Can social media bring employee referral schemes to life or are they dead already?

October 17, 2011 at 9:22 pm Leave a comment

http://blog.sironaconsulting.com/sironasays/2011/03/can-social-media-bring-employee-referral-schemes-to-life-or-are-they-dead-already.html

March 30, 2011

Can social media bring employee referral schemes to life or are they dead already?

An area of recruiting staff that has been around for as long as recruitment itself, seems to be fighting hard to re-invigorate / re-invent / evolve ( <—– take your pick accordingly!) or even just get started for some companies.
I am not talking about anything revolutionary here – it is the humble (yet so powerful) referral.

I wrote last week about one of the new generation of referral tools coming along on Facebook, of which there are many – and more to come I am sure. They try and ‘use’ our personal networks to facilitate referrals online networks like Facebook. LinkedIn is a more business focused network that also encourages referrals, and this will become (I believe) be exploited further over the next months/years, as they figure out an effective way to do that.

When you sit down and work out who you know, it can be quite scary, actually how many people you could reach out to with potential opportunities……………. if you actually thought about it!
This graphic below will really make you think.

Your Referral Universe

But what about company referral schemes? What is yours like? >> Lame, boring, £$ based, un-inventive, ineffective or maybe you don’t even have one?

Why do so many companies know that personal referrals are so powerful and yet they do nothing about them? According to Kevin Wheeler, in the USA 70% of all hires are made through referrals, one way or another. << WOW!!  Obviously a bit of a culture difference from the UK – I don’t have the stats, but I know it will be significantly lower that that!!

Over the last week, I have had the ‘referral recruitment’ conversation in detail with three large companies. What was really strange was how similar they all were:

  • A generic open-ended referral program (no time limit and no focus)
  • Promoted by posters on notice boards and (just one of them) on their intranet
  • Financially based – between £350-1250 – per referred hire
  • 3 month success payment (i.e. they must complete their probation period)
  • No family or personal friends (this was with two of the companies, and surprised me!)
  • One even had a payback clause if the referral left between 3-6 months!!

Not really inspiring are they?

When speaking to Kevin, I asked him what some companies are doing in the USA that worked for them, and gave me some changes that have made referrals more successful over there.

  1. Treat a referral process as campaign. Give it a short time line, say,  2 or 3 months. this focuses people on the need. Also, only ask the people in your business that are relevant to the vacancy, to help you. For example, if you are recruiting a Java developer, then it makes sense to focus on your IT department to reach out to them and see if they can help identify someone suitable.
    So, in a nutshell, keep the referral programme focused around skills needed and limit the time frame, to create a sense of urgency.
  2. Referral programmes shouldn’t necessarily be based around money. Kevin gave an example where some companies used other incentives like cars, holidays etc. If you have a recruitment campaign to hire  a number of employees, and the potential cost savings form agency fees are worth it, then you can offer some great rewards. Then if you limit the number of people that are eligible (i.e every 20 successful referred hires) the odds of the employees who have referred people are very reasonable indeed!
    Wouldn’t the chance of winning a car be a great motivation to ‘encourage’ you to try that little bit harder to recommend someone you have in your own network?
  3. Social media has been great for ‘spreading the word’ for companies, but there still needs to be a robust referral scheme in place in the first place. Social should be the distribution mechanism not the scheme.

Of course many employees actually refer people they know to organsiations because it is simply a great place to work. They don’t necessarily want a reward, or even see the need to reward them.

So, I am really curious to understand what referral schemes / reward schemes you have in your company. I have seen so few good ones this may be a short list, but it would be great of you can share your experiences of ones that have worked and why.

So my question to you is:

Which is the best employee referral scheme you have experienced and what made it so successful?

(Please answer below in the comments if you have details of any you can share – there MUST be some innovative examples out there)

Picture credit: Maximum Referrals

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“By Grads for Grads” – Social Recruiting from Unilever social recruitment

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