Walk with Me: The Dark Side of Employee Referrals

fire walk with meOne of the recurring, and interesting, conversational topics at the recent #HRTechConf was the one about social employee referrals.  How to get them, manage them, tap into the power of them and, ultimately, turn them into quality hires.

Intriguing stuff – and some neat solutions are in the marketplace that can assist employers with precisely that.

But allow me to take a step back into the mists of time.  Once upon a time I was working as the HR Director for a mid-sized health care organization.  After I arrived on the scene and we undertook some considerable work, we managed to significantly reduce turnover, strengthen and reinforce our organizational culture, and dramatically lower some frightening expenses (related to turnover and culture..duh) that pained me no end to see floating out of my HR budget each month.  As part of this transformation there was a drastic shift from the old model (which I inherited) characterized by the inability to attract candidates and therefore hiring anyone who could breathe and held the requisite license and/or certification.

After the shift (and lots of hard work) we became a destination employer.  Candidates wanted to leave their current employers and join us; employee referrals skyrocketed; and we made some great hires when enthusiastic and motivated employees referred their professional contacts, colleagues and others in their personal networks.

Sunshine and roses, right?  Well…usually.  It got a bit dark and gloomy, however, when employees who were perfectly adequate performers referred anyone and everyone just because they could and we made it easy.  No…we did not pay any sort of referral bonus at the time and yes…this was eons ago so referrals and anything related to the application process was via a paper form.

So what made this awful?  Weren’t we improving our quality of hires?  Hadn’t we spent a lot of time discussing our values and culture and “what we were about” so that our current staff would refer those people who would fit in our organization?

Well… yes, yes and yes.

But every now and again when we didn’t hire a referred candidate the employee who referred them would get super pissed.  Like massively pissed.  The employee couldn’t understand that (a) it was really none of her business a specific friend/cousin/hairdresser’s sister wasn’t hired and (b) our selection process reflected the transformed organization and our values, mission and vision for success.

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One day, as I was sitting in my office doing something incredibly exciting (FMLA paperwork or 403(b) planning or something equally HR sexy) an employee came into the HR Department, trotted past some vacant offices and stood in my door, hands planted on hips.  Behind her was her friend/cousin/hairdresser’s sister who had recently received the “Thanks But No Thanks” letter.   And while the rejected applicant was a bit perturbed looking, the employee was fuming.

“Why didn’t you hire her?” she demanded. “We’ve got openings on my shift and you told us to make referrals!  What’s wrong with this place?  What’s wrong with her?”

(note:  I had previously been backed into that office by an employee who threatened me physically so yeah – I was not feeling particularly at ease….but that’s another story)

So I asked the employee to have a seat in the reception area and invited her friend/cousin/hairdresser’s sister into my office.  And spent a bit of time going through, bit by bit, why she was not a suitable candidate at this time.   And then I asked her to wait in the reception area and had a nice long conversation with the employee.  No specific candidate details but a retelling of what our organization stood for and what her role was in the referral process.  Candidate experience (before we called it that) times two.

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And that, my friends, was a social network referral in the absence of social technology; quite a bit different from the solutions now offered on the HR Technology side.

But what I find endlessly fascinating is the lack of realization that this way – the old way – is how a number of companies continue to manage employee referrals.  As it’s often a matter of size, scope and scale, there are numerous employers who are left out of discussions on this subject.

After all, if an organization has less than several thousand employees chances are pretty good they have a home-grown, hybrid, paper-and-pen employee referral process.    Chances are pretty good that the candidates wishing to work for a 150-employee Community Bank are not connecting with hiring managers on LinkedIn let alone connecting with the HR Director or Recruiter.  And it’s quite likely those candidates don’t have an understanding of the organization or the open positions beyond whatever limited information their employee-connection has shared with them – you know, standing in line at the grocery store after church on Sunday morning.

And so, for a myriad of reasons, referring employees remain confused and at a loss to understand when a connection isn’t hired (“We’ve got openings on my shift and you told us to make referrals!”).

As for Human Resources professionals there are questions to be answered before embarking on this journey – certainly for the ginormous enterprise but also for the small and mid-sized organization:

  • What’s a quality referral – and how will your employees (and their extended networks) know what that is?  
  • Are more referrals necessarily better?
  • If you aren’t able to automate, aren’t going to gamify and can’t offer a monetary incentive (or choose not to do so) how can you use the lessons learned from others to develop a quality social employee referral program?

I, for one, enjoy the interesting discussions about this topic.  And it’s OK – perhaps there are ways we can all limit our trips to the dark side.

One comment

  1. Cynthia Allen Schenk says:

    This is an interesting topic. Again it reflects upon the importance of communicating expectations and employee development. I would like to see more companies investing in employee social skills. A small investment that could offer huge savings and positive results. If we help employees develop professional behaviors they will be more likely to refer employees with better interpersonal skills because they will be able to recognize them in others.In addition they will be more prepared to present a positive image to the customer. Give people the tools for success and I think most will rise to the challenge. If you don’t communicate the expectation, in this case that not every referral will be employed, I suspect you will have disappointment because the expectation was not identified.

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