with MBA students at the Harvard Business School (HBS) to conduct a research study. Its purpose was to determine the value and impact of LinkedIn Recruiter to companies using it. The study, which was completed in April, consisted of a quantitative survey completed by 60 LinkedIn customers, followed by in-depth qualitative interviews with 10 of them.

This study confirmed that recruiters derive more and more value out of tapping a professional network such as LinkedIn, especially when using enterprise tools like LinkedIn Recruiter.

This value is best illustrated looking at the Net Opinion Score. LinkedIn Recruiter was one of only two sources of hire that received a positive net score from survey participants, with a +13% Net Opinion Score.

The Net Opinion Score is calculated in a similar way to the Net Promoter Score. To determine the Net Opinion Score, we asked respondents to rate their overall opinion of various sources of hire on a scale of 1 to 7, with 7 being “excellent”. The net score is the percentage of people who have a high opinion, i.e. selected 7, minus all those who are neutral or negative (i.e. indicated 1, 2, 3, or 4).

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Referral programs topped the list with a Net Opinion Score of +45%. No surprise there. Quite often the most important source of hire for companies, they bring great candidates, usually good cultural fits, in significant volumes and with strong ROI’s.

Seeing LinkedIn Recruiter make that short list in just over a year after its launch is a testament to the professional network’s ability to deliver top hires.

And it comes as no surprise either.

Indeed, that same study identified the top benefits corporate recruiters primarily seek out of a source of hire:

  1. Relevance of Candidate Pool to Jobs (54% indicated this criteria as “absolutely necessary”)
  2. Ability to Find Passive Candidates (48%)
  3. Ability to Contact Candidates (46%)

LinkedIn Recruiter delivers on all three.

With the widest search available on LinkedIn, which exploits accurate and self-published profile data, it allows recruiters to take control into their own hands. They can directly identify the very professionals that have the exact background and skills to be stars for roles at their company.

And with a professional network strong of well over 40 million members, the majority of which are not job seekers and have not posted their resume on a job board, they are very likely to find the most relevant profiles for their technical, hard-to-fill and senior positions.

LinkedIn is also a key tool in referral hiring, the most highly-rated source of hire. That’s why we and so many trainers and recruiters encourage employees and customers to be active on LinkedIn, complete their profiles, connect with professionals they trust and get involved in referring A-players in their network for jobs at their company.

The study also showed that LinkedIn Recruiter customers see results quickly. After less than one year using Recruiter, 10% of new hires were already being sourced through Recruiter. And there is still significant room for improvement as many of our customers were conservative in the number of seats that they first purchased, in order to test our solution in a first phase.

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We will soon share more insights from this study, especially the impact on the time-to-hire. We are also in the process of planning a webinar to present more of its highlights.

Subscribe to the RSS feed of this blog to stay tuned for details.

*For those of you that are not familiar with LinkedIn Recruiter, it is part of the LinkedIn Talent Advantage suite of recruiting solutions. LinkedIn Recruiter is for the exclusive use of in-house recruiting teams and allows them to find and contact highly-qualified passive talent.

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