Why TrustLogics’ P2P Hiring Model Is The Key To Creating A Vibrant Workforce
Recruiters will satisfy workforce needs proactively, reduce hiring costs, and gain access to a global and deep talent pool.
Recruiters of most organizations tend to experience a common dream: one of their trusted employees or recruitment agencies stepping forward to vouch for a candidate and wholeheartedly endorse them for an internal job opening.
For a long time, existing employees as well as third-party recruiting agencies have served as ideal referral sources when it comes to hiring new employees. For example, in 2011, around half of all U.S. jobs were filled through informal networks or social contacts 1.
The latest statistics suggest that referrals have maintained their high popularity levels in the world of recruitment and staffing 2.
1. 34% of U.S. recruiters consider the best source of hires to be referrals.
2. Referred candidates are 5 times more likely to get the job on average.
3. An applicant’s chances of landing a job is 13 times better through a referral than via traditional or online job boards.
The Logic Behind Referral Recruitment
So why is referral recruitment so highly valued by both recruiters and jobseekers by nearly every industry?
This line of thinking was aggressively studied and analyzed by one study involving wildly different industries like Call Centers (350,000 applicants and 74,000 hires), Trucking (900 new drivers), and High-Tech (25,000 workers and 1.4 million applicants) 3.
And its findings were surprising:
1. Referred candidates are more likely to show loyalty (or less likely to quit) towards the organization than non-referred candidates, and in turn boost employee retention levels.
2. Due to factors like low turnover, higher productivity and less cost of recruitment, referred candidates yield higher profits per worker than do non-referred candidates.
But as companies steadily grew their reliance on referral schemes for recruitment, some major drawbacks began popping up.
1. Lack of Diversity in Workforce: If a company’s workforce is dominated by any particular subset of people, for example white males, then a large majority of referrals it receives will simply be more white males. In such a situation, workforce diversity takes a huge hit. Relying too heavily on employee referrals might lead to a homogenized talent pool and the formation of dangerous cliques.
2. Referral Network Limitations: Unless a company is growing aggressively, its referral network remains largely stagnant and limited. For example, under the assumption that each employee can come up with 5 high quality referrals, a workforce of 100 employees can only come up with 500 solid referrals at best. Recruiters face insurmountable mathematical limitations in such scenarios.
3. Breakdown of Interview Process: In an ideal world, every candidate — whether she/he is an internal referral or someone from a job board — undergoes a stringent interview and testing process. But the sad fact of reality is that internal referrals tend to get an easier ride simply because of their personal connection with one of the existing employees, or due to the unconscious bias exhibited by hiring managers.
4. High Cost of External Agency Referrals: While employee referral recruitment costs next to nothing, recruitment via third-party staffing agencies involves the payment of a finder’s fee — usually around 25% of an employee’s annual salary. For example, a company would have to cough up $25,000 for hiring an externally referred candidate whose annual salary stands at $100,000. Such costs cannot be sustained by an organization in the long-run.
The TrustLogics Solution
TrustLogics deals with all of the traditional referral drawbacks mentioned above with one single service: Peer-to-Peer Hiring Model on blockchain.
A Global Referral Network: On the TrustLogics platform, when a recruiter places a new job posting, every Peer on the platform turns into a source for referrals. Regardless of whether a Peer is a fellow recruiter, a jobseeker, or a professional looking to build relationships, they can all suggest high quality candidates for a job posting from anywhere in the world. This increases a company’s referral network exponentially and makes it truly global.
Vibrant & Diverse Workforce: Since any Peer can make a referral, companies on the TrustLogics platform can also put their workforce diversity problems to bed. The referred candidates are highly likely to come from a wide variety of backgrounds or minority groups since they would reflect the acquaintances of millions of diversely-located Peers on the TrustLogics platform.
Rigorous Testing of Candidates: While interviewing a TrustLogics referred candidate, companies can maintain the rigorousness of their interview process by maintaining an emotional distance, unlike an internally referred candidate. The element of unconscious bias is eliminated while interviewing or testing externally referred, high-quality jobseekers.
Death of Pesky Finder’s Fees: In the future, thanks to TrustLogics, companies can completely avoid utilizing the services of recruitment or staffing agencies as well as the costs associated with them. Instead of paying 25% of a referred candidate’s annual salary to such agencies, recruiters can simply place a job posting and an affordable or appropriate bounty to go along with it on the TrustLogics platform. Once they successfully hire a capable candidate, the bounty is appropriately divided among: the hired candidate, the person who referred the successful candidate, the candidates who were called in for an interview, and the individuals who referred the shortlisted candidates. The distribution of bounty is ensured through the execution of secure Smart Contracts.
For more details on how our P2P Hiring Model works on Blockchain, please visit https://trustlogics.io
By increasing the accessible talent pool through TrustLogics, recruiters can even avoid their future workload or burden. Instead of simply reacting to workforce needs, they can proactively hire candidates just when, or even before the need arises.
For example, when a recruiter places a job posting for a PHP developer on our platform, they might be flooded with hundreds of referrals from across the world. They might end up narrowing down this long list to a dozen solid candidates, from which one ideal candidate is hired.
In the future, recruiters can avoid going through the same process again and simply start by checking the availability and contacting the previously shortlisted 11 unlucky candidates. Thus, companies can always maintain a back-up list of high-quality candidates in case of emergency requirements or proactively satisfying their workforce needs.
You can read our whitepaper by clicking on this link: https://trustlogics.io/whitepaper.pdf
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