Referrals, : The Holy Grail of Recruiting

A critical aspect for organizational performance is recruiting “the right” people. Great talent serves as a foundation for great companies and a strong pool of candidates is a prerequisite for success. It is furthermore necessary to have an effective recruitment process in order to attract high quality candidates. Slow-paced recruiting processes may serve as a bottleneck to growth meanwhile an effective recruitment process within an organization speaks volumes about the company. It is a direct reflection of the professionalism and validity of the business while leaving its mark on both current and prospective employees. Referral-based recruiting is often referred to as the “holy grail” of recruiting strategies and is an industry term for when a someone, such as a current employee, supplies a candidate from their own network to the recruiter. The strategy capitalizes on the social and professional networks of people in order to generate candidates and is often combined with rewards to incentivize recommendations. Many claims that the recruitment method yields advantages such as increased candidate quality, retention rate and reduced time to hire etc. However, often, these claims are not peer reviewed and lack the empirical evidence to support these claims. This research aims to contribute with knowledge to what role referral-based recruiting plays within Stockholm and to learn more about how the social processes and human elements affects the outcome. Furthermore, how the recruitment method impacts the assessed quality of the candidate pool and recruitment process. A total of six managers active within recruiting in Stockholm has been interviewed for this research. The managers were each asked to describe and evaluate the hiring of five candidates and their respective recruitment process. The empirical results were analyzed in combination to the theoretical framework. Through the analysis, the conclusion was drawn that referral-based recruiting in fact appears to offer unique advantages in comparison to traditional recruiting strategies, such as job-adverts, headhunting and hiring the services of recruitment firms