For corporations it is hard to establish whether their employees use social networks for their personal needs or for business purposes. Most of them claim that they use social network like Linkedin mostly for business purposes to get new contacts and sales opportunities. But requests to integrate their contacts into CRM/HR systems are often resisted by the employees.

However, in a number of companies the policy has recently been revised. For example, Allen & Overy (an international law firm) has been forced to lift the ban after the firm’s IT department was bombarded with staff complaints following a firmwide ban on social networking website Facebook.

Recruiters and especially headhunters already actively use social networks to source new candidates, and corporate recruiters follow the lead. Corporate employee bonus programs could be a perfect match for integration with employees’ social networks. This way employees still control their social networks, but have enough motivation to share potential candidates with HR department.

According to a recent Spherion Emerging Workforce Study, 58 percent of top HR executives said that referrals are the best way to recruit top talent. In another survey by HCI/ExecuNet, 62 percent of recruiters listed networking as their most effective means of finding senior managers.

Cisco Systems Inc., the California-based Internet pioneer, created a program called “Friends,” where prospects are paired up with Cisco employees of similar work backgrounds. Cisco employees act as an extended sales force, helping convince on-the-fence and passive candidates that the company is a viable (and friendly) employer. 40 to 60 percent of all new Cisco hires now come from employee referrals.

Some companies like Eli Lilly and Company are transforming employee referral programs from de facto program for family and friends to an explicit program of talent scouting. Talent scouting moves employee referral programs from reactive to proactive operations  to reach into the workforce at multiple touch points and on a regular basis and aggressively solicit the names of prospects, even when openings do not yet exist for them.

What’s next? Companies already expand referral programs to search not only via employees (for instance, through alumni and clients) and not only job candidates (for instance, new clients).

It is easy to benefit from the social networking boom by using Software-as-a-Service options. For example, FaceContact.com, a venue for getting referral rewards, finds Passive Candidates, which will provide integration of referral bonus programs and Contingent Recruitment into corporate websites.