Ask the Expert: Enhancing Your Employee Referral Programme

Welcome to our brand new segment – ATCHub “Ask the Expert”, where experts in recruitment and HR gather to answer your everyday employment/workforce-related queries. Let us know if you have any questions. Leave them in the comments or email them to us, and you might just see it in the next issue of ATCHub “Ask the Expert”!
This week’s question: A referral programme can be a good source of candidates for an organisation and it can do wonders for a business. However, there has also been criticism suggesting referral programmes hinder diversity goals and they lack quality control. In addition it needs to be refreshed regularly to keep the staff interested and focused on areas of greatest need. 
What tips and insights do you have for organisations that are looking for a little assistance in enhancing their employee referral programmes?

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Name – Stan Rolfe
Title – Resourcing Manager
Company –  Barminco
    
The best referral programmes don’t just happen. Great time and effort goes into planning, educating, and promoting. You need to formulate strategies and tactics for these and any other objectives you are trying to achieve. Educating your employees on what constitutes a quality referral is where you will get the biggest bang for your buck!

Do you need incentives? They do help, but if you look at my organisation, no you do not. If you have a strong culture with a great work place, then your employees will refer to their network. Just as they refer their network to a great restaurant, hotel, service provider without incentives for the most part.

The biggest challenge which currently exists is, how does one capture and measure referral quality of hire? Identifying those employees who are referring a lot of people but not necessarily the right people, educating them on what you are looking for, why their referrals are not working out.

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Name – Cathy Riach
Title – Recruitment & Resourcing Manager
Company – BAE Systems Australia
    
It has been proven that companies who use referral programs have, on average, higher retention rates than those who don’t. Why? We refer people like us. We like to work here and we fit the role. Our friends will like to work here and they will fit as well. Referred candidates are generally keen to impress too. After all, you put your name to them!
Does that mean that we’re at risk of becoming an organisation of clones or that our bias is causing us to recruit in the image of ourselves? It could but that’s where your unconscious bias training and robust assessment methodologies come in. You can also encourage referrals for hires that support your diversity and inclusion strategy. BAE Systems has done that. It paid dividends.
From a quality of hire perspective, we’ve always found a strong correlation between quality of hire and source. Referred candidates = quality performance coupled with longevity and productivity.

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Name – Rob Papworth
Title – Group Manager, Talent Management & Recruitment
Company – MMG Limited

Any recognition or reward should be token, not substantial. I know there will be different views here, but there is a tipping point where referral schemes become too lucrative and this will dilute what you are trying to do. It is also important to recognise that as a Recruiter, you have a ‘selection’ obligation to the organisation.
The trick is to not let referred candidates bypass the selection process. At times this can be difficult but you need to somehow and somewhere align them to a selection process. The key to this is to invite all referrals to apply for a role (as opposed to automatically assigning them into a role). That way a referral is still a candidate as they have ‘applied’.
In terms of concerns regarding a scheme diluting the diversity of your team or organisation over time, you can mitigate through robust recruitment practices. This involves balancing the requirements of any position with the broader values of the organisation and ensuring that all candidates go through a selection process.
Finally, any good Recruiter needs to review and reflect on their work.

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Name – Antony Hall
Title – Senior Talent Manager
Company – Air New Zealand
   
There is no single right approach and solution for this but instead, you need to know what is suitable for your business. Our approach is unique to us and is guided by the following 4 principles:

Paying for referrals has little benefit and can be counterproductive. People should refer others because they can see a match for that person in their organisation, because they are proud of where they work and because they are prepared to stake their own reputation on the line – not because they get a $1,000 (less tax) referral bonus.
“A” talent refers “A” talent, “B” talent refers “C” talent. Your referral activity should be targeted. Just as recruiters should be targeted top talent directly, it makes sense to also engage with the best in your business to refer other great people they know. Top performers have learnt from the best, respect the best, worked with the best, and know what it takes to be the best. Generally speaking they have high standards and hence this translates to referring talent.
Use technology. There are a number of easy to use, low cost and effective apps or software in the market that helps make the referral process, engaging, fun, alive and easy to administer.
Manage what you can measure. Make sure your referrals are tracked as well as the referrer and source of referral. We use this data and correlate it with performance metrics so we can now see if referral, as a channel, is getting us better candidates than other channels.