Hires Per Employee Referral

Gerry Crispin, who with Mark Mehler runs the CareerXroads consultancy, sent over some new stats on employee referrals. CareerXroads surveyed 56 large, well-known employers about their employee referral programs.

More data from the study’s coming up in your November Journal of Corporate Recruiting Leadership.

For now, a couple of interesting graphs (click to enlarge).

First is a breakdown of the percentage of jobs being filled by referrals (albeit from a fairly small sample).

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And, here’s a look at how many referrals it takes to yield one hire.

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5 Comments on “Hires Per Employee Referral

  1. We all know that the idea of a ‘single source’ is patently wrong and artificially created from how we collect data.

    On the other hand, recruiters are increasingly gamed by their own technology (ATS algorithms that weight referrals heavily) and the ease with which job seekers can find internal connections via social media to then ‘consider’ nearly 100% of candidates with a referral (however else they came to apply).

    The result is that a disproportionate number of those with referrals will be on any final slate. This is reflected in the high percentage of hires attributed to Employee Referrals- so much so that any coach of an active job seeker must emphasize that acquiring a referral is an essential component of a successful job seeker’s strategy.

    Mark and I are examining this phenomenon (not for the first time) in a webinar next week with the companies that participated in the survey and we hope to share some of the issues we have seen develop over the years at next Spring’s ERE in San Diego in a shared discussion session with Master Burnett (John Sullivan and company) as they are in the process of looking at the same issues through their unique lens as well.

  2. Gerry, curious if your survey also probed what percentage of those employee referrals were converted into interviews. We all know that in a slate of 5, regardless of source, one is getting the job.

    Did your survey reveal a higher percentage of candidates would be accepted for interview by managers if they were an employee referral?

    Our data has suggested that, but it has been contradicted by several factor, mainly what I can ghosts in the machine. Some ATS data sorts make that type of metric difficult to track consistently, and it’s a metric that is rarely tapped, for whatever reason. It also becomes blurred by social networking activity, where recruiters claim they own the referral. Gets blurred even more when the applicant has the ability to choose how they found out about the opportunity dueling the application process.

    Any insights would great.

  3. A modest proposal: new hires and existing employees are informed that as part of their duties, they are to refer at least one person per year who is hired, for which they will receive payment of some thousands of dollars. (Allowances would be made for the “socially disabled”.)
    Employee referrals are considered a source for which internal recruiters receive credit, so there is “buy-in” from Recruiting.

    Cheers,

    Keith

  4. Andrew, insights are easy. Data, as you pointed out is hard to pin down with any degree of confidence.

    One can infer that if companies report an average of 33% of all their external fills are due to (in part) employee referrals then AT LEAST 1 person was on the final slate (of 5) and interviewed for that %.

    Then assume an average of 100 people applying (candidates) for a given job from all sources but only 25 ‘qualified and considered’ (applicants). Finally assume the 25 are reduced to 5 finalists interviewed through a variety of screening tools….so, the probability of being interviewed is 5% in general but 20% if you really are qualified to begin with…and can articulate that to the employers satisfaction.

    Now, for those jobs where we know at least 1 referral was interviewed, lets assume he/she was the only one interviewed but that there were another 3 others who applied that weren’t (I can support with data that it is highly unlikely to have more than 4 ERs for any given average job). I would now argue that of the three that weren’t interviewed only two were NOT qualified and only one was therefore eliminated from the screening (of the 25) prior to selecting the final slate to be interviewed.

    QED All things being equal, the minimum probability of a person who has applied with ER being interviewed is 25% regardless of qualifications and 50% if qualified (for those jobs where we KNOW the position was eventually filled by a referral).

    So, assuming my numbers hold (and one could argue violently against them for a given opening that wasn’t eventually filled by a referral), then referrals are anywhere from 2.5 to 5 times more likely to be interviewed with an ER than without.

    I believe if we really could collect and analyze real data it would be 7-20x more likely.

    Just sayin’

  5. Keith, I like your thinking although I’m much more a fan of empowering the job seeker so my thoughts go to
    – publishing the % of jobs filled by employee referrals and the average number of applicants with referrals per job on the company career site.
    -publishing for hard to fill positions the number (but not the names)of employees in those jobs by university they graduated from, former firms they worked with, professional associations they belong to etc. along with the suggestion that folks sharing this background might like to track them down.
    – linking volunteers willing to ‘chat’ or respond to inquiries IF (and its a big if) the prospect has a strong desire to hear what it really takes to get in and succeed…and who might, at the end of the day, be their employee referral…or not.
    – send a note to the boss of the employee making a referral that at least meets minimum qualifications so that in addition to any bonus, they are also acknowledged personally by leadership.
    – promise any candidate who really does have a ‘recommendation'(the ultimate referral)from an employee that they can arrange feedback from the responsible (trained)recruiter if they are not hired.

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