Referrals

On March 2, 2012, in HR Scoop, HRExaminer, Recruiting Strategy, Recruiting Wisdom, by John Sumser

Is the 6 degree principle relevant in human recruitment?

While it has become common to refer to one’s collection of friends and connections as a network, and to accept that the 6 Degrees principle applies universally, things don’t quite work that way.

Since social media involves people who supposedly know each other, people assume that friends and connections constitute a network that will behave along the lines of Malcolm Gladwell’s work, ‘Six Degrees of Separation.’ The idea is that it’s a simple matter for network referrals to be used to fill a company’s workforce requirements.

“6 Degrees of Kevin Bacon” (6DKB) game is often used to illustrate the way that people are connected or ‘networked’. 6DKB is a trivia game based on the concept of the small world phenomenon. It rests on the assumption that any individual can be linked to actor Kevin Bacon within six steps.

While it has become common to refer to one’s collection of friends and connections as a network, and to accept that the 6 Degrees principle applies universally, things don’t quite work that way.

The fact is that the 6 degrees idea depends on knowing who you are trying to reach. If you know the person’s name, you may be 6 phone calls away. If you don’t know their name, it’s an entirely different problem. Then, you are an infinite number of degrees away. And, that’s the problem you face when you are trying to recruit employees.

Referrals are the best way to find new employees, right?

Sort of.

You are no more likely to hire all of your employees through a referral program than you are to broil everything you eat.

When you’re hunting for team members who will give the company a powerful competitive edge in a specific technology, do you want the VP of marketing’s frat brother or the Nobel prize winning scientist? Conversely, when you’re staffing a call center, do you want a hot shot Harvard Business School graduate or the brother-in-law of your best performer?

It is critical to never use referral programs to staff functions with check writing authority. The financial security issues are simply too great. Each position should be closely evaluated to make sure that the benefits of a referral process outweigh the disadvantages.

Referrals, like any Recruiting methodology have their place. They can be a short-cut to the perfect employee. They can also cause culture-rot if managed without care. Tapping into the collections of friends your employees know on social media is no panacea

All referrals are not equal. Referral programs range in design from high volume candidate flow drivers to the sort of referral you might make about a bottle of wine or a good restaurant. While the implementation approaches range widely in effectiveness, the idea that all referral programs yield predictable and repeatable results persists.

For the most part, social media driven referral projects boil down to betting that a network of friends can be converted into a competitive workforce. Is that really a smart idea?

 
  • http://twitter.com/PJradloff Pete Radloff

    You have to be careful with EE Referrals. There is a certain threshold that when you cross it, you run the risk of having a more “inbred” environment.  What that threshold is varies, but I’ve typically seen the appetite for that being in that ~35% range. 

    They are a great source indeed, and should be cultivated. It also speaks to how employees feel about the company. If they did not like it, they would not refer people there, regardless of how much they are being paid. 

    While we want to cultivate an environment of EE referrals, we need to make sure that it is not a shoe in for getting the job. Nothing destroys company culture quite like nepotism. 

    Great Read John. 

  • Gerry Crispin, sphr

    Great article and valuable thoughts on referrals. I enjoyed the opinions surrounding them but some alternative data would be helpful.

    If I may, i would like to make a couple comments regarding the historical accuracy, appropriate credit and the implications for referrals in the future on what was said here.

    - The comment “behave along the lines of Malcolm Gladwell’s work, ‘Six Degrees of Separation.’” seems to imply ownership of a concept, and, despite the fact that I am an avid fan of Gladwell’s work, Malcolm wasn’t yet born in 1967, when Stanley Milgram conducted his seminal “6-degrees” “small world” experiment ( http://en.wikipedia.org/wiki/Stanley_Milgram ) which was significant enough that a decade later it was in all the college psyche books. 

    And yet the more lasting work (and more pertinent to the discussion you raise here) of contrasting Strong versus Weak Ties and the potential issues surrounding them for referrals was done by Mark Granovetter from Stanford as early as the 70′s and into the 90′s. I think his data suggests several counter-intuitive  points regarding referrals notably that the stronger ‘family’ ties (at least in our western culture) are not as likely to drive company performance than weaker 2nd and 3rd order relationships because (at least in part) the perceived conflict of interest of the strong ties is mitigated…so not as critical in keeping these weaker relationships separated in a corporate environment. 

    A second notion that referrals will lead to hiring too many folks that ‘act and look like ourselves’ contributing to inbreeding has not been borne out by the few studies (by practitioners) that I’ve seen…with referral rates in excess of 50%.

    I think firms do need to guard against the downside you’ve discussed and measure some diversity of thought (at least in comparison to other sources) but referrals can scale to increase diversity even in the most traditional hidebound firms…if there is a clear message and incentive to do so.I’m of the opinion that the growing use of social media will NOT increase referrals generated by employers but seriously increase referrals initiated by job seekers.

    I’m convinced (without data) that employee referrals already impacts more than 2/3 of all hires but goes unreported and unattributed. By building a better working definition the term ‘referral’ (a dimension that on one end is a recommendation of someone who has observed the person in a similar work setting to a person accosted in the parking lot and paid to refer) would produce a helpful way to determine when referrals are most valuable.

    - Finally, The Kevin Bacon Game you refer to was originally developed by a group of grad students at the University of Virginia in the late 90′s. Brett Tjaden’s idea around 1997 was built out as http://www.oracleofbacon.com in 1999 by Patrick Reynolds…and is still usable

  • http://www.hrexaminer.com John Sumser

    Thanks for the detailed reply, Gerry.

    Any Stanley Milgram fan is a friend of mine.

    I would love to see the studies you refer to (and their measures of diversity in referral programs). I find it far fetched that people know other people beyond their ‘tribe’ and social class well enough to make referrals. I would like nothing more than to be wrong about my conclusion but it seems like the very nature of social class.

    A weak tie is someone my father knows who I don’t know well enough to consider a first order connection. The referral made in that case is about my father’s reputation, not mine. Later in your note, you emphasize the importance of having observed the person at work. It can’t be both.

    There is increasing emphasis on weak ties as the real source of networking success. Again, I have the hardest time imagining it in practice. Weak ties mean, precisely, I don’t know this person very well. So a recommendation for someone with whom I have a weak tie is “I’d like to recommend this person I don’t know very well.” Something doesn’t ring true about that formulation.

    You and I might have a very interesting longer debate.

    Thanks, again.

  • Ward Christman

    If referrals are encouraged by leadership in the right way, the real benefits are the benefits after the hire -> happier more engaged employees = longer retention of new employee and the referrer, faster productivity of new hire, etc.

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