10 Signs Your Employee Referral Program Is Broken

By Jason Buss May 29, 2015
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Employee referrals are the No. 1 source of quality candidates for the most successful global organizations, resulting in faster hires, improved employee retention levels and higher profitability.

A broken employee referral program will fail to deliver the results your business needs, but how do you identify the root cause? Here are ten giveaway signs that your referral program needs an immediate overhaul.

  1. You treat your referrals like every other applicant. Employers are three to four times more likely to hire a referred candidate than one sourced through other channels. To put it another way, one in three referred candidates results in a hire. Pay special attention to them. Tag referrals in your applicant tracking system to enable a fast track through your hiring process.
  2. Your HR department is a black hole. Employee referrals that disappear into the black hole of HR result in lost credibility with your employees and your referral. Slow responses also suggest your organization isn’t serious about attracting or hiring the best talent—which impacts your employer brand. Dedicate the resources necessary to respond in a timely manner.
  3. You have no strategy. Perfecting your employee referral program requires application, effort and strategic planning. Relying on periodic e-mails to employees casually inquiring about “who they know” won’t produce results. Employees aren’t mind-readers. Create a compelling story to help employees promote your brand across their networks with integrated social referral sharing and targeted distribution.
  4. You apply too many rules. Don’t make it complicated or time consuming. Submitting an employee referral must be a straightforward process. Set clear expectations at the outset so all parties know exactly what to expect and when—then stick to it. Provide tracking and notification of progress at key milestones to your employees and most of all, have some fun.
  5. Your employees have to wait for their referral bonus. Paying bonuses for successful referrals three months or in some cases six months after a candidate starts work is bad practice. Make timely payments to encourage a consistent stream of referrals. If you’re worried about hiring the wrong people, fix your selection process and don’t hold your employees hostage by bad HR practices.
  6. You focus too much on $$$. Identifying reward as the most important element of your referral program prioritizes quantity of referral over quality. It’s not all about cash incentives. For qualified candidates that didn’t make the grade a personalized thank you or recognition from the hiring manager to the referrer is sufficient. Create a referral culture that expects quality, recognizes and celebrates your top referrers.
  7. You only accept referrals when you’re in hiring mode. Always be prepared to accept a referral regardless of whether you have a vacancy. It keeps your employees on constant alert for talent—and if you pass on the opportunity to meet with a high achiever you can be sure your competitors won’t.
  8. You don’t provide feedback. Employees won’t always get it right without guidance. Provide feedback on the strengths and weaknesses of referrals. Help your employees to help you by pre-qualifying your requirements for a better candidate match. Communicate your current hiring needs and reinforce your goals for more targeted referrals.
  9. Your leaders aren’t driving the message. Referral programs shouldn’t be seen as a human resources initiative. They are a business growth initiative with sponsorship and support from executives and leaders throughout the company. The executive sponsor shouldn’t be your SVP of HR.
  10. You don’t have social referral capabilities. Your employees are busy, they shouldn’t be expected to constantly check the intranet to see what jobs are open. Your applicant tracking system should automatically match your open jobs with the professional networks of your employees and inform them who they know, followed by a mobile enabled 1-click refer-and-apply process with all of the tracking built in.

Jason Buss is the founder and editor of TalentHQ and recruiting innovation officer for SmartRecruiters, a recruiting technology company. He has 20 years of global human resources and talent acquisition leadership experience, and is a recognized expert in identifying, recruiting and hiring high-performing teams. © 2015 TalentHQ. Reprinted with permission.

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