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For job hunters, gone are the days of circling ads in the newspaper classifieds section. Even internet job boards such as monster.com are tools of the past. Today, recruiting relies more and more on online social networks, such as LinkedIn, Facebook and Twitter.

“Posting jobs is the old way of attracting candidates,” says Rebecca Graham, human resources manager at Enflick, a mobile applications developer in Waterloo, Ontario, Canada. “The majority of our hires have come through referrals, and that is usually through social media.”

In industries such as finance, technology, media and advertising especially, the candidate pool is more passive. The most talented people are not necessarily actively searching for jobs. But companies that may want to hire them now have a variety of technological means to find them, organise them, send them private messages or get their friends to contact them on behalf of the company.

Albert Lai, chief executive of Big Viking Games, a gaming start-up based in London, Ontario, has hired 36 people in the past nine months. He uses an automated social recruiting tool that pushes job postings out through his existing employees’ social networks. So once the human resources department has drafted a job description, employees who have connected to the application will automatically send the post to their personal Twitter and Facebook feeds.

“You can turn all your employees into recruiters by leveraging their social networks,” Mr Lai says. “I have found that employee referrals are the best hires.”

In fact, people who see job ads that are posted by someone they know are twice as likely to apply for the job, and people who are hired through social media connections are twice as likely to stay at the job, says Joseph Fung, chief executive of TribeHR, a human resources management software company in Waterloo, Ontario, that has done research into social media recruiting trends.

The group has found that, among their corporate clients, one-third of the candidates visiting their company websites had come from a social media link, and 58 per cent of CVs submitted originated from a social media link.

“It is because it is coming from that social contract – it is not just an arbitrary company,” Mr Fung says. “If you see the names of people who work there that you know and respect, you are more likely to apply.”

The main internet tool for finding new candidates, used by up to 70 per cent of companies, is LinkedIn. The professional social network has 175m members who have posted their CVs and work histories online.

LinkedIn has had glowing quarterly financial reports since it went public last year, contrary to Wall Street disappointments such as Facebook and Zynga, because of the success of its recruitment products. More than 50 per cent of the company’s revenues come from annual subscriptions that corporations buy to access LinkedIn’s vast pool of candidates, send them email and store information about them in a database.

LinkedIn also sells advertising, which companies have found appealing because of the site’s ability to target adverts directly at people based on their professional skills and connections.

“Your social map defines you,” says Josh Bersin, chief executive of Bersin & Associates, a research firm in Oakland, California. “LinkedIn’s immense data system can show you a job ad that is exactly the job you want. Its results on job advertising are 30 times better than posting job ads on Google.”

Part of the success is the culture LinkedIn has defined for itself as a place for professional networking, says Nikhil Sethi, chief executive of Adaptly, a social media ad buying agency in New York, US. He still places 90 per cent of job ads on LinkedIn and spreads the remainder between Facebook, Twitter and YouTube.

“Just because something is social does not mean it is the only defining attribute about the system,” he says. “It goes to understanding what mindset a consumer is in. On Facebook, they are not there looking for a job.”

But companies must maintain a presence on non-professional social sites, says Ted Elliott, chief executive of Jobscience, a talent management software company based in San Francisco, California, and Londonderry, New Hampshire, as a way to brand and market the company.

This year, according to a Jobscience survey, 36 per cent of US corporations plan to use Facebook for recruiting, to connect and communicate with candidates. This is also where existing employees can become evangelists for a company’s values and perks, posting positive comments about their employer that potential hires will see.

In this sense, social media is having an indirect influence on how companies retain talent. The easy broadcast vehicle forces employers to be good to their workers.

“The same way employees can do a lot of good on social networks, they can do a lot of harm if you don’t treat them well,” Mr Lai says. “You can build a really poor reputation if you don’t treat employees with fairness and respect, because they can go on Twitter and say nasty things and tarnish your reputation.”

LinkedIn’s data can also reveal weaknesses within a company. One Silicon Valley project manager was being recruited by a large enterprise software company. When he went on LinkedIn, he noticed a rash of people who announced they had left the company that was trying to hire him. He concluded something was wrong at the company and turned down the offer.

Social networks present conundrums for candidates, too, especially when it comes to privacy. LinkedIn has become a reliable source for objective references, outside the ones carefully curated and submitted by the candidate, Mr Lai says, which can be a downside for job seekers. But more personal sites, such as Facebook, and less well tested reputation sites, such as Klout, can present more serious problems for candidates.

Some job candidates are now being asked to hand over their Facebook login and password, to serve as a background check for employers who want an inside track on a person’s lifestyle habits, such as potential alcohol or drug use. The practice has attracted the ire of politicians, several of whom have drafted legislation in their states to ban the practice.

Klout, a San Francisco-based start-up, tracks people’s internet presence and perceived influence, and condenses that into a single numerical score. Its mathematical formula has been widely criticised for producing arbitrary results but, nonetheless, several companies are using the score to weed out candidates and bring their applicant pool down to a manageable size, Jobscience’s Mr Elliott says.

“It is massively unregulated,” he says. “The technology is so far ahead of the regulatory framework that the regulatory framework is meaningless.”

What is public and what is private on the internet is becoming increasingly contested as novel technologies transition into mainstream hiring strategies. Today’s recruiting advantage could be tomorrow’s lawsuit.

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