Employee referral programs routinely produce the highest volume and the highest quality hires in corporate recruiting. These employee referrals are so effective simply because they turn every employee into a recruiter. When every employee is a recruiter, you dramatically increase the volume of recruiters (every employee) looking for talent. In addition, because employees have broad social networks and they continue looking outside of work, you also, in effect, expand the amount of time (24/7) your recruiting effort is active.
Unfortunately, our extensive research into the referral program practices of over 600 employers has shown that most corporate referral programs suffer from low expectations, poor design, and weak results. If you are not getting at least 50% of your hires from employee referrals, either you have a company that your employees are ashamed of or you have a poorly designed referral program. If your program is under-performing, one of the simplest things you can do to improve it is to provide some of your key employees with “referral cards” that they can hand to promising potential applicants.
Tips for Developing Compelling Referral Cards
The use of cards in recruiting is a hot topic these days, in part because of the controversy related to a U.S. Army recruiter who placed his recruiting business cards in the pockets of camouflage-style pants at a Target store in South Carolina. Well, the mother of a 13-year-old boy who bought one pair of the pants was outraged. And, although the recruiter was not disciplined, it still highlights the need to use referral cards correctly.
If you decide to offer referral cards, here are some tips on how to do it right:
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- Limit those who can receive the card. You don’t want your employees handing out employee referral cards to every “Tom, Dick, and Mary” they come across. If everyone gets handed one, they immediately lose their prestige value. The fact that they are hard to get makes them, in turn, an honor to receive. So, instead of flooding the market, only hand out referral cards to individuals with higher-than-average potential.
- Not all employees can hand out cards. Because not every employee has the same opportunity to run across and successfully assess potential stars, you don’t actually want every employee to be handing out referral cards. Now, that doesn’t mean that every employee can’t make referrals (because they should be doing that), but it does mean that you should limit the number of employees that is allowed to hand out referral cards. Individuals who should receive these specialized cards include executives with a title that impresses (e.g., “Wow, I got this card from the CFO”). Next, limit referral cards to individuals who a manager determines to have the capability of identifying or assessing great talent. Finally, provide them to individuals with a large number of opportunities to meet potential candidates (this might range from the receptionist and outside salespeople to individuals who attend a large number of trade shows and those who teach, write, or speak regularly).
- Limit the number they can hand out. If you’re targeting truly exceptional individuals, it would be highly unlikely that any employee would meet dozens of them each month. And, because referral cards should only be given to potential top performers and innovators, you should limit the number that any individual can give out each month. This target quota should range between 3 and 10 a month, with exceptions being made wherever past experience has proven variations are a good idea. Obviously, individuals who hand out cards that resulted in a high number of hires (and vice versa) should have their quotas adjusted accordingly, based on their success rates.
- Provide feedback to card distributors. Even after the cards have been handed out, it’s important to assess whether they are having the desired impact. This means that once a month or once a quarter, you need to provide feedback to the individuals who are handing out the cards about 1) the number of “their” cards that resulted in employment inquiries, 2) how many of the responders were good enough for interviews, and 3) how many responders were eventually hired. By providing this feedback, you can help ensure that those giving out the cards are educated about what is working and what isn’t. If you find that a particular individual has a low success rate, first talk to him, then eventually stop giving him referral cards because you don’t want to clog the referral card response system with low-quality names.
- Expedite referral card inquiries. Because the referral card program is, by design, supposed to be quite selective, you have to handle those who receive the cards like they are “A+ quality,” and thus, top-priority applicants. That means that applications from these individuals must be coded and prioritized. I recommend that you set five days (after they’ve made an employment inquiry) as a limit to let them know whether they are to be scheduled for an interview. It’s critical that these individuals receive priority because that’s precisely what getting one of these referral cards should mean (i.e., “You are someone special who we want to talk to immediately”).
- Offer a referral bonus. Paying a bonus for new hires under any referral program is always a good idea. Some mistakenly think that finding referrals should be the standard part of everyone’s job. But, the fact is that a good deal of referral work that is done by employees routinely occurs outside of normal work hours, and, as a result, it should be rewarded. In addition, referral bonuses of up to $1,300 do have a measurable impact on the quality and the number of referrals that a corporation receives. If you find there are cases when managers or others making referrals would have a conflict of interest should they receive a bonus, offer an option for donating the bonus to their favorite charity.
- Encourage executive involvement. Very few things have the same impact of energizing the employee population about referrals as having the CEO and senior executives frequently use, and then boast about, the impact of employee referral cards. As a result, start off by trying to get the CEO to be a role model in handing out cards. It’s also important to note that having a large number of senior managers utilizing, and then seeing, the result of the referral cards will boost both the visibility and the reputation of the recruiting function.
Make the Content of the Referral Card Compelling
Anyone can hand out a business card. As a result, getting one doesn’t impress very many people. In direct contrast, a referral card should be so compelling that you feel it’s an honor when you receive one. Some of the essential content elements that make a referral card compelling include:
- The Design. The actual design of the card should be unique enough that when you see it, you immediately think it is something special. For example, Southwest Airlines used a referral card that looked exactly like one of their iconic plastic boarding passes. Once you saw it, you knew it was not a standard business card. Some firms choose to just put their referral messages on the back of their standard business cards, but if you make this mistake, you will get a much weaker response rate. The best cards reflect something unique by their shape, color, print, or texture. Generally, when it comes to size, all referral cards are larger (so that they stand out) than standard business cards.
- A Slogan. All great referral messages should also be put in the form of the slogan that reflects what it’s like to work at your firm. The slogan should be short, easy to remember, and something that sends a direct “I want to work there” message. Simple referral slogans include “more than a job,” “it’s an adventure,” “tired of working ‘inside the box,'” “join us,” “if you have a passion for customer service, we have your dream job,” or “if you are a game-changer, you’ll love it here.” Be sure to pretest your slogan to make sure that it impresses and sends the correct message.
- An Action Driver. Great referral cards not only excite the individuals who receive them, but they also drive recipients to take the necessary actions to actually apply for positions. Action drivers (that make you apply) can take many forms. They can be related to speed (“Call today, and we will let you know within the next 5 days”). Action drivers can relate to probabilities (“If you were directly handed this card, the odds are over 75% that you qualify for one of our positions”). Or, they can be designed just to make the individual feel special (“Whether you’re interested in a new job or not, I just wanted you to know that the way you handled yourself was special”). Test your action phrases and content to ensure they cause people to actually apply for a job. In addition, you can offer the person who receives the card a small reward or gift for applying (e.g., a $25 Starbucks card), if you’re serious about getting these targeted individuals to apply.
- A Unique Website or Contact Person. If you make the mistake of sending all responses from referral cards to the standard corporate website, you will not be able to identify and then prioritize these individuals. Instead, I recommend that you include on the referral card a unique website page (designed specifically for these pre-assessed individuals) or the e-mail address/phone number of a designated recruiter who knows how to handle these high-priority referrals. Remember, if you don’t handle these applicants with special attention, then you should remove any message on the card that makes them feel special. Some organizations also include the name and contact number of the person who is giving out the card. This is a good idea if there is a high probability that card recipients will work in the same business unit that this individual manages. Just remember that customized referral cards are more expensive to print that generic ones.
An employee referral card that contains a powerful message and makes a lasting impression on a recipient is an extremely powerful tool that is, unfortunately, seldom used in corporate America. In fact, I estimate that fewer than 5% of referral programs have a well thought-out referral card element.
If you want to take advantage of this powerful tool, I urge you to take your time to ensure that all of the elements that I’ve cited above are included in the program and on the card itself. And, if the referral card process is designed correctly, almost immediately you’ll have data to show that it produces high-quality hires. Any questions?