You Are Killing Your Own Employee Referral Program

By Kara Yarnot, Executive Consultant and Strategy Practice Leader, HireClix

For many companies, employee referral hires prove to be top quality hires. Research shows that referral hires assimilate more quickly, have greater engagement, and stay at the company longer than non-referral hires.  In general, referral hires tend to be among the best hires a company can make. Thus, you want more of them.

According to our research at HireClix, 71% of companies have formal referral programs. Yet, only 2% of those companies report actually meeting their referral hiring goals.  Many companies have dedicated staff to manage, promote and evaluate the referral program.  Over 80% of companies with referral programs pay cash bonuses averaging over $1,000 to employees who refer successful candidates.  Thus, you are spending significant resources, yet not getting the results you want.

Why is this happening?

There are 4 primary causes of poor performing referral programs, and you can control all of them.

1. Your employees don’t know what jobs you have open. It is not your employees’ responsibility to keep track of all of your open positions. So, they are often only aware of open positions in their immediate work area. They could have friends, former colleagues or relatives who fit requirements in another part of the business, but they aren’t aware of the need, so they don’t refer anyone.
2. You make it too hard for employees to submit referrals. Your official method of submitting a referral is typically through your applicant tracking system. You require the employee to have the candidate’s resume, know all of their contact info, and identify the jobs that are the best fit for the referral. You require multiple steps and clicks and it isn’t mobile friendly. Employees can’t complete your process easily, so they don’t complete it at all.
3. You don’t respect the employee or the candidate. Once a referral is submitted, it often falls into a “black hole.” The candidate is never contacted and the employee can’t find out what is going on. The employee is frustrated and embarrassed and doesn’t ever refer another person.
4. You don’t recognize employees who refer a successful candidate. Yes, they may receive a cash bonus in their paycheck, but you don’t communicate their success throughout the organization. Thus, they don’t feel fully appreciated and other employees are unaware of the program and results.

Want to know how you can change your program to eliminate these 4 causes of poor performing programs? Join us for this FREE upcoming webinar “The Secrets to A Winning Employee Referral Program” on August 31 at 2pm ET.