You’d Better Ask Somebody: Why Employee Referrals (Still) Matter in Hiring.

If you think about it, we live in a world that’s increasingly become driven by referrals; hell, in our society, it’s become almost ingrained for us to defer to our extended network before making pretty much any decision. We rely on the wisdom of crowds for recommendations, input or advice, crowdsourcing everything from which car to buy, where to vacation or even whether or not to propose to a significant other or not.

Seriously – the last one showed up in my timeline just last week, and I thought to myself about just how busy our “Phone a Friend” line has gotten, of late. That’s the paradox of social networking; while our updates ostensibly reflect what’s going on in our life, we can no longer lead lives that aren’t largely informed by what happens online, and how our connections will react, no matter how much of a stretch that “friend” moniker might in fact be. There is no longer such a thing as “in real life” when these platforms have become so embedded in our psyche that we defer to our friends and followers to ask even the most intimate questions or solicit highly personal advice.

Beware, the Wisdom of Crowdsourcing.

crowdsourcing-tap-500x360If you think about it, it’s kind of weird how willing we are to ask other people almost anything – hell, as they say, it never hurts to ask, and now that we’ve all got someone there to listen, constantly, we seem to err in favor of oversharing, and it’s always too much TMI, it seems.

I mean, no one really wants to know every detail of that weird medical malady you’re dealing with, but that doesn’t stop you from sharing what used to be a confidential medical issue with the whole world; often, asking for online feedback even preempts people from seeking out a doctor in the first place.

Who needs a diagnosis when you can just share the symptoms with your network for their qualified advice and input?

This, of course, often exacerbates the problem; we’ve all had that moment where we think we’re dying and then look up our symptoms in WebMD (don’t lie, you know you have), only to find that weird rash you’ve developed suddenly looks a lot like Stage IV melanoma, and suddenly, you’re posting pics and announcing your battle with cancer to the world before realizing that you, in fact, just ran into a patch of poison ivy instead.

Hell, why wait for a doctor when diagnosis has become so damn easy? The seriously sad part is that I’m not even making that example up – and I’m still a little pissed at having to suffer through a friend’s completely fictitious cancer scare (fortunately, she copped up within a week of the initial announcement; a little aloe, and that patch mysteriously disappeared as quickly as it came).

I don’t blame her for anything other than poor judgement; the fact is, for better or for worse, we live in a feedback culture. And we’re constantly looking for referrals, because getting advice from someone (anyone) online seems somehow preferable than just listening to our guts. In a world where expertise has become an egalitarian effort, what we read on the Internet is the truth, regardless of its factual veracity.

In an age where the only encyclopedia or reference source anyone consults is Wikipedia, this tendency to place absolute trust in others’ references or opinions without questioning their expertise or experience (or lack thereof, more often) has skewed the way we look for, consume and act on information, opting for the recommendations of others over our own research; it’s easier to do due diligence when it’s done for you, after all.

This trend is why sites like Yelp!, Glassdoor or TripAdvisor are multinational, multimillion dollar businesses. It’s nice to have a destination for reviews from real people who, you assume, will give you real information. We feel like we’re getting the inside scoop or behind the scenes look as consumers before making purchasing decisions, and almost invariably, feel we’re able to easily sniff out the real deal from the marketing CTAs, or filter the organic reviews from the sponsored content, even if our track record suggests most of us are pretty easy marks as consumers for the rapidly evolving marketing strategies required by such a rapidly evolving market.

Referrals shape how we view the world, whether that’s who to marry, where to eat, or, increasingly, where to work.

It’s All About Who You Know, You Know.

employee referralThat’s why I wasn’t terribly shocked (or even mildly surprised, frankly) to read Glassdoor’s most recent study on interview sources, which only reiterated what recruiters have long known: referrals are by far the most effective source of interviews (and hires) out there – and always have been, even before our social lives moved to social media.

The referral preference phenomenon might be new in the context of our personal lives, but that referrals have spent decades at the top of every source of hire report in the history of ever prove that this is nothing new in our professional lives.

In fact, the efficacy of referrals, if anything, only seems to be amplified by social sharing and review sites – as is their importance to every employer’s talent attraction strategy. Think about it this way: we’re currently taking more of our most valuable (and valued) information from either anonymized internet users or our specious “network” of online connections who are likely unqualified or misinformed about whatever issue or question they’re weighing in on.

But none of us would ever suggest anyone should only trust what the Internet has to say about any given topic, particularly when it comes to hiring someone. This is why reference and background checks exist, after all.

Glassdoor’s data found that only 10% of all in-person interviews originated directly with an employee referral, compared to 42% of hires who applied directly online (although obviously some of these were likely referrals that weren’t formally submitted or correctly tracked as the source of hire, which happens more than any of us would care to admit). Now, I don’t know about you, but in most cases, I’d probably take 10 highly qualified leads who are already at least a little referenced by our network than 42 irrelevant, unqualified or non-vetted ones any day.

As a marketer, I know that conversion rates are far higher for the former than the latter, and turns out, the same is true with recruiting: quality not only beats quantity for interviews, but  but referred leads also tend to close quicker, and at a higher percentage; Glassdoor data suggests that referrals are 6% more likely to get hired than other final candidates slated for in-person interviews from other sources.

Stepping up or refreshing your referral strategies – and increasing the time and resources recruiters currently allocate towards this critical source of hire – just makes sense. But let’s take a step back: do you know where your referrals are coming from? Do you know how they convert? Do you have a separate process for referrals? Do you even care?

Why You Can’t Ignore Employee Referrals.

GD_EmployeeReferrals_JobInterviews_PieChartIf you’re like most employers today, you’re likely spending almost all of your time, budget and bandwidth on all other external sources of hire (eg job boards, search agencies, career sites, social media) which are historically much more expensive and less effective, than you do on generating and nurturing referrals.

As much as we talk about the importance of “brand ambassadors” in employer branding, we never look at the ultimate goal of these initiatives, which is to increase qualified referrals – and turns out, you don’t actually need brand ambassadors to make a significant impact when it comes to driving employee referrals or recruiting ROI.

But you’ll never see a payoff if you’re not even paying attention. Promise.

Here’s the thing about work: unlike, say, leaving a restaurant review or responding to a Quora post, when it comes to career related content, the stakes are higher than that of any other random review site or random repository of sponsored posts than any other vertical.

But career related content still has the same bogus reviews and user bias as any other review or recommendation platform out there. This actually negatively impacts the quality of old fashioned employee referrals, considering that it’s easier than ever to find an employee at a target company and simply ask a random stranger for a referral to a posted position – particularly if there’s an incentive attached as part of a formal referral program, which is most commonly paid out in the form of a cash reward.

These programs widely lack any controls around quality or baseline for preexisting relationships, incentivizing employees for successful referrals while not penalizing them for poor ones – and not all referrals, as recruiters know, are created equal.

That said, it’s easy enough to submit a referral, but making sure to follow up on the nature of the employees’ work relationship with their referrals or even a few sentences to justify why their referrals are a good fit for the position or company can fairly easily filter out examples where a “referral” is really nothing more than an employee forwarding a resume or directing a potential applicant to indicate that they initiated the conversation with a candidate instead of vice-versa.

This might not be a surefire solution for qualifying referrals, but by requiring a positive endorsement or additional information from the submitting employee, this simple step should completely preempt referrals where the worker actually has had a negative experience working with (or simply doesn’t like) the candidate in question.

If someone really had a negative experience with a former coworker, client or colleague, then they can’t be persuaded to put their reputation on the line, which is the end effect of requiring more than a resume submission when submitting an employee referral. No money, reward or whatever perk in the world is going to convince an employee to refer them to a job if there’s not just a reward involved, but a slight bit of risk, too.

Think about it. We all have a person – or a few people, in my case – who we’d never, ever work with again. Whether that’s a shitty boss, a lazy coworker or an asshole intern, whatever the case may be, if they burned you at a previous employer, they’re dead to you as far as working with them again is concerned. People are honest about their black list, and actively seek to block these hires; this is why it’s not a bad idea to double check with future co-workers or teammates before extending an offer.

Remember, references cut both ways – and chances are the employee referring a past coworker or colleague isn’t the only one who’s encountered that candidate professionally. Trust, but verify. Similarly, this same system can help surface the best hires, because multiple employee endorsements about one candidate are rarely wrong (this can also be the best way to get a hiring manager off the fence and onto next steps, too).

By not only referring a specific person to a specific role, but also requiring employees to speak to why their referral is a good fit ensures that not only does the candidate have the right professional skill set, work ethic and interpersonal style, but  the right personality for your company culture, too.

Employees know their teams and your business better than anyone, and, unlike, say, some stupid behavioral interviewing question (“which type of car would you be and why?”), referrals can be the most reliable way to determine culture fit and predict quality of hire. In fact, Glassdoor data shows that employee referrals not only increase the likelihood a candidate will get selected for an interview by 2.6-6.6%, but also increase the chances that candidate will get a job offer by a similar coefficient, which, statistically, is nothing to sneeze at.

6 Keys For Building An Employee Referral Program That Doesn’t Suck.

GD_InterviewSources_LeadtoOffer_Draft2So, how do you drive more qualified referrals and build a more effective, efficient employee referral program? Well, if this study didn’t reinforce the need to ask this golden question about the source of hire silver bullet, then you seriously need to go get your head checked – as recruiting goes, referrals are kind of a no brainer.

If you care big data, or need to pull together the metrics to build a business case for more budget, resources or headcount (or to just justify that you’re doing your job), then you might consider looking at referrals, first – there’s no recruiting strategy on earth that gives you more bang for your buck.

If you’re still spending money on stuff like social, SEO or search firms, but don’t have a robust employee referral strategy in place, then you clearly aren’t ready for “big data,” because you haven’t even looked at the small stuff.

When broken down into any recruiting-related metric you measure – from speed metrics like time-to-fill or qualify metrics like application to interview ratio – referrals outperform all other external sources of hire across the board.

A predictive analytic for you: if you allocate a bigger share of your budget or resources to employee referrals, you’ll see at least a proportional improvement in your recruiting related ROI. And when it comes to aligning your efforts to bigger business objectives, the bottom line is the only baseline that really matters.

With that end goal in mind, here are 6 simple steps for building a better employee referral program:

1. Don’t Be Afraid To Ask (And Ask Again).  On a recent appearance on the Animal radio show, Matt Charney was talking about what constitutes “great” recruiting content. Charney mentioned that the goal of great recruiting content doesn’t have to be to drive just-in-time hires, but instead, to keep your pipeline warm enough to drive referrals and positive word of mouth.

Since he’s both my editor and my boss, I hope that he’s not completely full of shit when he’s talking about recruiting [ed: in fact, he’s only mostly full of shit], but assuming he’s right [ed: big ‘if.’], I can tell you that this is one area where marketing rules seem not to apply. In marketing, we’re a one call to action kind of group – the goal of our discipline is to get as many people as possible to take one pre-defined action.

Unlike consumers, though, the target audience for recruiting content is the same one that will take an hour just to fill out an application, if needed. They’re willing to do what a recruiter asks in the middle of the hiring process, or provide any information required; any truly active leads are really looking for a friendly face or an ass to kiss in the hopes of making the impression they need to get the offer they want, when you get right to it.

That means they’ll actually respond to multiple calls to action; it only makes sense for recruiters to directly ask these candidates for referrals while they’re really motivated to show who they know and what they can do. Even if they’re not a fit, if they’re qualified, interested or available, chances are they can think of at least one person who would be a great fit – all you’ve got to do is ask them. Problem is, too few recruiters do.

Never be afraid to ask for referrals – if a candidate thinks your company is worth considering, they’re not doing you a favor – they’re helping someone they know get their foot in the door of a great employer. That’s a win-win, no matter how you look at it.

2. Referrals Aren’t For Employees Only. To the earlier point, it’s important to know that whether actively sourcing a candidate slate or passively posting and praying, if you’re talking to external candidates, then you’ve got to have a process and program for external referrals, too.

Now, I realize that an external referral is technically an “online” or social network specific source most of the time, but if you’re building a magnetic employer brand, then even the people who don’t work out will work out to spread the love (and your EVP) to their closest friends and most valued colleagues (and whomever else happens to be part of their digital footprint).

Because their connection with your brand is deeper than one job, and they’re already engaged with you online, these external brand advocates can actually be better referral sources than current employees. Why not motivate them in the same way as current employees and figure out some way to reward them when those referrals lead to hires?

Toss them a few bucks, buy them a gift card – even a token shout out on your social recruiting accounts are all the recognition that most of the most engaged members of your talent network really need to keep the great referrals coming (and keep your employer brand top of mind, too).

3. Sharing Is Caring: Hell, if I’ve said it once, I’ll say it again. There’s no shame in asking for a favor, particularly if that favor is asking for help finding awesome people for awesome jobs at an awesome company. Or even a halfway decent one, for that matter – which is why it’s always OK to go straight to the source and straight up ask your employees and external connections to help share a job.

Start with the hiring team and have them tap into their networks, first – they have the most at stake since your new hire is their new teammate, which should be enough motivation where you don’t have to do too much arm twisting to get help getting the word out about an open job. But here’s the critical next step that’s really easy to forget – give them an ideas of what to say and when to say it.

Coach them into marketing the job and you’re more likely to see one of their friends in the lineup. It can be as simple as “tweet this” or “here’s an example from Bonnie in Accounting.”

referral tweet

3. Stop Writing Job Descriptions That Suck. So here’s the thing. No one wants to share something that sucks. You don’t want to show off your kid’s ugliest drawing or failing report card any more than you want to show off your company’s ugly career page and poorly written job description. Give employees something to be proud of – something that not only represents your employer brand, but one that speaks to them and the work that they do, too.

5. Real Employees > Stock Art. People are vain. So vain. They know this paragraph is about them (yes, I had to make the Carly Simon reference.) If your top employees are featured on the page you’re not only showing your culture but giving people a reason to share. They love to show off to their friends that they’re featured on the company website. Plus, it’s a great retention vehicle – no one wants to leave a company when they’re literally the poster child for employee success. Period.

6. Build a Kick Ass Reward Program. Give points for every activity someone can do to refer an employee – social sharing, sending an e-mail, sending a resume, that sort of thing. Run competitions or sweepstakes or something similar (if that sort of thing works for your company). If not, make the reward good enough that people want to earn in and make sure they know it exists in the first place. The biggest reason programs fail is because no one knows the program exists.

These six seemingly small steps should make a big difference in your employee referral program. And feel free to share this post to anyone you know who might be interested.

Katrina Kibben


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