Employers are typically highly reliant on employee referral networks for recruiting fresh talent. While highly popular - and highly effective - employee referral programs can also get stale after a few years. What follows are some ideas, gathered from our recruiting experts, for getting better results.
Have a culture people that want to recommend.
It's obvious but worth stating: First and foremost, a company has to have their house in order if they want their employees to invite others in. If your referral program isn't bringing in the volume and quality of candidates today that it did a few years ago, the problem may not be the program but your employer brand.
Communicate and set expectations.
These programs often are underutilized because of simple, avoidable miscommunications and poorly-set expectations. For example, employees may assume they will be informed at every step along the interview path for the person they refer. Many companies have a policy of only notifying the referrer if the person is hired, but never communicate that policy.
Likewise, a referrer may think she is sending a friend's application in for a certain position, while some companies automatically submit each candidate's resume in for every open position. These types of miscommunications - with both the referrer and the referred - can unnecessarily leave a bad impression and discourage participation. So, communicate well and often. One solution is to make this administratively feasible through the use of an applicant track system that sends out automatic communications.
Ensure a highly visible, tight process.
Employees will not submit a resume if they perceive it as going into a "black hole." Make sure people are well aware of where to send referrals. Treat employee referrals with the highest priority and highest touch. Ensure incentives are paid on a timely basis and don't let anyone fall through the cracks.
Be aware of the downside.
While employee referral networks provide a great means to attract great candidates, they can also backfire if they are relied upon too heavily. For one thing, common sense says that your employees will refer people more or less like themselves, or with similar backgrounds. Certain executives may only recommend associates from their alma mater, for example. So, too heavy a reliance on these programs may dilute the diversity of your organisation.
Also make sure to monitor the program to verify that employees are referring others for the right reasons - not because of financial rewards. This situation causes wrong hires and money lost.
Finally, do not let laziness set in. Busy recruiters may decide to trust the judgment of a good employee and shortcut the candidate's interview process in what recruiting insiders, in a turn of phrase we think says it all, call a "why not" candidate.
Even companies with a strong employee referral network should look for innovative tips to bolster participation.
Here are some ideas:
- Pay referral bonuses.
Give out part of the referral bonus when the candidate is hired and after a certain period, such as 90 days, pay the rest. This can be a great incentive, but there are two cautions to mention. First, making too many small payouts dilutes the effect of the bonus - it needs to have buying power. Second, some companies have tried paying for actual performance of the new hire, but this can breach the privacy of the new hires' performance information.
- Ensure retention of referrers.
A study on employee referral networks by Professor Emilio J. Castilla of Massachusetts Institute of Technology (MIT) Sloan School of Management showed that employees who bring friends and associates into the organization can just as soon take them along elsewhere if the referrer's view of the company goes bad. Castilla, who studied a call center for a large financial institution where approximately one-third of applicants came from employee referrals, saw that managers need to be aware of the social web that can be damaged if the referrer is not happy at work.
- Make every employee a recruiter.
By giving employees a two-sided business card, turn all employees' meetings into recruiting opportunities. The other side of the card can say: "We are always looking for top talent. Click on this link for information." Each portal can have a certain number that connects back to the employee and tracks their contributions to the recruiting network.
- Host a sort of gathering.
Some companies host regular happy hours called "Bring a Friend." Each employee must invite two industry-relevant people from outside the company who might be receptive to an opportunity.
- Use a web-based networking program.
These new systems provide HR with a clear process for tracking referrals - both candidate and referrer can be involved in the process. For example, if a company needs to staff a sales department, a link can be sent to everyone to tap into their network. Employees can forward this link or invite people to join the network after registering. This system can especially be helpful with finding strong passive talent.
- Make referrals part of the job.
Put "active networking" on performance evaluations and reward for volume of referrals.