LinkedIn's new product might change recruitment forever.

It's commonplace for businesses to run referral programs, where employees get commission for bringing in new talent. But HR teams still struggle to get employees to engage with the programs. LinkedIn's new product "Referrals" is looking to change all that. 

What is Referrals?

Eddie Vivas, LinkedIn's Head of Talent Solutions sums it up nicely: “I’m thrilled to introduce LinkedIn Referrals – our brand new referrals product that makes it dead simple for employees to make quality referrals, and helps you unlock your employees’ networks to hire the best talent faster.”

From November 1st every business will be able to have its own ”LinkedIn Referrals” site. The site tells employees which of their first-degree connections are matches for a job and sends a summary of matches to employees via email every two weeks to encourage engagement.

Employees can then choose to send links to job openings to these connections as well as post about them on their social networks. Most importantly the product makes it easier for firms to track referrals, measure employee engagement and communicate with employees about the process. 


The product also keeps employees updated with the status of their referral - like a live score card - allowing them to see their influence even in massive companies. Employees can see whether their connection applied for the job, completed an interviewed, was extended an offer or was hired. It's a sensible, modern day approach to referrals and it makes the process more interesting for all parties. 

Why now?

LinkedIn has spotted a sweet spot in the market. On the one hand about 80% of recruiters think referrals are the best way to recruit quality candidates. Employees who have been referred perform better, stay longer, and are a better cultural fit. But the referral process is often cumbersome, meaning that employee engagement is difficult.  Making a referral requires employees to know about job openings in the first place. Less than 20% of recruiters are satisfied with the level of employee involvement in their referral process.


The new product makes sense then. Particularly when you add in the fact that talent solutions represents LinkedIn’s largest source of revenue. In the three months ending June 30, revenue in that unit was $443 million, up 38% from the same period a year earlier. In July, LinkedIn said full-year revenue will be about $2.94 billion, according to Forbes.

It's already widely accepted that social media is playing a large role in recruitment already. Over three quarters of businesses have recruited successfully via social media. LinkedIn in particular is already largely associated with job searching. Referrals, therefore, is a logical next step for the company and one that should bear fruit for HR teams around the world.