Ploymint

“It’s not what you know, it’s who you know.”

This is one of the most common networking clichés in the business world. But according to research from top minds at MIT and the Federal Reserve Bank of New York, who you know is much more important than what you know when it comes to applying for a job. In fact, job referrals are what recruiters look for first when scouting candidates.

The Proof is in the Data

According to the findings of the aforementioned research, only 6% of total applicants come from a referral. While that’s not an impressive number on its own, what’s impressive is over 25% of hires result from that 6% of applicants.

In comparison, that’s a higher percentage than those hired from job boards. That’s amazing considering 60% of applications and 40% of interviews come from job-board postings. Another eye-opening statistic regarding job referrals from that research is that a referral who gets an interview has a 40% higher chance of getting the job.

How Companies are Driving Job Referrals

One challenge in the job refferal system is motivating employees.

According to academic research on employee referral networks, 70% of companies have some form of incentive-based programs to drive employee referrals.

It makes perfect sense, as there is no inherent benefit to the employee for providing a job referral. If their recommendation turns out bad, then it reflects on the employee’s judgement. If the referral turns out good, it still turns out bad for the employee in the sense that he or she has now blurred the lines between work and personal life.

An incentive-based referral system gives employees a way to monetize their network. According to this research, most compensation packages range between $1,000 and $3,000. The package also generally requires the referral to be employed for a certain amount of months before the bonus is paid.

Monetizing Your Network

Now that you know what recruiters look for, you can start to use job referrals to monetize your network. This can be done two ways.

The first is as a job seeker. Given that you know you have a 40% better chance of getting a job through a job referral, go through your network to see who works for a company you’d like to join. The best tool for this is LinkedIn. Reach out to these connections to find inside scoops on job openings within their companies.

The second way to monetize your network is through taking advantage of your company’s job-referral program. This can also be done by being active on LinkedIn. Start going through your network for potential candidates whenever you hear rumblings of an opening. Reach out to these people and get a feel for their interest in the position.

Now that you know what recruiters look for first are job referrals, start networking! After all, your network is your net worth.

I’m always open to growing my network of magnificent millennials. Reach out to me on Twitter @BPucino and say hi!