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Employee Experience

Why Employee Referral Programs Need Data

January 20, 2016
5 min read
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You already use data in a number of ways and places throughout the company, but just one thing is missing. Employee referrals are no different than your traditional recruiting methods, but instead of recruiters you have eager employees, and instead of job descriptions you have relationships. So although it might make it a bit easier to find the best talent for the role, it’s often difficult for recruiters to measure because it’s much harder to control a referral program. But, I assure you, employee referral programs cannot only be measured by data, they need data so your team (recruiters and otherwise) can make the best referral decisions.

Want continued participation? Speed it up!

We live in a world where we want results yesterday. This might be a bit rash, but your candidates and the employees doing the referring want your response as quickly as possible. The lack of responsiveness in employee referral programs is the number one program killer and it permanently reduces the amount of employees who participate in the program. Dr. John Sullivan (@DrJohnSullivan), Advisor to Management and Author, said:

“The best programs set a target of getting feedback to the referrer and the referred individual within 48-72 hours of submission. Continuous and honest feedback is also essential if you don’t want to discourage future referrals.”

The easiest way to track the employee referral data is tagging these applicants in your Applicant Tracking System. Through this platform, your internal data aggregator can then analyze the information and bring you the numbers to see where you can speed up the process. More often than not, that means responding to talents faster, especially when it’s a high quality candidate. Some of the best programs have expedited interviewing by guaranteeing that the decision to offer the referral an interview will be made within five working days.


CC-Click-ToTweetBird-01.png@DrJohnSullivan says continuous and honest feedback is essential for this reason: 


Target the approach

Your job advertisements are targeted right? You use your data to see where your job descriptions perform best so you can further pinpoint the language and tone, so why not take the same approach with your referral program? Don’t just rely on your employee referral program to source passive candidates, focus on quality of hire as well. While, yes, this is a viable means of attracting candidates who weren’t really in the market for a new job, your employee referral program has the opportunity to find great active job seekers as well. If only 15% of jobs are filled through job boards on average, doesn’t it make sense to increase your efforts with the internal referral program?


CC-Click-ToTweetBird-01.pngOnly 15% of jobs are filled through job boards. This approach is a better alternative:


Make decisions based on data

Employers often make employee referral programs part of their recruitment strategy. The problem is when you don’t have the data to backup your efforts. A data-driven employee referral system can lead to a targeted and more strategic talent pool. With a system to track and analyze the referral process and those that are referred, you’ll be able to see the largest return on investment in your recruitment department. With the integration of data, these referral programs have become more dynamic because they are able to adjust with changes in referral direction and quality of hire. Mohsen Salehi, Organization Effectiveness and Planning Consultant, explained that metric-driven employee referral programs are essential in hiring:

“As more firms adopt quality of hire metrics, it becomes even clearer that well-designed employee referral programs produce high performers, high retention rates, and if managed correctly, they are faster, just as diverse, and often cheaper than all other resources.”


CC-Click-ToTweetBird-01.pngMore firms are adopting quality of hire metrics. Can you blame them? See why, here:


Metrics are essential to nearly every part of the recruitment department, including employee referrals. These measurements help to increase the speed at which you contact referrals to ensure the program continues with strength. In order to do so, however, you still have to target certain parts of the candidate pool, including the referral program. Really, your employee referral program thrives on data, albeit most often indirectly; but when you change that to a direct correlation between the two, your employee referral program will improve ten-fold.

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