We all love hiring people we know. Candidates referred by existing employees account for up to a third of most companies’ new hires. Employee referral programs are a common recruitment strategy for incentivizing and rewarding employees for attracting quality candidates to fill job vacancies.

Are All Referrals Created Equal?

Hiring managers often extend job offers to employee referrals without interviewing other candidates. When other candidates are interviewed, the employee referral is still most likely to receive the job offer. This outcome should not come as a surprise. Logically, there should be less risk in hiring someone who comes recommended. And, it isn’t necessarily a bad practice. The more you know about a candidate beyond their resume and interview, the better the odds of correctly inferring that they will do a great job for you. 

But not all referrals are equal. Nor does every referral turn out to perform well. So how do you know if the employee referral is the best candidate to hire, and what can you do to figure it out?

1. Don’t Provide Special Treatment

To start, treat all employee referrals as you would any other external candidate. They should go through the same hiring steps as everyone else.

Evaluate all employee referrals using the same hiring criteria. Put them through the same interviews and assessments as others. This allows apple-to-apple comparisons to be made with other external candidates being considered.  

2. Fact-Check

Second, fact-check your views and knowledge of the employee referral.

  • How much do you really know about them over and above any other candidate in the process?
  • Is this a person you have first-hand job-related observations and experiences with because you previously worked with them or managed them? If yes, use that job-relevant knowledge as input into your hiring decision.

First-hand knowledge and observations of how someone performed during critical decision-making or make-or-break moments of getting work done are worth their weight in gold. Observations of actual work performance are strong predictors of how well they will do in your job. There is a lot of truth in psychology that past behavior is predictive of future behavior. Chances are, if they’ve done it well before, they’ll do it well again.  

However, most employee referrals are simply someone an employee casually met and shared the job with. They could be a neighbor, a person introduced to them, or someone they sat next to on a train or plane. These candidates are not well known by the employee referring them and have little to no insight into their work capabilities. Hiring managers would be well advised to blind-review these candidates, meaning they are better off “not knowing” they were referred. This avoids making errors in judgment related to the expectancy bias that a referred candidate is recommended and better.

3. Consider Work Culture

Finally, take work culture into consideration. Cultural changes have big effects on employee performance and behaviors. Not everyone thrives in all cultures. For example, some leadership and management styles don’t translate well in collaborative, shared decision-making organizations. If your knowledge of an employee referral is based on a company culture very different from the current one, don’t assume past successes will necessarily translate to future successes.  

It’s smart to ask employees for referrals to people who may be interested and qualified to fill your job vacancies. Employee referrals are a vital source of talent and should be evaluated in the same way you would any other external candidate. Consider also a “blind review” of referrals who do not share a work history with the employee referring them. Remember, just because an employee referred them and knows them doesn’t necessarily mean they are your best choice. 

Need help to make correct hires happen in your organization? Want to learn how to do this better? We here at The WorkPlace Group are ready to help.  For more information, please click here to contact us today.

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