There’s a database sitting in your ATS right now that’s worth millions of dollars. And you’re probably ignoring it.
Most agencies spend thousands every month renting candidates from Indeed and LinkedIn. Meanwhile, many of these same candidates are already in your ATS.
The best agencies figured out years ago that it’s cheaper to activate the network you already have than to keep paying job boards for access to the same candidates everyone else is fighting over. By focusing on gathering referrals from past candidates, these agencies are building equity while their less successful competitors are still renting.
The hidden network
Think about the last 100 candidates you placed. Each of them knows 10-20 other people in their field. Nurses know other nurses. Welders know other welders.
That’s 1,000-2,000 people you now have a path to via referrals. Not cold calls or Indeed applications, but warm introductions from someone you’ve successfully placed.
Scale that to your last 1,000 placements. That’s 10,000-20,000 potential referrals sitting in your database right now. You already own access to this network. The question is whether you’re doing anything with it.
Why most databases die
Most staffing agency databases are drying slow deaths. Candidates get placed by competitors. Contact information becomes outdated. Relationships cool. The database grows in size but shrinks in value.
This happens when you treat your database like a filing cabinet instead of an asset that needs management.
Agencies that understand the value in their databases do something different: they stay in touch with placed candidates and systematically ask them to tap their networks. One placement in 2025 leads to three placements in 2026 through redeployments and referrals.
Here’s what that actually looks like:
A travel nurse you placed three months ago gets a text as her contract winds down. She responds, you reconnect and redeploy her. Then you send her a referral link. She shares it with two colleagues in 30 seconds from her phone. They submit themselves, and you see exactly who referred them. Monthly reminders keep the program visible, real-time updates tell her when her referral gets placed. Six months later, she refers someone else without you asking. The flywheel spins.
Multiply this by hundreds (or thousands) of past candidates, and you have a pipeline that doesn’t depend on job board spend.
Our platform data tells the story: referred candidates convert to placements at 14.5%, compared to roughly 1% for job board sourced candidates. That’s not a marginal improvement. That’s 14x better conversion from the same recruiting effort. When your recruiters work referral leads instead of Indeed applications, they’re fishing in a completely different pond.
Rented vs. owned candidates
When you pay $200 to Indeed for a candidate, you’re renting:
- Indeed owns the relationship
- That candidate sees your competitors’ jobs every time they search
- You compete on price and timing
- You pay for every single placement
When you place a candidate from your own network, you own that relationship:
- No job board fee
- No competition for their attention
- Higher trust = faster conversion
- The relationship generates more referrals
The data on candidate lifetime value (CLV) bears this out. In healthcare staffing, referred candidates generate 46% more gross profit per placement, in light industrial, they generate 266% more in than non-referred candidates. Your database isn’t just contact information. It’s future revenue that’s either compounding or evaporating.
Think about what this means for recruiter capacity. If your recruiter works 100 job board leads at 1% conversion, that’s 1 placement. The same recruiter working 100 referral leads at 14.5% conversion? That’s 14 placements. Same effort, 14x the output. WSI, a light industrial agency, saw this firsthand: 38.9% placement rate from referrals vs. 10% from Indeed, and referrals stayed on assignment up to 346% longer. That’s not just better sourcing. It’s a completely different business model.
What activation requires
You can’t activate a database by hoping people remember you. You need infrastructure.
- Clean data. Do you have accurate contact information for your past candidates? Can you segment them by skill, location, placement history? Most of the agencies I talk to have databases full of dead emails and disconnected phone numbers.
- Automated outreach. You can’t manually stay in touch with thousands of candidates. You need automated touchpoints, i.e., texts when contracts end, check-ins at 90 days, seasonal reminders. This keeps you top-of-mind without consuming recruiter time.
- Frictionless referrals. When you reconnect with a past candidate, can they refer someone in 30 seconds from their phone? You need one-click referral submissions and instant bonus tracking.
The compound effect
Here’s the growth curve when you systematically activate your database:
- Year 1: You place 500 candidates. Each becomes a potential redeployment and a referral source. You capture maybe 20-30% of that potential.
- Year 2: You place another 500. But now you’re also redeploying Year 1 candidates and getting their referrals. Your effective sourcing capacity just grew 40-50% without adding recruiters.
- Year 3: The compounding accelerates. You’re placing new candidates, redeploying past candidates, and receiving referrals from two years of placed candidates.
Your job board-dependent competitor starts from zero every day. You start with years of accumulated network growth.
Where to start
If you don’t know what percentage of placements come from referrals, start there. You can’t improve what you don’t measure.
Most agencies, when they calculate this, discover they’re at maybe 5-25%. That means they’re leaving more than three-quarters of their database value untouched.
Once you have a baseline, set a target. If you’re at 20%, aim for 25% next year. Build the systems to get there.
The choice
Every dollar you spend on sourcing delivers different returns:
- $10,000/month on a job board buys you access to the same candidates your competitors see, no lasting advantage, relationships that reset after each placement, and costs that scale linearly forever.
- $10,000/month on database activation buys you automated redeployment pipelines, systematic referral generation, a network that compounds continuously, and per-placement costs that decline as you scale.
That’s the difference between renting your biggest asset and building a sustainable competitive advantage.
The talent you already own is your biggest asset. Will you activate it, or keep renting candidates while your database collects dust?
David Folwell is the host of The Staffing Show podcast by Staffing Hub. He is also the president and founder of Staffing Referrals, the only automated referral management (ARM) platform designed specifically for staffing firms.
As an avid tech enthusiast, Folwell is constantly helping businesses overcome their biggest challenges so they can grow faster. He is an advisor for multiple technology startups and is an active participant in staffing industry events around the country.
For fun, David runs ultra-marathons, listens to Tim Ferris and Sam Harris podcasts, snowboards, and travels.
