An Employee-Referral Program on Steroids

05/20/2015 12:49 am ET | Updated May 19, 2016

If you look back over the history of business, you'll see tremendous improvements in just about every area. In the 1980s and 1990s, for instance, Total Quality Management (TQM) was all the rage before giving way to Six Sigma and ISO 9000. Regardless of moniker, these movements drove countless efficiencies in manufacturing and quality control. Defect rates across corporate America plummeted.

Think about it. Compared to our grandparents, we are spoiled today. We take high-quality goods for granted. Recent automobile recalls like Takata notwithstanding, most companies long ago weeded out defects in their key processes.

Except where they haven't.

Today, organizations' efforts to effectively hire employees by and large remain woefully inadequate. Want proof? LeadershipIQ recently found that 46 percent of new hires fail within their first 18 months.

This galling statistic holds true despite the fact that recruiting has become more scientific--sort of. For a long time now, many HR departments have used behavior-based interviews (BBIs). The theory behind asking about would-be employee behavior is simple: the best performance of the future is the past. Rather than pepper candidates with silly theoretical questions, recruiters get specific.

To be sure, BBIs represent a slight improvement over hypothetical queries such as "Where do you see yourself in five years?" or the laughable, "What's your biggest weakness?" Anyone with a modicum of knowledge on the subject, however, knows that it's easy to game BBIs. For starters, anyone with a smartphone can easily search for questions that individual companies ask for specific positions. Brass tacks: If you really want the job, it's not hard to school yourself on what to tell recruiters and hiring managers. That doesn't mean that you'll necessarily get the job under false pretenses, but you can certainly increase your chances.

Questions rooted in science represent just one tool in a recruiter's box. For decades, many organizations have offered employee-referral programs. To be fair, their results are often generally positive. That's not to say, however, that they can't be improved. Case in point: ERE, an online gathering place for recruiters, reports that, on average, "It takes about 10.4 referrals to make a hire. Some companies are either so picky or get so many referrals that only one referral in 25 or more results in a hire."

Not Your Father's Employee-Referral Program

Fastidious recruiters will always exist, but clearly we can do better than the status quo.

Enter Peercisely, a San Francisco-based startup that aims to fundamentally change how companies fill their open positions. Think of Peercisely as a massive, democratic, employee-referral program on steroids.

At a high level, the company harnesses four powerful forces:

  • The most effective method of recruiting (personal referrals)
  • Arguably the most powerful and detailed source of knowledge and insights (the social network)
  • The power of good old-fashioned economic incentives.
  • The desire to do good.

In effect, Peercisely lets anyone can work as a part-time recruiter or referrer--and get paid for doing so. In this regard, the company is another compelling addition to the blistering on-demand economy, along with Uber, Lyft, TaskRabbit, Alfred, and hundreds of others.

"Employee referrals drive over 50 percent of hires in the San Francisco Bay area. Why not 100 percent?", asks Arek Sokol, Peercisely's founder and CEO. "Companies spend less on recruiting and hire better employees who stay in their new jobs longer. For their part, candidates help their peers find new opportunities and get some cash in their pocket. Everybody wins."