SAN FRANCISCO — With job openings few and far between, it's more important than ever that job seekers' strategy is on target — and networking should be the basis of that strategy. • Rather than sitting in front of a computer, searching online postings and blindly sending out dozens or hundreds of resumes, job hunters have a better chance of success through networking. The adage, "It's not what you know, but who you know" is more accurate than ever.
The more time you devote to networking, the higher your probability of finding that elusive job, corporate insiders and job-search experts say. One reason for that: Companies often fill positions by making internal employee referrals part of the company culture. Some firms even make hiring new workers through referrals a strategic goal.
Employee referrals help uncover talent
That's a development job hunters can leverage to their advantage by honing their networking skills. For companies, having current employees recommend new hires gives them access to pools of talent they might not normally attract. And current employees get the opportunity to recommend skilled newcomers and reap cash bonuses and internal recognition.
"Prudential has always viewed their employees as talent ambassadors. Our employees are an excellent source for referrals," said Peter Price, director of global communications for Prudential Financial Inc.
Prudential employees earn between $500 and $2,500 for each successful referral, depending on the job level. Hiring managers are not required to hire a referral over a more qualified candidate — decisions are based on skills, experience and qualifications. But "serious consideration is given to those candidates who are referred by Prudential employees," Price said.
At Vistaprint, the company's "Everyone Here is a Recruiter" program, launched in late 2006, offers a $1,500 referral award for each successful hire, and a home theater system for the employee with the most referrals hired.
"At the end of that first year of the program, employee referrals jumped from 19 percent to 42 percent," said Kevin Murray, director of recruiting at the firm. Vistaprint USA Inc., a print company focused on business cards and brochures, is a subsidiary of Vistaprint N.V.
"By 2008, employee referrals had grown to 48 percent of all new hires. The program is on track to pass that number this year," he said.
New hires and old friends
Will Robinson, a job coach in Arlington, Mass., said in this economic downturn he has seen a growing number of new hires coming from employee referrals
"In some companies, as many as 75 percent of placements are done through networking," Robinson said. "Employee referrals are hugely important to companies. They are even more important in a soft economy, when companies are flooded with resumes, and many of them are bad resumes."
From the organization's perspective, employee referrals are extremely valuable, said Alexandra Levit, author of New Job, New You: A Guide to Reinventing Yourself in a Bright New Career.
"Not only do you receive a steady stream of qualified applicants without having to spend big dollars on recruiting, but those applicants come with built-in, trusted references," said Levit, who is working with the Labor Department on a plan to make American workers more competitive in the job market.
Many companies consider employee referrals so important they mandate a specific percentage of positions be filled by referral, and human-resources representatives have to meet quotas, Levit said. That creates opportunities for anyone wanting to work at those companies: Networking with the right people can help get your resume in front of someone who actually wants to see it.
A win-win situation for everyone
Employee referrals also help cut the cost of finding candidates, said Prudential's Price. "In most cases, the awards that are paid out for an employee referral will be significantly less than the cost of other sourcing methods, like advertising."
While the extra cash is a strong incentive for employees to suggest qualified candidates, it's not the main draw of employee-referral programs.
"Employees are definitely motivated by the bonus, but I think they also want to do something that helps a person in need and their organization at the same time," Levit said. Making a successful recommendation not only helps the company; it also helps the reputation of the employee who made it, Levit said.
"I am an individual with a success story," said Kindra Hall, vice president of sales at Orenda International, a Tempe, Ariz.-based natural health product marketing company. "I am the one who has offered the insider's referral. So far, my company has hired all three of the referrals I've made.
"I want to make sure that I'm working with the best people, that my team is strong," Hall said. "Though a bonus would be nice, I was more motivated by what the referred person could do for the growth of the company and therefore my future income."
Aim for target companies
Many job seekers don't realize most openings aren't advertised, Levit said. Many businesses prefer to hire from within the company or through word-of-mouth. "If you're coming in from off the street, you could be out of luck," she said.
While job seekers should use all the tried and true networking techniques, those looking for work should never stalk someone in a bid to network, Levit said.
Instead, practice what Levit calls the 3/6 rule. "Contact the person three times over a period of six weeks, and if you don't hear back, move on to someone else who will be more open to helping you."
Vistaprint's Murray said job seekers tend to overlook their college or university's alumni resources. Many schools have a dedicated alumni site linked to the larger school Web site, which often includes access to online job boards and discussion forums, and information on alumni networking events all over the country.
Robinson, the job coach, said people should spend 75 percent of their search time networking, and job hunters should use a "targeted company" networking strategy. You first target companies you want to work for and then network to find people in those companies who can eventually tell you about job openings, and ideally, refer you for a spot.
Said Robinson: "Instead of . . . blasting resumes out to every company that may have an opening, you first identify target companies — usually 10 — and start a networking strategy to find individuals in these companies."