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Wednesday, May 03, 2006

Hiring friends of friends...

Just came across an interesting article for recruiters desperately struggling to reach their sky-high recruitment targets. You'll recall that back when we published our 2006 Recruitment Channel Report we highlighted the fact that candidates' preferred method for finding a new job was through a personal referral channel. That's to say a consultant's career path can be greatly influenced by the opinions of friends and alumni - and that they are particularly likely to apply to a firm where an existing contact has been able to get them a "foot in the door". Firms with really cutting edge referral schemes are able to gain a big advantage as a result.

"Using the buddy system" caught my attention because it expands both on why such schemes hit the mark when it comes to attracting candidates... and also quantifies the potential impact of such schemes. One example is given in which a firm is recruiting 30% of its new hires through friends of friends.

Since Top-Consultant will only ever be one component of a firm's recruitment strategy, I find these types of insights fascinating - and I hope you do too. Click the link above for the full article.

Rgds, Tony

posted by Tony Restell (Top-Consultant.com) @ 9:46 AM  

15 Comments:

  • At 10:17 PM, Anonymous Anonymous said…

    Isn't this essentially called "nepotism"?

     

  • At 11:57 AM, Anonymous Anonymous said…

    Nope - it's called networking and referring people you trust not to let you down.

     

  • At 9:54 AM, Anonymous Anonymous said…

    Thank goodness we now understand the difference then! So you can select your family and friends for jobs, call it "networking", and explain that you've done it because you can trust them not to let you down; then it is not nepotism. I am glad I understand that now.

     

  • At 5:32 PM, Anonymous Anonymous said…

    The key difference between a nepotistic hiring decision and a networking hiring decision is the track record of the candidate. In nepotism, the sole qualification of concern is the relationship to the decision-maker. When networking for a candidate to fill a position, a known resource is almost always preferable to an unknown. This is especially true in consulting where demonstrated ability to build and maintain relationships is a key skill. In my experience, unknown candidates are favored when their proven relationships virtually guarantee a higher volume of new client business than known candidates can prove.

     

  • At 12:15 PM, Anonymous Anonymous said…

    Actually, cronyism would be the correct term for hiring people based on relationship alone and without regard for competence.

     

  • At 7:42 PM, Anonymous Anonymous said…

    Surely one of the difficulties with this sort of practice (whether or not it is in fact cronyism or nepotistic) is that if you hire someone you know well and have some sort of non-business or personal relationship with, even though you may feel they are a better bet than an unknown recruit, and will not let you down because you know them, the issue of control and management can be much more difficult?

    For example if your friend or associate you have hired makes a serious error of professional judgement and then something goes badly pear shaped, how do you censure them? Your relationship can make this very difficult or even impossible, particularly if the disaster is so serious that you need to fire them! They may well expect you to overlook the resulting business disaster and even the financial loss resulting, because of your relationship, and not to censure them. You could be forced into having to bear all or some of the blame for it yourself in such circumstances.

    I believe in fact, and have found in practice, that the optimal way of recruiting key staff is to take a suitable individual on an interim or short contract basis first. After 4 months or so you can see how they actually work on the job, how capable they really are and whether they actually perform well, within your particular environment and with the local constraints.

    Such an individual then recruited to your staff is completely manageable by you and does not expect any favours in overlooking any errors of judgement by them personally. Much less risky that way I feel! Far better than even weekend team event charade-type selection.

     

  • At 3:30 PM, Anonymous Anonymous said…

    Wrestling with a pig will only get you dirty and the pig will like it!

     

  • At 10:23 AM, Anonymous Anonymous said…

    What kinds of firms do the people making comments come from?

    Our referral system pays a substantial cash sum to the referrer once the new employee has been in place for 6 months.

    But it does not bypass our normal recruiting process. It is basically a bypass to the CV screening process.

    The track record of referees says that our associates won't refer someone who is not really good because they want to work with good people and don't want to feel responsible for a bad hire. Also referees have good fit and good retention because they have a real understanding of our firm and culture from their friend.

    Of course if you don't have a structured hiring process and just choose people based on gut feel from an unstructured interview you deserve all the problems you get whether from referees or not.

     

  • At 1:31 PM, Anonymous Dave said…

    I agree with Anon 10:23.

    All of the big consulting firms now offer substantial financial incentives for employees to refer candidates, many having a target of hiring over 50% from referrals over the next couple of years.

    Individuals referring candidates, in my experience, refer talented individuals that they have worked with in the past and whose performance they expect to reflect positively on themselves. They also tend to refer individuals with whom they are friends, and therefore more likely to fit the corporate culture.

    However, all of this is simply a source of potential candidates, and does not bypass the subsequent stages of a rigorous interview process.

     

  • At 12:51 PM, Anonymous Anonymous said…

    Well Dave,

    As anyone who has studied and qualified at a good business school will know, the interview no matter how rigorous is the least reliable of all tools which may be used in the recruitment and selection process.

    Its main weakness is that those who have good dramatic abilities can learn, practice and hone techniques which can easily be performed at interviews to fool amateur or inexperienced managers selecting staff. (Bit like the film "I Was Monty's Double" really!)

    Heavy reliance on even rigorous interviews as a key component in selection is inevitably doomed to produce at the very least mediocrity and at the worst an instant Peter Principal situation.

     

  • At 11:17 AM, Anonymous Mike said…

    I have often found the practice of referring friends to be one that overcomes the HR weaknesses and the risk-averse nature of the consulting business.

    I would have to say that the referral network produces the less satisfying results than hiring unknowns.

    A "name" has greater freedom to fail than a 'no-name". That is why many executives hire "brand name" consultants - if they fail, the client is less suspect in colleagues' eyes for hiring them. If a boutique fails, the hiring client's decision can be found to be less than stellar by colleagues.

    I have been on many projects where the same thinking applies. "Name" hires came in and did literally crap work, BUT because they were a "name", they were excused.

    I personally prefer to not hire "friends of friends" because cronyism is very difficult to overcome. I will interview them and put them in the pot like anyone else, but I don't want to know who they are and I don't want to know why they knew about the job.

    That practice, I find, has served me well. Hiring friends of friends, in my experience, has raised distracting, difficult to manage situations.

     

  • At 1:58 AM, Anonymous Baskerville said…

    unbelievable.."you are the friend of my friend = you are good"..Sorry but I have the suspect someone here doesn´t understand the meaning of equations...

     

  • At 11:19 PM, Anonymous Anonymous said…

    I work with a consulting firm that offers big cash rewards for referring candidates. I don't see any problem with that. Of course companies don't always hire people just because they have been referred by a current employee. Sometimes finding a candidate with a specific skill set can be really challenging and within a short time frame. It could amount to loosing business with your current client or your competitor getting a foot hold into your client base if he can provide one. So they dangle that cash carrot out there to make you feel more proactive making that phone call to your buddy who fits the bill.

     

  • At 4:50 PM, Anonymous Anonymous said…

    I do not have a problem with hiring friends until the hiring process becomes unfair. Barriers are created for those that are already a part of the company who actually deserve promotions and positions in which friends are being placed in. When hiring friends that are not qualified for positions this presents a major problem. It creates an environment of distrust and low employee moral. This is the case because hiring officers are then seen as unfair and unfit for their positions especially when the new hires do not perform well. Cronyism is practiced too often in my current work environment and it really come across as an unfair practice. This is the case because instead of the deserving internal candidates being rewarded with promotions; friends who are not happy in their current positions are invited in and hired without a thorough review of qualifications. If hiring your friends is a constant practice this then can comes across as racism or sexism especially if all management positions are being filled with one ethnic group or gender. I feel the cronyism makes room for too many delicate issues that could bring much trouble and complication. Essentially there are too many conflicts of interests.

     

  • At 4:56 AM, Anonymous Anonymous said…

    I work for a clinical research company where over half of their permanent employees are friends of the general manager. This has created an extremely hostile working environment for those of us who are
    not in the "clique".

    Likewise it protects the general manager from negative comments since he is a friend of the owner and everyone is afraid to make any complaint about his unprofessional behaviour in the office . He also frequently covers for himself and his friends by lying with no one to contradict him.

    Many of the people who have been hired because they were "friends" have absolutely no experience or background in this business. Some have been swim teachers, waitresses, next door neighbors, etc. Remember-- this is a clinical research company that works with people who have severe Mental illness. What can I do. I like my job but hate communicating with the office folks.

     

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