In a digital world, job referrals provide a human touch
It’s no secret that society is rapidly approaching an age of digitalisation, of the fourth industrial revolution, where almost all sectors and industries stand to change from the influx of technological advancements.
Following this trend, the demand for talent and manpower from the tech sector has grown proportionately as well. Demand for IT professionals is set to increase, with 42,000 workers needed within the industry over the next three years. At the same time, universities are not producing enough graduates to fill in the talent gap.
For example, the government estimates that there are only 400 graduates a year with the right qualifications within the Fintech industry, which is not enough to match the Singapore Fintech Association’s estimate that 1,100 fintech jobs will be added annually.
Inefficiencies in the system
What is there to be done in this case? Is there no hope for the job market? Interestingly, a statistic found by talentlyft reveals that this doesn’t have to be the case.
To elaborate, one must first understand that potential employees in the job market are split into three main categories: Satisfied workers, Active seekers, and Passive seekers.
Satisfied workers are those happy with their current jobs. Active seekers are employees who are actively looking out for new job opportunities, whilst Passive seekers are those who are looking to change their jobs, and may simply be waiting for the right opportunity, or a better offer to come along.
What is interesting however, is the fact that 73% of candidates are classed under the Passive seeker category. This means that there is a large, passive pool of talent that stands to be tapped into. Granted, it will not completely address the tech talent crunch, but it can certainly help.
One way to tap into this large base is through the common practice of job referrals. It’s something that most of us do often, and do well.
After all, basic networking can happen anywhere, be it the nearby coffee shop or at a formal suit and tie event.
Employers have revealed that referred candidates take 55% less time to hire, and that employee referral programs can help save companies around $3,000 per hire.
Aside from saving time and money, most (88%) employers have also stated that referrals are the best way to secure above average hires.
Referred employees are also more likely to stay at a job for a longer period of time, as compared to those who are hired via job boards.
However, these stats are not actually very surprising. After all, a referred employee is much more likely to fit into the job position and is probably better suited for the job, considering how he or she has been specifically singled out and deemed appropriate for the position by a fellow colleague.
Even a single tech employee is likely to know of someone within the field looking for a job, even if they aren’t actively searching for one themselves. Hence, everyone stands to contribute to the job referral market.
Yet, according to statistics provided by Jobvite, whilst referrals make up 40% of all successful hires, only 7% of job applications come from referrals.
What this suggests is that the job referral avenue is being grossly neglected, perhaps due to inefficiency. The question to ask then, is why the inefficiency?
A problem of scale
According to a Singapore Business Federation survey, one in four companies are “slow to transform their business”.
This is simply because many companies lack the transformation capacity, be it in terms of manpower or company bandwidth to make the necessary changes required to put in place an efficient employee referral system.
This is especially true for smaller scale SME’s, which simply lack the resources to mount an effective referral program.
Failing this, companies have no choice but to either look to the government for help, or turn to foreign talent for tech employment solutions.
However, none of these are sure-fire methods to address a company’s tech crunch issues, at least in the near-future.
How then, should companies make employees take job referrals more seriously? One way, of course, is to offer monetary rewards for every successful hire, which will inevitably cause employees both current and potential to take the process more seriously.
At the end of the day, it is ironically the human factor that has the potential to solve society’s data crunch problem. To receive any sort of referral, one must first get to know the referee.
Job portals and referral platforms are not one stop solutions for your employee searching or job hunting woes. First, you have to expand your network.
Go outside, attend networking events, make friends organically and not simply for the sake of finding opportunities for yourself.
Keep at it, and opportunities will inevitably turn up.