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The Great White Referral

Posted by Colin Kingsbury

Dec 26, 2006 1:48:00 PM

Howard Adamsky's 2005 article on The Myth of the Passive Candidate was a timely repost on today's ERE. If 2005 was the year of the Passive Candidate, 2006 has been the year of the Employee Referral. It's a good thing it's almost 2007 because I am getting tired of it.

Don't get me wrong: employee referrals can produce great hires, no doubt about it. But I think they're being oversold.

First, you can't escape the relationship between quality and quantity. One of the main reasons why referrals can be so good is that the referring employee truly knows the candidate's abilities, and isn't just going on a resume and interview. What you see is more likely to be what you get. However, most people aren't professional networkers, and the number of people they know at that level is limited. Chances are most people at best know a dozen or so people in the same field well. While it's nice for Bob the sales guy to refer his occasional golf buddy Joe the programmer for that new opening, I doubt that lead is any more valuable than if Joe were found by a names sourcer.

There are cases where this factor matters less. Retailers like Starbucks, for instance, require almost no specific skills or experience, but care plenty about universal qualities like personality and integrity. Generally speaking, the more targeted and specific your searches are, the fewer people your current employees are likely to know, and know well.

Second, making a referral program work is 95% about business processes and 5% about tools and products. Most employees, and certainly the best, are somewhat picky about who they refer, and probably the biggest killer of referrals (and faith in the HR department more generally) are the number of referrals that go down the memory hole or get treated the way the company treats most applicants. When the employee hears from the friend two weeks later that they still haven't heard anything from HR, relationships and the willingness to make future referrals are damaged.

Likewise, there are a few simple things nearly any company could do which would increase their quality referrals significantly. First, every new recruit can give you the names of the top people they worked with in their previous life. This isn't what most people think of as an employee referral program, but these are likely to be some of the best recommendations you'll ever get in quality terms, and you don't even have to pay a bonus for them. 

Second, you should make a habit of cleaning out employees' rolodexes two or three times per year. Most of our Outlook contact lists are full of information names sourcers would charge good money for, and it's all company property. Have employees export their contact lists to a Spreadsheet and highlight the people they think are a cut above.

Last, instead of waiting for an opening to occur and hoping for the best, send a survey out to current employees asking them to name a few people they know who they would love to work with on their team, at any level above or below them, and why. This way, when you do have an opening, you don't need to rely on the employee finding out, contacting the person, and the person getting back to you before the process can begin. Obviously you need to be careful and you may choose to not contact any of these people right away, but at least you're in the driver's seat when the time comes.

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