Why “Name-only” Employee Referrals Produce Dramatic Results

Oct 29, 2012

Employee referrals provide the highest quality and the highest volume of hires, but you won’t receive as high a level of results if you don’t minimize roadblocks to referrals. Requiring a current resume for employee referrals is a major “under-the-radar” detriment to reaching the goal of having referrals exceed 50% of all hires. Requiring a resume to start a referral process might not seem like a big deal (because the resume is “the currency” of recruiting) but it can be. Although “active candidates” all have current resumes, employed people who are not actively looking (some people call them passives) don’t have an updated resume available and they may have little interest in creating one.

Requiring an updated resume in order to move forward slows down and occasionally stops employee referral efforts. Consider an alternative approach, which is offering an option to employees, so that all they must submit is a prospect’s name and contact information in order to begin the referral process. This approach is known as a “name-only” referral.

Why Requiring a Resume Creates a Roadblock

The primary goal of the “name-only” referral process is to increase the volume of high-quality referrals from employed prospects who are not active job seekers. That goal is achieved by minimizing any roadblocks that inhibit referrals. It specifically eliminates a major delaying factor, which is the need to have a resume to start the formal referral process. Some of the reasons why requiring a resume causes delays, reduces referral volume, and referral quality include:

  • The delay while a referral prospect updates their resume — after an employee has had a successful face-to-face or online conversation with a prospect, they will of course ask for a copy of the prospect’s current resume. Unfortunately, many employed individuals who have not been in the job market simply don’t have an updated resume. This creates a delay because it may take weeks for an employed person to find the time to complete their resume update. It may also become a roadblock because the process of having to update a resume is unpleasant to most, so a significant percentage of the prospects may never start or eventually complete the work on their resume.
  • A delay after “the conversation” while waiting for their resume — many referrals result from an employee’s face-to-face conversation with a top prospect at a conference or an event. Even though an employee may have successfully assessed and convinced an individual to consider your firm, under most process rules, the employee can’t make a formal referral without attaching a resume. But because non-active job seekers don’t carry around copies of their resume, that means that the referral application must wait until the prospect later retrieves a copy. This delay “after the conversation” provides the prospect with an opportunity to change their mind about becoming a referral. And even if they don’t change their mind, it may take days for them to get around to sending their resume off.
  • There is no direct contact, so a resume can’t be obtained — some referrals come without any direct conversations between the prospect and the employee. This occurs when an employee identifies a referral prospect by assessing their work, their ideas, or their solutions on the Internet or in social media. In other cases, the employee will learn the name directly from another trusted professional in their field. In either case, without a direct contact and a relationship, the employee cannot easily approach and request a copy of a prospect’s resume. And a referral will not likely occur unless the employee happens to have the time to search the Internet in the hopes of finding the prospect’s resume.
  • Delaying the feeling of disloyalty when you send in a resume — many currently employed individuals don’t mind being approached and discussing a possible new opportunity. But they may consider it an act of disloyalty to their current team when they are required to actually send off a copy of their resume to another firm. This feeling of disloyalty and its related hesitation can be “postponed” or delayed if their verbal approval is all that’s required to become a referral. In fact, they won’t ever have to take any positive action that they might consider disloyal unless and until they are chosen for an interview. The firm can use a LinkedIn profile for their initial assessment, in lieu of a resume.

Why Resumes Are not Critical for Great Referrals

If you are looking for a new member for your golf team, merely being provided with the name “Tiger Woods” and the fact that he was interested in your team would be enough for any recruiter to “take it from there.” Before you assume that a resume is required, remember that the three key elements of an effective employee referral application are completed by the employee, and most are done without access to a resume. These three assessments include:

  1. They are qualified — the employee attests to the fact that they know the work of the individual. And that they have assessed the skill, knowledge, and experience level of the individual and they have determined that they are equal to or higher than that of your firm’s average employee.
  2. They are interested — the employee sold the prospect, so that recruiters and managers know that the individual is interested in the job/firm and they are willing to come in for an interview.
  3. They are a fit for the organization — the employee has assessed whether the individual would be a cultural fit for the organization (and perhaps for an individual job).

Fortunately, each of the three key assessments can be and often are done by the employee without them ever seeing a formal resume. If the firm is willing to accept these three key initial assessments and a copy of the prospect’s LinkedIn profile, in the short term, there is no need for a formal resume.

After the organization formally accepts the “name only” referral, in some cases there will be a need for additional information to determine if a telephone interview is warranted. Fortunately with the growth of the Internet and social media, even a junior recruiter can easily supplement the employee’s initial assessment and the information provided in their LinkedIn profile. They can gather any necessary additional information without contacting the prospect through Google searches on their name, Internet searches for their resume or bio, by using vendor reference checking services, and also through a search of the individual’s personal website and social media sites. So at least in the case of exceptional “name-only” referrals, a formal resume may not need to be requested until the end of their initial screening interview.

The Solution — Develop a Process to Accept “Name-only” Referrals

If you want to make it easy for employees to make referrals and for prospects to become formal referrals, you should consider developing a process for accepting “name only” referrals. The concept is certainly not new; however, recent experience at the Children’s Medical Center in Dallas has reinforced its potential positive impacts, where nearly 25% of “name-only” referrals are hired.

Incidentally, it includes a unique program feature that pays the employee $100 per name, even if the individual is not hired.

Key elements that you should consider including in your “name-only” employee referral process include:

  • Minimum information needed — only require their name, contact information, and their public LinkedIn profile for the initial application.
  • Require employee assessment — require the employee to assess each “name-only” prospect for 1) their skill level, 2) their fit for the organization, and 3) that they are interested and they will come in for an interview, if it is offered. For referral programs that demand that a referral to be linked to an open job requisition number, require the employee to determine that the individual is currently working in the field of the referral opening.
  • Offer a reward — offer the same level of referral reward for a hire under the “name-only” process as under the normal referral program. Also consider offering a small reward simply for providing the names of exceptional prospects, whether they are hired right away or not (i.e. a $25 coffee card). Although this is unusual, it will dramatically increase the number of referrals while building your talent pool.
  • If you can’t offer a reward — if you can’t or don’t want to offer a reward for new hire referrals, realize that accepting “name-only” referrals is an excellent approach because it dramatically reduces the amount of work required on the part of the employee in order to make a referral contribution. Employees are less likely to resent not being rewarded if the referral process is much easier on them. Emphasize that employees should make only exceptional referrals in order to “build the team,” to increase business results, and to ensure that they will only work alongside the very best.
  • Limit the number of referrals and raise your expectations — because “name-only” referrals require some extra work on the part of recruiters, limit the number of “name-only” referrals from an individual employee to no more than three a month. And even then, make it clear to employees that you expect that each “name-only” referral to be a top 10% “exceptional” prospect.
  • Limit which employees can make “name-only” referrals — you should also consider limiting “name only” referrals to employees who are above-average performers or who have a proven record of successful referrals.
  • Allow executives to make “name-only” referrals — consider accepting “name-only” referrals from senior managers and board members because they have extensive contacts but they normally don’t have the time to make traditional referrals. Where there are potential conflicts of interest, allow the referral bonus to be donated to a charity.
  • Provide direct feedback — if you find that individual employees are abusing the “name-only” referral process, they should be given direct and honest feedback. Individuals who make extraordinary “name-only” referrals should also be contacted to learn about their techniques and to recognize them.
  • Metrics are required — you should label each “name only” referral in your ATS  and track them over time to document that they produce quality hires.

Final Thoughts

In my experience, most people who run employee referral programs are extremely conservative and resistant to innovations. As a result, the idea of accepting “names only” is usually not met with a lot of enthusiasm. That is unfortunate because making referrals relatively easy will dramatically increase employee participation rates, the number of referrals, and the number of referrals coming from the highly important segment of currently employed individuals who are not in the job market.

If you’re still cynical, remember the children’s hospital example where 25% of all name only referrals were hired. With these dramatic results as an example, you can get extremely high-quality referrals under the “name-only” process if it is designed correctly.

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