Why Automation Undermines Employee Referral Programs
How to ensure success through high quality employee referrals

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EXECUTIVE SUMMARY

Employee referral programs (ERP’s) have the potential to be excellent sources for high quality new hires, and according to studies, employee referrals provide the highest return on recruitment investment.

Caveat EmptorAll ERP’s are not created equal.

In fact, the vast majority of hosted ERP’s do not rely on a good old fashioned referral to serve up a candidate for an open position.  Can that be right? Some programs even use automated skills matching, or encourage applicants to apply for a job, and then ask someone for a referral. These programs encourage the applicant to search and find someone already in their network who is a current employee, and then ask for a recommendation. Not only does this encourage employees to make bogus referrals in order to cash in, it defeats the purpose of a referral. What is lost in this process is the value of the referral itself.

Referrals work only when your employee takes the time to personally evaluate who may make a great candidate for an open position at their company.

They may in fact know several friends with skill sets that would qualify them for the position, but they also know things about them that make them poor hire choices. When a live person makes the referral, they are considering not only relevant skills, but also personality, work ethic, cultural fit, and career history. After all, there is more than just a referral bonus at stake. When an employee makes a personal recommendation, they are putting their own reputation on the line. This is a large part of the reason that employee referrals are so effective at delivering high quality employees.