Tips on building social capital

What is Social Capital and Why Does it Matter?

In today’s labor market, who you know can sometimes be as important as what you know. Considering applying for a new job? Recent studies have shown that only 5% of job applicants have referrals, but applicants with referrals make up 30% of new hires.

These findings come from a study conducted by the hiring software company Greenhouse. They provide Applicant Tracking Services used in online hiring. According to their research, applicants with referrals had a 50% chance of advancing past an initial résumé review compared to just 12% for external candidates. Additionally, 30% of eventual hires were referred, even though people with referrals constituted just 5% of the applicant pools in the study.

This data underscores the significant impact of referrals in the hiring process, highlighting that while a small percentage of applicants come through referrals, they represent a substantial portion of the people ultimately hired.

If having a person who knows you and will vouch for you increases your chances of landing the job by that much, why don’t all candidates have one? Some may simply not be aware, but many do not have the relevant connections – or social capital – needed to make these asks.

Now you’re wondering how do I build some social capital of my own?

To break the cycle and land the job, we must do something different. Building social capital starts with clarifying your own thinking. Select a field or specific career you would really enjoy working in. Identify someone who works in that space. Reach out. Ask for an informational interview.

An informational interview is a fancy name for a phone call a job seeker makes to learn more about a career. Start by picking up the 100 pound phone (it's heavier when you're using it for job search purposes). Dial the person you'd like to learn more from to introduce yourself. Next, mention you are considering applying for a position like theirs. Finally ask if the person would be willing to set up a time to chat for 15 minutes about how they got into what they are doing and what it's like. People love to talk about themselves and typically say yes when asked.

Once you get into the informational interview call be sure to ask, "Is the company you work for hiring?" And just like that, you're building your own social capital.

Feeling ambitious? For my overachievers out there, consider making one informational interview outreach call per week. As your network grows, so does your pool of potential referrals.