George Smallwood, who has spent nearly two decades in Human Resources, is currently the Director of Talent Acquisition at Ingram Content Group and loves to develop high-performing teams, build team morale, and reduce costs.
Through the Lens of Integrity and Inclusivity
Sourcing talent and serving as the role model of company culture, Smallwood is a principled leader with integrity and a focus on genuine connection. His expertise is built upon his talents for creating a strong company culture and high morale. He finds his success with his ability to share knowledge and ensure all those who work with him are included in the decision-making process and are provided with what they need to grow and succeed. He explains the importance of having an Employee Referral Program and how it can be used to increase employee engagement and savings.
1. Do you think there is an ideal % of hires a company should aim to generate through referrals?
Prior to RolePoint, we were at 21% and that was our 12-month rolling average. At that point, I set a realistic goal of 30% for the first year. Last year was the end of our first year, we ended up at 35%. Right now we’re tracking at 40% for a 12-month rolling average for purely referrals. For me, 40% is above and beyond. Now that we’re in that range, we could not be happier. We’re seeing not enough on the tail end since it is so fresh to know if it’s going to help on our retention, but we are hopeful and going with the historical thought that referrals are going to make better and longer-standing hires.
2. What are the main challenges you’ve seen companies face when looking to increase their % of hires through referrals?
For us, it really was the ease, or lack of ease, of the process. Early on, prior to RolePoint, we had worked through our ATS and it was cumbersome and confusing. Ultimately, it resulted in people either going around the referral policy, submitting referrals anyway they could, or just not doing it at all.
3. How are referred candidates perceived by hiring managers at companies you’ve worked at?
Referrals are considered a warm lead and the hiring managers seem to gravitate to that as it’s almost a known entity. Therefore, while we still follow the same interview process, there is a certain amount of excitement that is generated for the referrals that are coming from another star performer on that hiring manager’s team. Having that anticipation of knowing that a top person has suggested, certainly puts them in a different frame of mind. I’ve seen the result of that turn out to be resulting in a faster process, even though it’s the same process, there is more excitement in getting them on the calendar, more excitement to encourage the other parties that are involved in the interview process to make sure their calendars are free. It’s been helpful, especially in our world on that software side, we are always looking for engineers and as you know time is of the essence, so finding these difficult software developers sometimes I’ll say our normal process will slip away, but with referrals we can usually see that process come and go within a couple of days time and a hire is often the result. Referrals seem to be more educated and what we’ve noticed is usually they come in with that expectation that they know someone, but it seems as though they have always done their homework, whereas non-referrals may come in and still not really know much about the company or really have done the sound due diligence to present well. We certainly see more of a trend with those who have been referred come in knowing their stuff.
4. What level of employee referral cash bonuses have you rewarded in the past?
We’ve played around with several bonuses and we haven’t actually noticed a large difference in that. Prior to RolePoint, we were maybe paying a little too much, we were paying about $3,000 for exempt and $1,500 for non-exempt or hourly type of referrals. We switched to RolePoint and at that time with the new system, we thought we’d go ahead and drop it down just a little bit to see if it was effected. We changed it to $2,000 for exempt and $1,000 for non-exempt, and it didn’t have an impact on engagement. The monetary value at least for us has not been the primary goal. There really is a true earnest and interest with the associates wanting to bring on qualified talent.
6. What referral probation periods have you seen associated with cash rewards?
We have a 90 day probation period. We used to have 6 month period that was paid out, half over 90 days and the other half at the end of 6 months. We felt it was a little too long, at the same time, we still wanted to sure it was a quality referral and we have updated it to 90 days.
7. How have referred candidates compared on a cost-per-hire basis to other candidate sources?
We track annual cost savings and for example, right now we are at $250,000 in savings purely based off of our referral program. If we hired someone and the agency cost was $24,000, but we just paid $2,000 for that referral, then we just saved $22,000. It’s something our CHRO felt was important to show the value that is generated not just from referrals but also having that in-house specialist group of talent acquisition versus always going to agencies.
8. What’s the #1 employee referral program tip you would like to pass on?
Make it easy! Make it an easy process and create that awareness. Again, that was our struggle at the beginning and ever since we opened the gates to looking at it differently and being able to incorporate social, making it a very simple and transparent process, along with the statuses that are visible to those that are referred or if an employee’s referral is in the process. The entire process of making it as clean, simple, and transparent as possible has been so successful to us and I think that is truly why along with the partnership with RolePoint that we’ve been able to go from that 21% to 40% referrals.
For achieving the best results and incorporating strong values, as Smallwood has done at Ingram, here are my three takeaways.
Takeaway #1: Doubling the company’s referral rate is possible with an easy, straightforward, and transparent process. Eliminate cumbersome and confusing ATS processes that lack efficiency and result in plummeting referral rates.
Takeaway #2: Referral bonuses at $2,000 work well for driving engagement combined with a shorter probation period at most a 90 days period. Employees have an earnest desire to help their friends and will be reinforced with an award that is more immediate.
Takeaway #3: An in-house talent acquisition team working with a strong referral program effectively and prominently reduces costs and displays the value of referrals over the high cost of using agencies.
What information did you learn or find helpful? Does your current company hold the same value for referrals?
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