When Employee Referral Programs Turn Dangerous

By Monday, June 30, 2014 Blog No Comments

Imagine that it is 9 a.m. and you’re sitting at your desk, slowly sipping on your third cup of black coffee – it’s just that kind of morning. As you stretch your tired limbs and open up your ATS, your eyes glaze over as a throng of unqualified candidates fills your screen. Yawn.

All of the sudden, your talent pool begins to fill up with experienced, interesting, and downright awesome candidates – the likes of which you’ve never seen! What happened here? Where are they coming from? Who has sent them?!

You now have command over an excellent employee referral program which saves you time, money, and improves the quality of hires you bring on. It’s the trifecta of talent acquisition, and it’s at your fingertips. With this newfound abundance of talented profiles, you suddenly have time to complete everything on your year-old “to do” list. You feel good about your job and life in general! You’re walking on air!

And why shouldn’t you be? HR professionals have sung the praises of referrals for ages, insisting over and over that with a great program, you will reap the benefits.

However, I’ll advise you to keep yourself in check as you develop this all-star program. You’re probably feeling really great now that you’re receiving an influx of applicants without having to send that awkward LinkedIn message or doing the dreaded cold-call. You have to know how to utilize the right tools and when to use them – or you could endanger your company with poor handling of these recruiting weapons. Employee referral programs become risky when:

  • CheezburgerCatYou depend too much on those social media referrals. Let’s say you post a job opening and a link to the career site on Facebook. Your childhood friend that you haven’t spoken to in 20 years responds with a cheery, “I’d be perfect for this!” and applies, noting that you referred him. You remember his expert finger painting work in first grade, but that’s about the extent of your knowledge about him – and that won’t necessarily make him a great accountant. What do you do?! Your name is on that application! What if he is absolutely awful? That’ll look poorly on you. That is the risk you’re taking when you implement a social referral program. In order to combat these awkward moments, take the time to reach out to the so-called referrer and ask how well they know the applicant.
  • Bad employees refer similar workers. Great employees attract great applicants, which is why referrals are such a successful source-of-hire. However, if ineffective workers forward along a friend’s resume, that person is much more likely to be a poor worker. Hopefully, your company is all sunshine and roses with no unproductive employees, but let’s get real. In order to avoid this issue, the best thing to do is ask for many references and to communicate with the referrer’s supervisors. It’s necessary to have those uncomfortable conversations, such as the one the Bobs have in Office Space.
  • People take advantage of the system. The incentives plan is arguably the trickiest part of referral programs. How do you strike the perfect balance of motivating people to refer their talented friends and getting quality rather than quantity? If your rewards are so high that people are referring anyone they can think of – including unqualified applicants – you’re not going to accomplish much. If they’re too low…well, no one will care about your little initiative. You also need to decide when to give incentives – when employees refer someone, or when a referral is hired? Maybe you give them rewards for each stage of the interview process. You need to focus on landing on a happy medium so that people don’t take advantage of your company’s generosity.

Employee referral programs aren’t for the faint of heart. They’re big, scary super powers that can make or break your career. If you happen to use them poorly and exploit your helpful coworkers – or the referral applicants themselves – your credibility and that of your company will decrease rapidly. Don’t let the magic of the referral program get to your head. As wise Uncle Ben states in the 2002 version of Spider-Man, “With great power comes great responsibility.” Please refer responsibly.

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