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Talent sourcing from social media

Talent Sourcing from LinkedIn, GitHub, Instagram and FB

By Fintros — June 2017

Finding new employees through internal referrals can provide many benefits to a firm. They can ensure employment relationships that are more stable, productive, and profitable, while helping highly-skilled workers find more productive employment. But hiring through social networks - whether old-school or online - can also hurt workplace diversity, a study has found.

In a recent paper, University of Georgia economist Ian Schmutte found that while social network referrals can be beneficial, they can also be reinforce workplace homogeneity along racial, ethnic, and socio-economic lines.

Social networks, can help make labor markets become more efficient, he says. They can “help ‘grease the wheels’ of a labor market that can be beset by a range of information problems,” adding that “generally, these networks can speed up the rate at which workers and firms find each other.”

This can be a cost-effective recruitment method to identify potential employees from within existing employees’ networks, and firms often provide employees with a financial bonus for successful referrals. An added benefit is that they can facilitate employment relationships that are more stable, productive, and profitable, Schmutte says.

However social networks develop around people who are from similar social, racial, and economic backgrounds. This tendency for people to associate with similar others is known as homophily - often phrased nontechnically as \"birds of a feather flock together” - and it has both upsides and downsides.

“On the one hand, because of the effect of homophily on unobserved characteristics - such as punctuality, discipline - good workers might be more likely to know other good workers. If so, then referrals perform a screening role,” he says. “On the other hand, if social networks are stratified by race, ethnicity, and economic status, then referral networks can reinforce between-group inequality.”

Another problem with internal referrals is that it produces a very narrow candidate pool, with the number of candidates being highly limited to compared to a broad search method. While ad placements on job boards may result in an excess of applications, the limited reach of social networks means that the majority of top talent will not even know about openings.

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