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Improving Referral Program Performance by Avoiding “They Found Me” Referrals
Posted By Dr. John Sullivan On October 1, 2012 @ 5:56 am In Advice and How-Tos | 7 Comments
Nearly every firm that I have worked with that captures data on the quality of their hires learns that employee referrals produce both the highest volume and the highest quality of hire from any source.
However, the results of referral programs can almost always be dramatically improved when referral program managers become fully aware that a significant percentage of the referrals that are received under most programs would have to be designated as “low-quality.” Low-quality referrals can be broken into three groups:
This last group, the “they found me” referrals, is the most significant type of referral to reduce because, according to my research, it can exceed 36% of all referrals. Imagine how much more powerful the results from the overall referral program would be if all three of these types of low-quality referrals could be eliminated, so that they didn’t clutter your referral system.
There are two basic types of referrals: the “I find you” and the “they found me.” The type of referral that produces the highest quality referral is the “I find you” type. This superior type is when one of your employees goes out of their way over a period of time to identify a top-performing colleague. This “I find you” approach assures that all of referrals will be well known by your employees and that their work and their skills will be completely assessed before a referral is ever made. As an added benefit, these “I find you” colleagues are almost always currently employed individuals who are not actively seeking a job (they qualify as the so-called passive candidate). Because they are not active in the job market, their name will normally not be found in your current candidate database.
Now let’s shift to the other contrasting type of referrals, the “they found me” referral. They can comprise over one third of all referrals, and these types of referrals are tainted because the individual that the employee is referring is “a stranger” to them. The referral may not be known at all by your employee (6%), they may be barely known (11%), or they may be only a casual acquaintance (19%). Taken together, that means that on average 36% of all referrals result from an employee being approached by a near stranger and being asked to make them a referral. Because they actively approached your employee, these “they found me” referrals must be classified as active candidates who are so eager for a job that they have probably already formally applied for a position (so they are already in your candidate database).
When a relative stranger approaches one of your employees, whether in person or online and asks to be made a referral, the candidate must initially be considered less desirable because:
If you expect to reduce the number of referrals from strangers, from bottom-performing employees and referrals that are motivated primarily by money, here are eight action steps to take:
I have been espousing the value of employee referrals long before they became popular. And although it is certainly true that referral programs are powerful, realize that even successful referral programs can get much better (reaching more than 50% of all hires). You can improve referral program performance by periodically re-energizing your marketing, being highly responsive to referrals, and reducing the number of “they found me” referrals from un-assessed strangers. A complete list of the top 70 best practices in employee referrals can be found here  and here .
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URLs in this post:
 here: http://www.ere.net/2011/08/15/the-complete-list-of-employee-referral-program-best-practices-part-1-of-2/
 here: http://www.ere.net/2011/08/22/the-complete-list-of-employee-referral-program-best-practices-part-2-of-2/
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