Dr John Sullivan Talent Management Thought Leadership

Corporate referral results are usually limited by design flaws, so supplement them with team-generated referrals.

Unfortunately, few team leaders know about or utilize what is literally the most effective recruiting sub-program, which I call “Team Generated Referrals” (or TGR). Instead, most teams exclusively rely on the standard corporate Employee Referral Programs (ERP). It routinely fails to reach its amazing potential for being the top source for hiring volume and new-hire on-the-job performance. 

So, if you are a team’s hiring manager (or a recruiter assigned to a team), I recommend that you solve your teams’ recruiting problems by supplementing your corporate referrals with referrals generated by your team members exclusively for its open jobs. Under this TGR program, the name generation, the candidate assessment, the relationship building, and the conversion into a referral are all done locally by team members. So that with the assistance of your recruiter, your team can now generate over 50% of your team’s new hires from both types of referrals!

Part I – The Top 5 Reasons Why Team Generated Referrals Are Superior

You shouldn’t ignore quality employee referrals passed along to you from your centralized Employer Referral Program (a.k.a. ERP). However, if your corporate program is not generating a majority of your hires, you need to contribute to fixing that corporate ERP program’s design flaws. Or find a way to supplement it with an alternative source of referrals (I recommend the latter option). There are many reasons why every high-impact team leader should institute a significant effort to increase its team-generated referrals for open team jobs. Those TGR advantages include:

• The “do it for the team” motivator is superior to any monetary motivator – this team referral effort has “helping the team” as its primary goal. The referring employee is much more likely to make only quality referrals because the new hire will be working alongside teammates that the referring employee sees every day. Each teammate will benefit from a great referral because it will allow them to work alongside and learn from the very best recent hires. “Do it for the team” is a superior goal to the traditional monetary one because it will help many others besides yourself. The referral is supposed to provide positive help for their colleagues and friends. It is much less likely that any team member will, even once, make a low-quality “junk or whimsical referral” simply for the money or to do a favor for a friend or relative.
• TGR is a focused recruiting effort – corporate referral programs serve so many varied corporate interests that their designs must include many compromises. The team-generated referral effort is, instead, much narrower and more focused. Every team member and the assigned recruiter thoroughly knows both the team’s needs, the referring capability of each, and the jobs eligible for a referral to occur within the team’s functional area. The professional networks of each team member are much more likely to contain multiple viable referral prospects for each of the team’s new job openings.
• Requests for team referrals are more likely to be read and acted upon by team members – both the volume and the content of most corporate referral requests emailed to employees come close to qualifying as “ERP spam.” And these companywide requests will likely waste the time of most employees that simply don’t know anyone in the functional area where the job is open. In direct contrast, TGR requests only go to members of the same team, so the requests are almost always relevant to them. The requests themselves are likely to be coming from someone that the target employee works alongside. As a result, these “requests for referrals” will almost always also be personalized. Altogether these factors make it more likely that the request for team referrals will be opened, read, and responded to quickly.
• The team referral process is usually faster – when compared to small team referrals, typically, processing corporate ERP referrals is painfully slow. Team-only referrals typically move much faster because the talent vacancy negatively impacts everyone involved. In addition, there are almost no junk referrals to clog the entire process. It’s much more likely that familiar teammates will quickly help each other find prospects and convert them to actual referrals. The facilitating recruiter assigned to this team, their built-up knowledge of this team and its needs will make it easier for them to facilitate the team’s local referral success. 
• Team referrals also include a talent pipeline for future openings – most corporate referral programs focus only on referring candidates for a currently open job (like a snapshot picture). In contrast, a team-focused effort is stretched out so that instead of seeking potential referrals for both current and future openings (like a moving picture).

Part II – An Idea Generation List For Recruiters Seeking Potential Referral Names

This list starts with the top five proven team referral approaches to try first. Then this “idea stimulator list” continues with a series of additional ideas for generating names for potential team referrals. 

The top five ideas to try first include:

1. Start by getting referrals from targets that the team already knows – after the obvious approach of encouraging team members to go through their contact lists for names. The recruiter should continually furnish the relevant team members with the names of individuals that the team already knows and is liked. Team members can then volunteer to update the team’s assessment of these individuals. And then to develop a nurturing relationship that should turn the best into team referrals when justified. These “we already know them” names should come from the following hot sources.

• Boomerang rehires – former top-performing employees who might be willing to return should be tracked and kept in touch. Be aware that some that can’t return right now will still be loyal so that they will likely still be willing to provide the names of potential referral candidates to consider.
• Finalists that turned us down – finalists’ names for one of our jobs that rejected our offer to stay where they were. Supply team members with these finalists’ names. They may now be more willing to leave based on the chance that time has passed.
• Silver medalists – candidates who came in a close second for relevant previously open jobs. And now that more time has passed since their first assessment, they are more likely to be qualified.
• Recent referral dropouts – qualified referral candidates for our previously open jobs. For some reason chose to drop out of our process before a hiring decision was made. These individuals should be revisited now that significant time has passed since they chose to drop out.
• Current employer referrals – be aware that some recently submitted referrals are likely to be willing to help with names that currently work outside of this open job. So discreetly ask each to refer to at least one leader working in a job above them. And one rapidly developing employee working in a job below them.
• Most wanted list – the best teams proactively identify prominent game changer experts who may eventually join our team after a long-term hiring effort. So if you don’t have a most-wanted list, start one. And then assign at least one team member to convince each list member to move closer to becoming a referral.

2. Generate referral names from conference attendees – because the very best regularly attend in-person and virtual conferences and certification sessions. Develop a process that ensures that the recruiter reminds attendees from the team that they are responsible for bringing back at least three names of potential referrals from the event. Also, remind attendees that conference speakers and those that ask the best questions during Q&A are among the best targets to pursue.
3. Get referrals from the team’s new hires – because new hires are just coming from an extensive outside job search. These new hires are very likely to know the names of (and have met during interviews) several top performers that our team may not be aware of. So target them for names during the team’s onboarding process. Also, remind them that they sort of owe the recruiter a debt for helping them land this job. During the onboarding, make them fully aware of their role as 24/7 talent scout. And then specifically ask them to provide the names and help you recruit the very best functional talent that they know (with a special emphasis on talent from their last company).
4.  Implement “Give me five” proactive prompted referrals from your top performers – this most effective of all referral sub-programs has been pioneered by Google. It takes advantage of the fact that “great people know other great people.” And the fact that a referral from a top performer employee referral will produce an amazing 3 times more than the referral from a below-average performing employee. Start the “give me five” initiative by first identifying and then proactively approaching your team’s top performers in person where possible (usually during a break at their team meeting). Begin the conversation by praising the top performer’s industry connections. And then, you ask for their help with your task of identifying five high-quality referral names for an open key team job. If they hesitate when providing names (as many do), you should quickly prompt their memory.  Remind them of the required skill sets, the names of teammates that you want the candidate to emulate, or the major companies most likely to employ this type of top talent. You can also prompt them by asking them to name the most innovative or the best leader working in this open job. By prompting their memory in several ways, you greatly minimize the likelihood that you will get the typical “I don’t know anyone” answer. 
5. Finally, accept “name only referrals” – some of your top-performing team members (and best referrers) will simply not have sufficient time to assess further and nurture potential referrals. So, assure them that the team’s recruiter is willing to accept “name only referrals” (a name and a link to their LinkedIn profile). These valuable names can be passed on to other teammates for additional follow-up assessment, nurturing, and relationship building. 

Additional name generation ideas to try

• Emphasize the need for diverse referrals – although data reveals that well-designed referral programs have no negative adverse impact. The recruiter and the hiring manager should still remind each teammate in all communication that referrals are expected to contribute towards filling the team with quality, diverse talent. In addition, the recruiter should reveal all the best current sources for identifying diversity talent.
• Ask former team members that are still with the organization – former team members that recently got transferred out or promoted will likely still be aware of some top talent. So identify them and ask each to provide at least one name. In particular, also ask former managers and previous recruiters for some high-value names. If feasible, consider asking vendors you work with or even your major customers for names.
• Ask the references of recent hires for names – because after you hire someone, you know the accuracy of the recommendations from their references. Have your recruiter contact the best references and ask them “if they know anyone else” that should be considered in the same job family. And then pass those names on to your team members.
• Help us find your replacement – when a key team member decides to leave. Persuade them to soften the blow by accepting partial responsibility for finding the names of possible replacements after you depart so that the team is not left in a lurch with their departure.

If you can only do one thing© – pre-identify your top 2 team members with the best external talent contacts and relationships. Prioritize them and limit approaching them for their help to no more than four times each year when you need an exceptional referral.

Part III – Administrative Actions To Consider For The Team Referral Program

In most cases, team-generated referrals should, of course, be simultaneously formally submitted to the corporate employee referral program. While simultaneously continuing to nurture, assess, and sell these corporate referral submissions at the team level. In addition, administratively, at the team level, the recruiter can start some essential actions. That will further the chances of success for your team-based referral effort. Those administrative actions include

• Secure the hiring manager’s buy-in through education – success requires that the hiring manager continually push, communicate and reward team referrals. You can help ensure that the team manager supports your effort by showing them how their team’s recruiting results will be dramatically improved when the manager fully encourages employee participation at every stage of the referral process.
• Every employee must understand their role as a 24/7 talent scout – during the team’s version of onboarding. Every new hire must be made fully aware that in addition to their “day job.” They are expected to be constantly on the lookout for potential referrals. Start by making every new team member aware of their daily interactions with industry professionals. They (even more than recruiters) have the most opportunities to identify, meet, and sell the highest quality talent on becoming a referral. Make each new hire aware that this outreach is valuable for recruiting purposes. But it also helps to enhance their professional learning.
• Prioritize jobs and likely referring teammates – the recruiter needs to help the team’s hiring manager identify and prioritize the jobs that can be best filled through referrals. Then the recruiter should recommend which individual teammates should be assigned a referral role for each needed open job—teammate’s current contacts or their relationship-building capabilities.
• Minimize low-quality referrals – the lowest quality referral candidates come from “people that your employees don’t know” (i.e., the person “found me” and asked to become a referral). Recruiting leaders and hiring managers must realize that the best way by far to minimize junk or family/friend referrals is to require the referring teammate to show that they completely know the work of each of their referrals by requiring them to prescreen potential referrals. Then to convincingly reveal how hiring this person will “raise the bar” compared to the departing employee. These four qualifying factors – superior work because they have superior skills, fit the team, finally, by attesting that the person is currently willing to accept an interview opportunity with your team. 
• Use a CRM approach – to maximize their effectiveness as referral facilitators. The recruiter must use a customer relationship management approach (CRM) with their teammates and likely referrals. This customized and personalized communications approach makes every teammate feel like they can provide an opportunity to make a difference for their team by identifying and nurturing potential referrals.
• Help struggling teammates with a referral buddy – some teammates will need help identifying names or building prospect relationships. You can speed up the development of their referral capability by temporarily providing them with an already proven successful “referral buddy.”
• You must be highly responsive to teammates and referrals – the #1 overall critical success factor for maintaining a continuous stream of high-volume quality referrals over time is responsiveness. So you must avoid having too high a level of referrals so that you can maintain a noticeably high level of responsiveness with both the referred candidate and the referring team member.
• Provide team employees with powerful stories – the most powerful tool for selling referral prospects are “authentic” compelling stories about the team. Provide team members with an updated list of stories that reflect the culture of the team and the excitement of its work. Currently, it also makes sense to include stories about action steps that the team has taken to make its workplaces safe from Covid.
• Expand your referrals to college hires – few seem to realize that today’s best college students are completely connected with other students and many professionals. So it makes sense also to allow your team’s recent college hires and your employees to make referrals from this soon-to-be graduate college pool.
• Encourage internal competition – work with the manager to foster a reasonable level of competition within the team. Consistently maximize the number and the quality of referrals.
• Measure performance – the lead assigned recruiter, must ensure that the team’s referral effort is data-driven. This should include developing program metrics and measures that verify whether team referral new hires continue to have the highest level of on-the-job performance among all hiring sources. And after every major team referral success and failure, the recruiter must identify and implement any needed improvement actions.

Final Thoughts

Most recruiting shortages fade when your employee referral program generates over 50% of your new hires. Unfortunately, most corporate referral programs are not data-driven, so they contain inherent design and process flaws that severely limit their capabilities. So smart recruiting leaders quickly realize that the best way to increase your total referral volume and quality is to supplement the corporate ERP program with an equal volume of team-generated referrals for the team’s open jobs. Fortunately, encouraging referrals at the team level is relatively easy to do, costing almost nothing. So it has a record-breaking ROI.

Author’s Note 

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