Employee Referrals: An Overview of Using Networks for Talent Acquisition

<div class="grey-callout"><h2>In This Guide You'll Learn</h2><p><ul><li>How to get employee referrals.</li><li>The advantages and disadvantages of employee referrals.</li><li>Why employee referrals are a sign of a healthy business.</li></ul></p></div>

An employee referral is finding a candidate through a recommendation from one of your existing employees. This is often a good Applicant Attraction Channel to start off with. (Guide: How to Attract Enough Applicants gives recommendations about how to sequence the various attraction channels, including employee referrals.)

How to Get Employee Referrals

• Start with existing staff. You could get them together over food and drink and see who they know who might be a good fit. Also ask them to post a link to the job ad on their social media accounts. You could also ask new recruits about great people that they worked with in their last job, and customers and suppliers about people that they know at your competitors.
• People generally make referrals because they want to help their friends as well as their current employer, so you don’t have to pay them a bonus – payments can actually encourage people to make poor recommendations for the money. But it can be nice to offer a small perk such as a modest gift or extra holiday. Needless to say, referrers shouldn’t take part in the process of recruiting the person they recommended.
• You’re approaching the referral, so introduce yourself tactfully. It can be good to mention the referrer, but get permission from them first. See our script & email template Introducing Yourself to a Referred Candidate for more details about this process.

Advantages of Employee Referrals

• Employee referrals can throw up potential candidates who would otherwise be hard to find because they’re not actively seeking a new job, but might be open to moving if offered the right role.
• Referrals, especially those obtained through employees posting links on social media, can help you cast your net over a more diverse group of people than a single individual could ever hope to.
• People who are recommended personally by a contact are effectively pre-screened, which means less work for you.
• They’re cheap. You may have to pay an incentive bonus, but it shouldn’t be a huge amount and is only paid in the event of a successful introduction.

Disadvantages of Employee Referrals

• For obvious reasons, you won’t be able to use employee referrals for confidential roles.
• They can take a long time to deliver promising leads and results often diminish rapidly over time.
• It can be hard for employees to think of people to recommend because previously close contacts may have become more like acquaintances whose recent job performance they don’t know much about.
• People tend to know others like themselves, so referrals can lack diversity, especially if they come from a small number of people.
• You might feel that you have to interview a referral even when you know that they’re not a good fit.
• If you have to dismiss a member of staff who was referred to you, the person who originally recommended them might leave out of loyalty.

One final point: employee referrals can be a great help but make sure that you’re an employer who actually deserves them – one who appreciates their staff and offers them the career prospects that they want. When your employees are excited to spread the word about how great it is to work for you, then you’ll find it easier to attract new people and keep hold of those you already have.

<div class="grey-callout"><h2>Key Takeaways</h2><p><ul><li>Employee referrals can be a good way of beginning your search for new staff.</li><li>Obtain referrals from existing employees and new recruits, as well as from customers and suppliers. You can offer referrers a perk, but keep this small.</li><li>Employee referrals can throw up candidates who’d otherwise be hard to find, help you tap into a more diverse pool of people, reduce the need for screening and come fairly cheap.</li><li>However, employee referrals can’t be used for confidential roles, may be slow to deliver, can lack diversity if from a small group of people, may mean having to interview an unsuitable candidate out of politeness, and if the candidate is later dismissed might lead to the loss of the person who referred them.</li><li>Above all, make sure that you’re an employer worthy of getting referrals!</li></ul></p></div>

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