Life after Facebook: Entrepreneurs

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Ever since its founding in 2004, Facebook has been fighting competitively with many other big corporations for the best talents, offering unique benefits and perks. However, as time goes on, many of Facebook’s employees make the bold decision to leave the paradise that Facebook has created. Is there a greater opportunity than what Facebook offers to their employees? At Careerify, we used our platform to observe that more than 10% of former Facebook employees (FB-ers’ for short) decide to start their own companies. Of the 113 CEOs that we observed, we decided to feature 9 of the more known start-ups in a timeline-formed infographic based on Facebook’s corporate milestones.

 

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Of the 113 CEOs that we observed, over 10% are Stanford University Alumni. And 27% of the start-ups founded by former FB-ers’, are located in the San Francisco Area/Palo Alto area (indication of the strong hold that the Silicon Valley has on their residents). According to Angel List data, those that have listed their start-up average a valuation of $4.6M, trailing only MySpace ($5.5M), Google ($5.2M), PayPal ($5.2M), Adobe ($5.2M),  Apple ($4.8M),  Accenture ($4.8M), Electronic Arts ($4.8M), and Sun ($4.7M). Facebook founders are also likely to raise higher than the average entrepreneur in the US.

The success of Facebook has inspired and motivated many, including their own, to pursue their dreams. As Facebook continues to breed talent, who knows, perhaps it will be a former FB-er who will become the next Mark Zuckerberg. What does Zuckerberg himself have to say about this?

While many companies may bemoan that great talent is leaving, Facebook promotes entrepreneurism, as illustrated by their CEO’s quote:  “If people want to come for a few years and move on and build something great, that’s something we’re proud of.” If more companies embrace this notion, perhaps it could lead to an economy where unemployment is eliminated once and for all.

Putting a Prohibition on Probation Periods for Employee Referrals

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Probation periods discourage employees from using your employee referral program, so why do companies even bother with them? Of the 1,100 employers that Careerify surveyed, the rationale for implementing and maintaining probation periods for employee referrals varied but few had merit. While corporations claim to have logic to preserving this practice, only the companies with truly “temporary” workforces (note: we classify “temporary” as those employees hired for ad-hoc work) had rhyme to reason.  But, if you fall into the former category, you are amongst the 99.9% surveyed.

So what did the 99.9% have to say?

The top response from Fortune 25 CHROs and Talent Acquisition leaders for maintaining probation periods was, “it was here when I got here.”  While we appreciate the candor, history should not write the future!

Employee Referral probation periods finally ends at last!

Employee Referral Probation Periods no more!

Some of the other top reasons why companies still implement this age-old policy include:

  1. Do not want employees to take advantage of the employee referral program.
  2. To ensure the best quality of candidates are hired
  3. Receive ROI for the cost of recruiting
  4. To align with the probation period of the new employee

Let’s explore each of these points in more detail.

Reason #1: Employees taking advantage of the system.

On the rare occasion, an employee can take advantage of the employee referral program. The employee realizes there is no probation period and therefore requests one of his/her friends to apply, go through the interview process and get hired, only to quit early on. The employee will receive the bonus and will likely split any earnings with his/her friend. But, the likelihood of this happening is next to none.

Employees have their integrity and reputation on the line, which matters far more than some cash. Further, the complexity of having a friend apply for a position, interview, and get hired, only to quit for the purposes of gaining a few extra bucks, is outlandish and outside their control.

The exception to the rule? Employers with a large percentage of temporary workers and high turnover may be subject to some employees gaming the system, though still rare. In these cases, employers should be more focused on identifying the root-cause of employee attrition, rather than implementing a probation policy.

Reason #2: Using probation periods to hire the best quality candidates

Undoubtedly, employers want to hire the best talent possible and want their employees to refer only the best candidates. The mark is missed when probation periods are used as a tool to further screen freshly hired candidates. The process for hiring a candidate is strenuous, including a string of interviews to ensure cultural and technical fit conducted by a myriad of trusted people within the organization. Shouldn’t the screening be over when the candidate is hired? And, is the employee who provided the referral really the person that should be penalized if the candidate isn’t the right fit? The referral process should not signal mistrust to the employee providing the referral; rather, it should be a positive experience that encourages employees to refer again.

Reason #3: Ensuring ROI on recruitment costs

The cost of hiring a candidate will always be forgone in all other sources of hire, so why treat employee referrals any different? For instance, if you were to purchase a posting for a job board, it is done so upfront. Regardless of whether the candidate is hired from that source…and succeeds past the probation period, the cost is forgone.

While some may argue that in the case of employee referrals, the cost is controllable (i.e., a company can “wait and see” past the probation period unlike a hire from a job board), should companies’ penny pinch when it comes to employee engagement? A happy employee is more likely to refer candidates again… isn’t that ROI?

Reason #4: To align with the probation period of the new employee

Some respondents noted that an award should be aligned with a new hire’s probation period. While benefits such as dental, massages, stock options and other neat perks are provided once the employee completes probation, should granting a referral award to an existing employee occur at this time too? This appears to be more of a misalignment as the existing employee has (likely) already passed his/her probation period and is being penalized for something that is outside his/her span of control. Further, even if the new hire is terminated before the expiration of his/her probation period, the employee referral bonus is insignificant when compared to other costs incurred with respect to the hire (e.g., salary, benefits, etc). Although the point here is obvious, it would be more logical to award the existing employee the referral bonus at the time the hire is made.

Immediate feedback and recognition is now an expectation. We go on Amazon and purchase a product in one click, and receive a package the next day. We post on Facebook only to receive feedback from our immediate network in the same day, sometimes within seconds. Companies are migrating from annual performance reviews to immediate feedback reviews.

But for referrals, much is unchanged. An employee waits for his/her referral to complete an interview (3-12 weeks turnaround), negotiations and acceptance (1-4 week turnaround), start their new job (0-10 week turnaround), and then undergo a probation period (0-52 week turnaround). While we understand that candidates have to fulfill certain milestones throughout the hiring process, perhaps alternative methods could be used to keep the referring employee engaged throughout the process (i.e., incremental rewards for each milestone, public recognition, etc).

We would love to hear why you and/or your company instilled a probation period when it comes to employee referrals, and whether you’re undertaking any efforts to eliminate or “prohibit” the policy.

A company that does Social Recruitment right: Ernst & Young

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Ernst & Young is a pioneer in using social media for human resources and communication. By 2011, Ernst & Young predicts more than half of its workforce will be Generation Y. And with 84 per cent of Generation Y on social networks, according to research firm Accenture, Ernst & Young knew social media would be an essential part of its recruitment strategy— especially if it wanted to differentiate itself from competitors in the accounting and tax industry.

In August 2006, Ernst & Young embarked on a journey into the world of social networking and, in particular, Facebook. At this time Facebook was predominantly a social network for college students.

At first, the company received mixed reactions from students on Facebook, some of whom felt the company was invading their personal space, said Dan Black, campus recruitment leader of Ernst &Young. But the professional services firm won over students’ trust by following its own rule that Facebook is a place to connect for social purposes and not a tool to check up on potential recruits by viewing their personal profiles. Instead, the Ernst & Young Careers Facebook page has become a place where people can come and ask recruiters questions about career planning and applying for jobs. In fact, recruiters, hiring managers, employees and alumni all answer questions posted by Ernst & Young Careers’ more than 116,900+ likes on Facebook. The page also offers articles and tips on interviews, resumes, and other relevant information for the accounting world.

Unlike newspaper advertisements, regular media and job boards, social media allows for two-way communication where employers can access candidates, talk with them prior to the interview and, most importantly, direct them to the right opportunities. All it takes is a couple of minutes of a recruiter’s time and the company will end up with an appreciative candidate who will likely turn into an active fan or ambassador for the organization.

Here’s a post from a candidate on the Ernst & Young Careers page and the recruiter’s reply.

Original post:
Hi E&Y, I am currently studying econ at UCSB and I am very career minded. Can you give me any info/advice that would help me to pursue my goals at E&Y, or in the job market in general? Thank you

Reply:
Hi Matt-
I’m the Campus Recruiter for UCSB. Feel free to send me a message through Facebook and we can set up some time to chat. In the interim, I would encourage you to attend as many of the Accounting Society meetings on campus as possible, I believe they host them every Wednesday at UCSB. The organization provides an opportunity for many of the firms to talk about information/advice that students are looking for.
Thanks!
Tina M.

In the past, Ernst & Young have developed application called Ernst& Young Connect2U, which gives accounting students a competitive advantage in achieving their career goals. Not only does it connect them with recruiters and advise them on when recruiters will be arriving on campuses across North America, but they get to network with alumni and industry leaders through a roundtable, which Black did monitor on a daily basis. It is these types of innovations that allow Ernst& Young to really push the envelope of social innovation and catch the attention of their core audience.

The firm has moved into other social networking spheres as well. As of April 2, 2013, more than eighty-three percent of the company’s 144,000 staff was on LinkedIn. The company is also on Twitter and is experimenting with some of the newest technologies on the Internet. “We wanted to show candidates we are there for them in various mediums, as it shows candidates our willingness to connect,” says Black. Ernst & Young is truly a role model for corporations looking to jump into the social media world for recruitment.

Do you believe your company does Social Recruitment correctly? Love to hear your stories and share them to the world.

 

Former Blackberry Employees: Where are they now?

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At Careerify, our social engines have searched over 5 million profiles from the World Wide Web and through our applications on such social networks like Facebook and LinkedIn. Being  a proud Canadian start-up, we were curious to know how technology titans such as Blackberry (formerly known as RIM) affected the Canadian landscape from an employee development perspective. Hiring 10,000′s of people across the world, Blackberry has single-handedly developed much of the vibrant Kitchener-Waterloo technology scene. Though Blackberry has restructured and has laid off many talented employees,  we looked at 636 former Blackberry employees within Canada and studied where they are working now.

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Further more, we observed more than 300 of the former BlackBerry employees are now Founders and CEOs of their respective companies. Though BlackBerry is currently hard-pressed to recreate the stranglehold they once had in the smartphone industry, former employees are now prospering.

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Start-ups such as Xtremelabs, Vidyard, Freshbooks, and yes, even Careerify, have benefited from Blackberry’s talent.

Michael Litt, currently the co-founder and CEO of Vidvard, had this to say about his time at Blackberry. “Being a part of the Software Product Management team at BlackBerry gave me insight into managing, filtering and integrating massive volumes of customer data and insight into consumer products. I worked with a fantastic team of people that have now spread into various roles at other large companies and startups in the Waterloo Region.”

Due to Blackberry’s innovation, start-ups like Careerify have elected not to move to Silicon Valley. “The technical talent is on par to the talent in Silicon Valley. We get the same productivity from employees that have a stronger work-life balance, it costs less, and Canadian employees take personal pride in seeing their Canadian start-ups succeed.” said Harpaul Sambhi, CEO of Careerify. “We want to become the next Blackberry and show the world leading innovation can come from Canada.”