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Don’t You Wish Employee Referrals Were Better?

Posted by Eric Putkonen on 12/22/2015 in Recruiting articles |

We all know that employee referrals are one of the best sources of hire; however, referral quality beats referral quantity.  But do you measure the quality of your employee referrals?

I have seen the same situation in several companies and heard it from multiple peers, many of the employee referrals are crap.  We see referrals that don’t meet the minimum qualifications.  We see referrals that are beyond what the position pays.  We see referrals that barely meet the requirements or otherwise are not among the top applicants that we see.  There are times I wish the quality of the referrals were better.  But without measuring quality of employee referral, how can we hope to improve it?

Thank you to Sonny Abesamis (CC BY 2.0)

Thank you to Sonny Abesamis (CC BY 2.0)

What metrics would I suggest for measuring the quality of employee referrals?

Primarily, I would say percentage of referrals that meet the minimum qualifications of the position and percentage of hires of the total number of referrals (closure rate).

Potentially, I may also try to capture if the referrals are just meeting the requirements or exceeding requirements – or perhaps more simply are the referrals in the top 50% of total applicants to a position or the bottom 50% (you could even raise this to top 40% or whatever).

We always try to hire the strongest people for the positions, but if the referrals are always on the bottom 50%…it is not really helping and this might be something to train and coach employees about.  Especially as our employees are making referrals that match the requirements, but their referrals are never interviewed…and they are wondering why.  Without more information, they will become discouraged and stop making referrals.

Also, as you get referrals…while collecting the name of the referrer (for potential bonuses paid), but sure to collect what department or segment they work in.  That way if there are issues with the quality of the referrals from certain areas within the company, you know what groups may need additional training and coaching on making employee referrals.

We need metrics on our employee referral programs.  We can not just set it and forget it.  We can tweak and improve upon the employee referral program.  This will also not only increase the quality of the referrals, but it will also increase the employee satisfaction with the employee referral program.

Put it this way, with some training and coaching we may be able to virtually eliminate the referrals that do not meet the minimum requirements of the position.  You may also virtually eliminate the referrals that are not in the geographic region and require relocation assistance (by coaching employees on which job have no relocation assistance or sign-on bonus, so they cease referring people that require this to move).  You may coach employees on the current attitude towards H1B visas and such, and maybe reduce the number of referrals that require visas when you can not sponsor a visa.

Thank you to GotCredit (CC BY 2.0)

Thank you to GotCredit (CC BY 2.0)

Basically, we can educate our employees on what people we can not help employ…and if the employees understand, they stop referring these kinds of people.  This eliminates a whole set of employee referrals we normally would have to review (and reject) and eliminate this is a whole set of employees who are no longer wondering why their referrals are not being interviewed for the position.

Increasing the quality of employee referral not only makes our job easier (as a recruiter), but also makes employees more satisfied with the employee referral program.

The main problem is that recruiting is just too much of a black box for employees.  They do not know what goes on within our department and how we process applicants and referrals.  This not knowing contributes to their sending bad referrals.

Also, if the referral we receive just isn’t as strong as other applicants, we should be letting the employee who made the referral know that we are passing on the referral because there are stronger candidates who have applied.  Thank them for the referral, but let them know that there were much stronger applicants and so we are not interviewing the referral.

There is no way to interview every referral…and it is not fair to interview them just because they are a referral but they really don’t have a chance at the position because stronger people are in process.  I said there is no way to interview every referral because you may find that you spend all your time interviewing referrals if you get a lot of referrals.  All wasted work, if your quality of employee referrals is low.

In summary, we need metrics to measure and improve upon our employee referral process and we need transparency of the process for internal employees as this will set their expectations instead of leaving them wondering what happens in the black box of recruiting.

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1 Comment

  • Ian Wood replied to a copy of this article on LinkedIn and said, “A key question for referees when a referral is made should be whether they have first hand experience of the referral candidates work performance in a relevant role.”

    Good point.

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