5 Reasons Why Employee Referral Programs Fail

5 Reasons Why Employee Referral Programs Fail

Posted by Stephen Spiegel on May 8, 2018

Get a recruiting boost by avoiding these common employee referral program mistakes.

Get a recruiting boost by avoiding these common employee referral program mistakes.

Employee referral programs – just tell your staff, they’ll bring in the new recruits. An excellent idea, but a half-minded plan. Successful referral programs usually require analysis, planning, and savvy execution, which is why so many tend to crumble into dust.

The truth about employee referral programs

They work. Employee referrals are inexpensive, efficient, and effective.

Not only are referrals excellent ways of finding talent but they also boost retention. Referred hires tend to have a better understanding of the job, and company – in other words: they know what they’re getting into. In fact, referrals are less likely to leave their job.


Of course, the underlying benefit of referred candidates is, to a certain extent, that they already have the approval of at least one member of your team. However, sitting back and waiting for referrals to come in is only slightly more productive than playing the lotto sans ticket.


5 reasons employee referral programs fail

Perhaps the overarching problem with referral programs is they seem simple. That’s where the word “program” earns its definition – programs are the art of making something complicated easy. While it’s certainly not quantum physics, underestimating what it takes to develop an effective referral program is the first step towards disaster.

Here are 5 pitfalls to be aware of:

  1. Failure to plan. What attributes are you looking for in your new employee? How soon do you want to make the hire? How about incentives – are you offering any? How’s your staff going to find out? How do employees make referrals? While these aren’t difficult questions, if you don’t know your answers going in, then the only things you’ve prepared for are chaos (if you’re lucky).
  2. Failure to promote. If you don’t promote your program, or only mention it a few times a year, it’s likely to be forgotten. The most effective referral programs are integrated as a fundamental aspect of company culture. The point is, if you have a referral program and don’t promote it, you might as well just depend on luck.
  3. Failure to provide employee incentives. Chances are, most of your staff, if not all, weren’t hired for their recruiting talents. Anything outside of their daily work responsibilities adds might be asking too much. So, if you want engagement, make it worth their while. Cash, or gift cards – even extra vacations days – have a magical effect on the attention, and drive of most people.
  4. Failure to communicate. Part of promoting and keeping your project in the collective consciousness of your staff is effective communication. Even if your crew is aware of the referral program, if you don’t keep them up-to-date on what you’re looking for, the program is likely to drift into the nether regions of their consciousness.
  5. Disrespecting candidates. Recruiting can be stressful, know what causes even more anxiety? Looking for a job. All too often the hirer – albeit unwittingly for some – fails to extend a professional level of respect to candidates. Not only is it a poor display of etiquette, but the referred candidate is likely to complain to the employee who referred them, thus distracting them from their work.


A little feedback never hurts

You’re busy, your staff’s busy, job seekers are busy! That can make garnering productive feedback either time consuming, or impossible. However, without criticism and praise, how can you know how well your employee referral program is doing?

CrewHu can help. We offer customizable, 1 click surveys and employee recognition apps to help your recruiting team streamline their efforts. Our customers love our products, but don’t take their word for it, see for yourself: sign up for a free trial today!

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