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This post was inspired by the new Referrals solution available in SmashFly 15, which you can read about here.

 

Referrals are the holy grail of recruiting. If you ask 10 recruiting leaders, “What is your best source of hire?” 11 will say “employee referrals.” OK, I know the math is off there, but employee referrals are an important foundation of a successful recruiting strategy.

Referrals are desirable for a few reasons:

  1. They are a quality check by a known quantity. You hired your employee and deemed them as a good fit for the organization. They know people similar to them who could also be good fits. There is also an element of shared responsibility of a bad hire if a referral doesn’t work out.
  2. They ramp faster and are less likely to leave. Studies have shown that referral candidates are more productive due to pre-existing relationships and stay longer due to these relationships.
  3. They are leads that essentially only cost when hired. Recommendations are not only great quality leads, but they also accept offers at higher rates and only cost when they are hired into your organization (the best value you can get, plus you’re rewarding a current employee).
  4. They are easily identifiable. With the mass amount of applicants most organizations receive, a referral is a great way to prioritize the sheer quantity to identify candidates to evaluate further.

Recruiters know the more referrals they receive, the more qualified candidates they will get to fill open job positions. And this thought process has led to a dramatic shift in how these programs are administered.

 

The Move Toward The Lowest Common Denominator

When looking at employee referral programs the first question most organizations ask is, “How do we get more referrals?” It makes sense, especially with the benefits mentioned above.

However, as organizations have strived for “more,” they’ve done so by lowering the bar in terms of the information they capture. To make their referral process “easier” for both referral sponsors and referred candidates, they have eliminated much of the qualitative information required from both. This has led to special processes and more name-only driven referral programs (will address later.)

The most common example I have seen is a process that is managed in either the ATS or spreadsheets (yikes!). In most cases, referrals are handled in a special process outside the normal ATS apply flow with candidates entering into the ATS without either expressing interest or providing information beyond their name.

While this increases overall quantity of referrals, I suggest these are not “referrals” at all. Rather, they are a list of leads that need to be followed up on.

The question is, how do you make referrals easy without losing the value of a recommendation, so that you can increase the quantity of qualified referral candidates?

 

How We Use Recommendations as Consumers

When I think about how I research anything, referrals, and in turn recommendations, impact my decision process greatly. From TripAdvisor crowdsourcing when deciding on what to do on vacation to asking friends about a new restaurant, I increasingly look to tap into collective experiences to better identify what I would like and not like. And I doubt I’m alone.

When you look at the recommendations you receive, which ones are the most useful? In pretty much every case for me, they are the ones that provide a real reason why they are recommending. Even in the cases, where someone just recommends a restaurant or activity by itself, the kneejerk reaction is always to ask why, and in turn, what’s special about that place or activity?

Sure, we all run into moments and activities that are great on a whim (and we recommend people to them,) but more and more decisions are based on real recommendations from the people and sites we trust.

 

Getting Real Recommendations in Your Referral Process

As we look to improve referral programs, we must answer these questions:

Who should be able to refer? At the end of the day, organizations need to decide if they want just employee referrals or other sponsors that make sense (think alumni, fans, partners, etc.) The process may be different for each, but it’s important to tap into your full referral network.

What questions would you like a sponsor to answer? Basically, this gets to the “why.” At the very least, you should ask a referral sponsor to give a reason for why a referral candidate is someone they recommend. However, there may be other questions that you can ask. The key here is not to be exhaustive but to ensure a process that is easily done and provides real information in terms of each candidate’s value.

Can sponsors refer to jobs or general skills? This impacts your program. If all referrals are tied to jobs, then when the job is filled those candidates in most cases are not usable. While they do exist in the ATS in some form, the ATS was not built to re-engage with candidates later. Understanding and providing options for referrals to happen based on core skills vs. just to specific jobs can help open up possibilities for more referrals and longer lasting relationships with referral candidates.

Where should a referral live? Where referral candidates live is an important decision, especially in terms of engagement and compliance with the hiring process. A referral candidate may not be ready to apply to a specific job today, but in most cases, they are shoehorned into the application process and enter the ATS black hole before they are ready. Referring candidates into a CRM based on skills—with the ability to apply to job opportunities when they are ready—can provide a way to better engage and nurture referral leads. It can also help you go back to the referral contacts who don’t get the job or don’t immediately engage with your organization.

How successful are we at converting jobs? At the end of the day, a referral program shouldn’t rely on the law of numbers to get quality but a process that uses engagement to drive more conversion of the program. Referrals are like any lead in your recruitment marketing strategy (and may even be better leads) and ultimately your referral program should be measured on it’s success next to the other initiatives and channels you use to recruit qualified individuals. It should also be measured on how many referrals convert not just to jobs immediately, but through nurture and engagement campaigns. In the end, we need to ensure we are making the most of the referral candidates we receive as it will impact the relationships with our employees, advocates and fans who are sticking their neck out with their connections to help our recruiting strategy.

 

The end goal of an employee referral program is to drive qualified applicants into the ATS that are actionable by our recruiting team. In order to provide this, we need to ensure that our recruiters have the information necessary to evaluate the candidates that come in—and recommendations are a crucial part of that. We also need to ensure that our focus on filling today’s jobs doesn’t alienate and/or disengage potential referral candidates who are not ready to apply today, but could be interested in our company tomorrow.

Yes, we should make the process easy for referral sponsors and candidates, but not at the expense of getting information we need to make decisions. Asking “why” in the referral process is a small ask of referral sponsors that can make a huge impact on the recruiter’s ability to take action on the referral, ensuring more referral candidates get further into the hiring process and more sponsors get the bonuses for their referral recommendations. In the end, it means for happier participants all around.

To learn more about the SmashFly approach to Referrals, register for our upcoming SmashFly 15 webinar that will discuss the new Referral capabilities in our Recruitment Marketing Platform.

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