Employee Referrals and the Power of Social Networks

I had a great conversation with a hiring manager of a large Miami hotel earlier this week. One idea that we discussed was his company's success with an employee referral program for front-line workers -- current employees are compensated for referring a friend or acquaintance who they know would be a good fit.

This is the power of the 'vouch'. Why does this work? What does this mean for social networking and leveraging the social capital of front-line employees?

Employee-referred candidates are likely to have realistic expectations for what the job entails. They also may feel more incentive to 'stick with it' as they have a role model who has done it before them and who will be disappointed if they do not.

Employee-referred candidates have a built-in 'support system' in the employee who referred them. The questions and uncertainties endemic to a new position and new team can be addressed to their friend -- rather than managers or HR. This is particularly crucial when communication with direct managers is a challenge, as it often seems to be.

Front-line employees have social capital and knowledge that can be hugely valuable to HR and management. They often know more about the requirements of their positions and the types of personality that would excel than does management or HR. They may know how to communicate better with their co-workers to get the job done than does their manager. Finally, they're more likely to have the social networks that can attract good employees than do their managers or HR. The results -- reduced turnover, happier workforce, enhanced employee commitment, improved intra-team communication -- equal increased value for everyone. Let's tap it.