Employee Referral Crossfire
In Search of a Bright Spark
Master Burnett Gerry Crispin
Every company should have a referral program. ERP hires fill more openings than any other Source of Hire. The more the merrier! ERPs produce better hires- EEs are less expensive, perform better and stay longer. Referral and ‘recommend’ are synonymous. Every employee should be asked to refer. Every employee who refers is equal. Referral programs are equally effective for every job family and every location. Employee referrals are the real deal. Other referrals are not worth pursuing. Rewarding Referrals with money is good. Bigger rewards are better. Referred candidates should receive special treatment. Employees who refer should receive special treatment. ERPs negatively impact diversity. Referrals that employees seek out are better than referrals initiated by candidates. Referral programs require little work once they are introduced. Social Networks will drive referrals through the roof.
ERP Myths or Simple Truths?
Master Burnett Gerry Crispin
71.2%
7.7%
5.8%
7.7%
7.7%
Just About Everyone Has A Referral Program
Source: CareerXroads Colloquium, 9/2010
What Percentage of Your Hires Are From ALL Referrals?
28.7%
% Referral Hires
# R
espo
ndin
g
Source: CareerXroads Colloquium, 9/2010
Career Fairs
3rd Party
Temp/Contract-to-hire
Rehires
Direct Sourcing
College
Career Site
Other
Walk-ins
Job Boards
Referrals
Source: CareerXroads SOH, 3/2011
2010 Sources of Hire [External]
How Many Referrals Will Yield 1 Hire?
REFERRALS
%
Res
pond
ing
8.1%
20.5
%
21.4
%
18.2
%
31.8
%
Source: CareerXroads Colloquium, 9/2010
How many Referrals does it take to make one hire?
Source: CareerXroads SOH, 3/2011
10.3 (N= 240,000 referrals)
Employees
% R
espo
nse
For
Eac
h Ty
pe
Spe
cific
Pos
ition
s O
nly
What Type of Referral Gives You The Most Hires?
Gen
eral
Pos
ition
s
Source: CareerXroads Colloquium, 9/2010
How Often Do You Promote Your Employee Referral Program?
31.4% 7.8%
11.8%
11.8%
17.6% 19.6%
(i.e. specific campaigns)
Source: CareerXroads Colloquium, 9/2010
Source: Cargill CareerSite
What Sources Are Productive For Diversity?
Source: CareerXroads SOH, 3/2011
Employee Referrals
CANDIDATE EXPERIENCE: Do you provide or promise externally referred candidates any special treatment? (i.e. unique to being a referral like a guarantee of an interview, promise feedback, etc).
NO
82.0%
Yes
18.0%
Source: CareerXroads Colloquium, 9/2010
How Do Candidates Learn About Your Referral Program?
Source: CareerXroads Colloquium, 9/2010
‘EXPERIENCE’ of CANDIDATE BEING REFERRED: Indicate which of the elements below are a part of your ER program.
Candidate is required to indicate the name of the Referring Employee in the application process.
Candidate is also asked about the quality of their relationship to their referral (i.e. friend, etc.)
Candidate is invited to contact recruiter after rejection even if they were not selected for final slate.
Source: CareerXroads Colloquium, 9/2010
‘EXPERIENCE’ of EMPLOYEE MAKING REFERRAL: Indicate Which Elements Below Are Part of Your ER Program.
All referring employees receive an automated acknowledgment to thank them for making a referral.
Employee is surveyed about the quality of their relationship to their referral.
Source: CareerXroads Colloquium, 9/2010
BONUS- GENERAL: Do you offer bonuses?
13.6%
79.5%
15.9%
9.1% Yes, even those making
referrals that do not become hires get something or have a chance to win something.
No, our program is a basic "Attaboy". No monetary incentive or product or service
awards are given.
Yes, a raffle or contest is periodically used
to incent referral behavior..
Source: CareerXroads Colloquium, 9/2010
BONUS- SPECIFIC: How Much?
Source: CareerXroads Colloquium, 9/2010
PROGRAM FORMALITY: Does Management Yield Results?
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Formal, Dedicated Budget/Staff
Formal, No Dedicated Budget/
Staff
Informal Managed Ad-hoc, No Management
2006/2007 2006/2007 TP 2008/2009 2008/2009 TP 2010/2011* n=267 n=40 n=252 n=45 n=41
Source: DJS ERP Benchmark Study (Formerly AIRS/DJS)
EXTERNAL HIRES PRODUCED: Overall versus Top Performing
26.2% 27.1%
35.0%
41.1%
46.3%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2006/2007 2008/2009 2010/2011*
Overall Sample Top Performing
Source: DJS ERP Benchmark Study (Formerly AIRS/DJS)
Measure Employee Referral Job Board Difference Cost per Hire (CpH)1 $2,306 $1,671 +$635
Offer Acceptance % 94.7% 78.4% +16.3%
Voluntary Turnover < 1 Year 6.8% 22.1% -15.3%
Voluntary Turnover > 1 Year 5.2% 14.9% -9.7%
Involuntary Turnover < 1 Year 0.9% 4.3% -3.4%
Quality of Hire QoH2 4.21 3.47 +21.3%
ERP VERSUS MAJOR JOB BOARDS: Beyond Cost per Hire
Source: DJS Private Client Study, 2008
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00%
Retention Rates
Performance Appraisal
Manager Satisfaction
Actual Performance
Promotion Rates
MBO Attainment
Bonus Compensation
2010/2011* 2008/2009 TP 2008/2009 2006/2007 TP 2006/2007
COMMON QoH MEASURES: Real QoH Measurement is Rare
Source: DJS ERP Benchmark Study (Formerly AIRS/DJS)
ERP CANDIDATE KNOWLEDGE: Fortune Hunters Do Exist, But Not In Numbers
Source: DJS ERP Participant Experience Study
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
$- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00
REWARDS AND PARTICIPATION: The Money Doesn’t Matter
Source: DJS ERP Benchmark Study (Formerly AIRS/DJS), 2008/2009
Source: DJS ERP Participant Experience Study
GET THE PITCH RIGHT: Market Opportunity Not Income
Source: DJS ERP Participant Experience Study
PRIORITIZATION: How Comfortable Are Employees With It?
Source: DJS ERP Participant Experience Study
PRIORITIZATION: How Comfortable Are Employees With It?
NEGATIVE IMPACT ON DIVERSITY: Not In Most Cases
TOP PERFORMING PROGRAMS DIFFER: Communications are KEY!
Source: DJS ERP Participant Experience Study
TOP PERFORMING REQUIRE EFFORT: Great ERP’s Rarely Just Happen!