The first question most people ask when the idea of an external referral program is broached is, “What’s an external referral program?!” .

Most professionals are familiar with internal referral programs, and many likely use them frequently when trying to fill positions. You may be one of them. You’ve got nicely designed promotional materials and an enticing reward structure that includes cool prizes, cash, time off, and other powerful incentives. And yet you still find yourself with positions you can’t fill, and inevitably you fall back on job boards to fill in the gaps.

Why Are so Few CHROs Promoted to CEO?

A few weeks ago I had the chance to attend my first DisruptHR-Tampa event and left quite impressed. I had the opportunity to listen to many knowledgeable speakers and one that really impacted me was John Wilson CEO @ WilsonHCG . John offered some interesting statics and reasons why so few CHROs become CEOs within Fortune 500 companies.  Having sold into HR over the past 20+ years and currently selling a new HR technology solution into HR, this information was eye opening and I decided to explore further.

What does it take to become a CEO? Is it all about your pedigree? Do you have a better shot if you attended a school with an elite MBA program? Or is it all about who you know?

It turns out that none of these are correct. While they can help, they aren’t necessary and generally aren’t predictive of future career performance.

According to the CEO Genome Project, a ten-year study that gathered data on 17,000 CEOs and closely analyzed 2,600 of them for specific characteristics, the most predictive factor in reaching CEO is taking big risks.

Scientists recently managed the first image of a black hole in space. And as momentous an event as this was, it doesn’t affect Preferhired Referrers as much as client black holes do. These are black holes we’re trying to avoid, not catch on camera. Client black holes behave in a way that is unfair to our Referrers, and at Preferhired, we take the people on both sides of our referral hiring equation equally seriously. So client black holes are a problem we’ve worked to alleviate.

Imagine for a moment that you were interested in watching a good movie on TV one evening, so you posted on social media for suggestions. You’re likely to get good ideas from your friends. They have an incentive, because of your existing relationship, to want to help you. But you aren’t likely to hear from people you don’t know that well.

How Referral Recruitment Can Help Find Your Next, Quality Hire

Hiring can be expensive and time-consuming. Whether you’re paying per click or paying per post, if you’re not getting the results you’re after, you’re wasting a lot of money. And if you’re pouring through listing after listing on multiple job boards, you’re spending far too much time for poor quality results.

Employment as we know it is undergoing a massive shift right now. Large numbers of people are abandoning the standard work week world of working for “40 hour per week company” jobs for the freedom of the new freelance world. This new employment landscape, the gig economy, is transforming our relationship with our jobs.

It’s no secret that referral hiring is growing in popularity as one of the top ways for companies to find new talent. Referral hires tend to fit into the workplace culture easier, onboard faster, and stay with a company longer, making referral hiring a desirable way to go - especially if you find yourself with high turnover roles. So the question isn’t should you be using an employee referral program, but rather how you can use it to ensure the best results.

A fruitful employee referral programs needs a relevant incentive to stir up some excitement. Many companies reward employees with a cash reward if their referral is hired on successfully. It doesn’t even have to be $1000-$5000 type of bonus, rather it should be something that tells your referrer that you appreciate their help in filling a role. It’s essential that this reward is given in a timely manner; if not, you’ll lose all the goodwill.  

Developing an employee referral program (ERP) is a go-to recruitment strategy for a hiring team looking to make strong long-term hires in a challenging talent marketplace. What isn’t easy however, is building a culture of employee engagement which fully empowers every individual within the organization to begin contributing at this deeper level. So, before you try to launch the next big ERP campaign, some in-house clean up needs to be performed first.

Human resources often gets a bad wrap, and is accused of being an unorganized and chaotic part of the corporate machine. While for many HR professionals the saying, “those who live in glass houses…” comes to mind when faced with these accusations, we do have to take some responsibility for the shred of truth that exists here. Many HR organizations across the board are not performing at tiptop shape for one reason or another. It falls to those sitting in the driver's seat to identify and address some of the hot-button problems currently out there.

Getting to the point where your decisions are as valuable as other verticals in the business is the first obstacle, but once you've obtained that seat -- now it's time to hold onto it. Human resources isn't a profit-generating business unit, but it certainly saves the company just as much in hiring expenses and other related costs. 

It has been a long standing school of thought that if you hire heavily through referrals, diversity within an organization suffers. Since referrals only account for less than 10% of the average applicant pool, they can not be solely responsible for killing an organization’s diversity. However, the general perception was founded on the basic principle that people tend to gravitate towards, and maintain circles of association, with people who they feel are “like them.” This is a very basic unconscious bias that begins in childhood (think about your old high school lunchroom) and continues into adulthood.