Short and Scholarly: Where Are Your Referral Employees Coming From?

In a recent study, published in Personnel Psychology, the concept of referral hiring was explored. The study, titled Uncovering the Nuances of Referral Hiring, explored this topic by examining how referral employees might perform based on how their referrers perform within the organization. The details of the study are as follows:

5 Key Takeaways

1. While many studies in the past have focused on how referred job candidates and employees perform, researcher Jenna R. Pieper from the University of Nebraska-Lincoln wanted to study how the quality of the referrer (e.g. the current employee) influenced the quality of the referree (the job candidate/future employee).
   
2. The study had several hypotheses, they were: referral hires will perform better than non-referral employees and have a lower likelihood of voluntary turnover; the performance of the referrer at the time of hire will relate to the referral’s performance as well as the likelihood of voluntary turnover; the relationship between referrer tenure and referral performance is related so that if the referrer has a good tenure and remains, the referral’s performance will remain positive; referral’s will perform better and remain committed to the company as long as the employee who referred them remains at that company; and finally referral performance will be higher if the referrer and the referral are working together, and that will also lower the risk of voluntary turnover with the referral.
   
3. In order to gather information on this study, a two year window of data was provided by a US call center, including weekly performance data of entry-level employees, requirements for the job, training periods and methods, and monitored performances.
   
4. Of these five hypotheses, there was a mix of results. Firstly, it was found that there was support that referral hires will perform better than non referral hires, and that referral hires were “slightly less” likely to have voluntary turnovers. Secondly, it was found that referral hires from high performing employees would, overall, be better performers themselves. Thirdly, it was found that when the referring employee leaves the company there is a higher chance that the referral will voluntarily leave the company.
   
5. There were also a number of hypotheses that were not supported. Namely, it was found that the hypothesis regarding a referrers tenure and a referrals performance have no relationship on each other. Additionally, referral performance was not found to be higher or lower when the referrer remains employed. Finally, no relationship was found between referral and referrer job performance or tenure under job congruence.

Referrers, Referrals, and You

It’s no secret that job referrals are the best way to recruit. It’s been demonstrated in the past that you’ll get better employees, have a lower recruiting cost, and have more committed current employees with things like a job referral program in place. However, the question of “where are these referrals coming from?” should be on the forefront of your mind.

Though this study didn’t prove every single hypothesis it set out to prove, it did provide enough valuable insight for you to be aware of the next time you examine a referred candidate. Namely, you shouldn’t just see the candidate as a referral from a no-name employee – you should be evaluating how the employee has been doing as well. Not for the sake of performance per se, but more so that you can be aware of where your current employee stands in the company and if they’re at-risk to leave the company sometime in the near future. A referral will be dedicated to the job, but they’re also going to be dedicated to the referrer, and that means you’ll want to make sure you’re not hiring a candidate who is at a higher risk to leave because their connection to the company left too.

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