First off, can we all agree on a couple of things?
1. Candidates hired through employee referrals tend to be better hires than those hires not coming from referrals.
Are we good?
2. Your Employee Referral Program sucks and needs a refresh.
Are we still good?
Don’t feel bad, 87% of all HR managers I talked to about this post said they needed to redo their Referral Program. So, you are in a blogger non-definable category of worthless metrics! But, at least you’re not alone!
The nice thing is we here at FOT are willing and ready to help, so today we are giving 5 New Rules for a Kick #$$ Employee Referral Program! Here we go:
#1 - Stop calling it an “Employee Referral” program – no one cares who refers them as long as they get referred to you and not your competition. Start calling it a “Candidate Referral” program and pay the bonus out to whoever refers the person. Look, if I’m down at the local barber shop and Pete the Barber tells me about a guy he knows who is a great guy and a great Java Developer – BAM! – Pete needs some love from me. Companies who are continuing to use “Employee Referral” programs are lame – open your mind.
#2 – Post publicly a Candidate Referral scorecard. If Ted in accounting has referred 3 people in the past 12 months and leads all internals with referrals – post it – post the Top 10 – let everyone know. It will increase your referrals, guaranteed, or we here at FOT will give you the cost of your membership subscription to this site back! If you’re really on top of it, post external referrals as well, especially if Ted’s wife has referred 2 others – now Ted is really responsible for 5 finds. It’s good to connect the dots!
#3 – Your list of “rules” for paying out referrals and how they will get paid out – must be less than 150 words, and so simple the sales department can figure it out as well.
#4 – Don’t make people fill out your stupid form to refer a candidate. Yeah I know – “But, Tim we’ve had problems in the past where two people referred the same person 5 minutes apart and it caused major problems in who got the payout!” No it didn’t – you just didn’t have the balls to tell the 2nd person, “Sorry, you’re 5 minutes late.” Make it so easy to refer someone that a 5 year old could do it. What’s their name – how can I contact them – email, phone number, linkedin, facebook invite or smoke singles – it doesn’t matter – I don’t even need their last name – I’m a recruiter, I’ll get it.
#5 - Put some crazy rule, in your rules, and don’t explain it. It’s provocative, and every good “Candidate Referral” program needs provocation! My favorite comes from a small tech company which had the rule: “We’ll take any referral, from anyone, but they can’t be named “Benny”. No reason given, just no “Bennys”! That’s awesome, it made people talk about it – and the key to a good referral program is getting people to talk about it! Plus, who the hell wants to work with someone named “Benny”?
Great post. One of my big issues with referrals is the payout period. “If the employee lasts 90 days we will give you the money.”
That is total rubbish. It is not the employees faults the person didn’t work out, the people doing the hiring failed to do their job.
Pay the employee on day 1.
Brian,
I agree with you, somewhat, it’s a sticky issue. It comes from corporate HR folks working with 3rd party recruiters and 3rd parties giving them “guarantees” on their placements. But I agree with you in that once the person is placed, there’s nothing you can do about it. You are paid to “retain” the person, you are paid to “refer” the person – once that is done – it’s done!
I say pay for the referral the day they start, if they don’t work out, the HR person did a bad job at screening and selecting (or you referred a bad apple or it just wasn’t a good fit), either way it’s no longer your issue.
T
Love it Tim! I always thought that referral candidates tend to be better hires than those not coming from referrals until ereexpo Spring 2010 when I listened to someone from Microsoft say that their analysis showed it wasn’t true. Then I got to thinking about my experience as a corporate recruiter at some large, well known companies. My personal experience is that most people just want to either make a buck and/or help out a friend or family member. So I’d say that referral candidates are no better or worse than any other candidates. But who cares about that anyway? Spend 10 seconds looking at the resume and reject 90%+ of them. You will make some hires. And get back to the referrer to thank them for their referral and to let them know what you’re really looking for.
Great article!
I think the most difficult part of a good program is the follow up. If someone took the time to refer a candidate who they trust would be a good fit for any of the open positions, it can be very counter productive to receive no feedback what so ever.
I agree with you in that once the person is placed, there’s nothing you can do about it. You are paid to “retain” the person, you are paid to “refer” the person – once that is done – it’s done!