Do you know someone?

By ALFRED BRANCH JR.

Human resource managers from 70 area companies favor employee referrals to any other method when recruiting new workers, according to a recently released survey by the Southern Connecticut Chapter of the Society for Human Resource Management (SOCT SHRM).

Nearly 70 percent of respondents said they prefer their employees to refer new hires, while about 50 percent said they also like to use regional-based Web sites, such as FairfieldCountyJobs.com & WestchesterCountyJobs.com, to recruit workers. A close third in preference, with just fewer than 50 percent, was national employment Web sites, such as monster.com, hotjobs.com and careerbuilder.com, followed by newspaper advertising a distant fourth with about 22 percent of HR managers saying they use them.

Perhaps the biggest surprise, however, was that employment agencies did not even receive 20 percent favorability among managers, but David Lewis, vice president of SOCT SHRM, who conducted the survey with fellow vice president Will Brewer, says agencies partly suffer from the current economic climate.

"The times we're in are directly reflected in this survey," Lewis says. "If this were 1999, when the job market was extremely tight, the results might be different. Back then, agencies were vital for finding good new hires. Nowadays, there are lots of potential employees out there."

In addition, companies have been slashing HR budgets for the past few years so the managers of these departments are searching for less expensive ways to attract talent, Lewis added. Using employment agencies can cost a firm thousands of dollars, but companies often pay between $500 and $2,000 to employees for solid referrals that stay for six months or more, and the company still saves money.

The same could be said for the preference of local Web sites to the national ones, because as Maureen Mackey, an 18-year veteran of staffing and employment agencies, says a contract with a local employment site can cost a fraction of what the national ones do. Also, local sites tend to attract better potential hires. "With one of the national sites, an employer might receive more than a hundred responses and a lot of those might be from Europe, California, the Midwest, wherever. A company then has to weed through all these resumes, which can be very time-consuming," Mackey says, adding that with FairfieldCountyJobs.com, for example, a company might receive less than 25 responses but a higher percentage will be better qualified and closer geographically.

For these HR managers, they prefer employee referrals because it acts as a pre-screen of a potential hire, Brewer says. "Employers are constantly looking for cost-effective ways to do things, and offering incentives to its workers to help the company find new hires is a trend that is very easy."

As for employment agencies, Brewer is not down on them, but he says the Web has made the environment more competitive and that agencies need to be more creative and professional in how they attract clients and potential workers for those clients. Lewis adds that companies that ignore employment agencies altogether do so at their own peril. Agencies tend to recruit experienced workers while employees tend to refer people who may not have the most experience in a given position, therefore the referred employee might require more training, which could end up costing more than it would to have used an agency in the first place.

Mackey, who is also president of SOCT SHRM, says that despite the low score that employment agencies received, they will remain an important part of the hiring process. "What this survey told me is that diversification is the key. Employers need lots of options."

Originally Published in the Fairfield County Business Journal on October 24th, 2005.