Recruiting Metrics: Be Careful, Source of Hire Statistics Can Be Misleading

I recently read an article on ERE.net titled “Why ‘Source of Hire’ Should Drive a Company’s Talent Acquisition Strategy” by Lou Adler, CEO and founder of The Adler Group, a performance-based hiring consultancy. For those of you who are not familiar with recruiting jargon, “source of hire” is the avenue from which a candidate came. Ex: If you hire a candidate from a referral, the source of hire is referral. If you hire a candidate who applied to a role online, the source of hire is job posting. Easy enough, right?
The article got me thinking, how much emphasis are we putting on source of hire statistics, and what is the data really telling us? Does the data mean anything? In my humble opinion, no.

The Problem with Source of Hire Statistics

Looking at Adler’s source of hire stats (culled from a survey he conducted with over 1,500 employees), it would seem that most hires come from networking with internal moves (i.e. promotion or moving within one’s company) as a not-so-close second. Let me be the first to say that data like this floating around the Internet is not teaching us anything about hiring.
We as readers are not even privy to who the sampling was taken from (aside from the general fact that they are “U.S. company employees”). It worries me that expansion-stage companies may be reading articles like this and thinking, “Wow, we really should rely heavily on networking to get our employees and spend less time and resources dedicated to posting jobs.” No, no, no, no, no … and no.
Start-ups, expansion-stage companies, and, well, any company for that matter should be covering their bases when recruiting for top talent.
From the article’s point of view, it seems that it is up to the recruiter to network. FALSE. It is up to the entire organization to get the word out about openings in the company. Referral programs can help, but at the end of the day if your employees are happy they will communicate that with their network and create interest.
Another point to communicate is the importance of job postings. The graph would have you believe that it is one of the least productive ways to get candidates. Well no, it isn’t. It just requires work and patience on the recruiter’s part. Granted, there are many unqualified applicants that can and will apply, but there are also people who have genuine interest in your company who may not have a way to get in through networking. Trust me when I tell you to read through all of those resumes.

The Bottom Line

While statistics can help us in many ways, it is important that you pay attention to the details of any study you come across and do not jump to use them as a benchmark for your hiring. You may find that you can subsist exclusively off of referrals, or you may never get a hirable referral and may lean on your recruiter to do sourcing on your behalf. Whatever the case may be, at an early-stage company you need to keep all of your options open when it comes to sourcing candidates.

How does your company find qualified candidates? Do you agree with the results of Adler’s study?