Best Practices in HR

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Melissa Dobbins
  November 15, 2018

Does Your Referral Program Risk Compliance?

Let me start with a personal experience:


I was really passionate about a specific companies mission and really wanted to work for them.


I had applied several times to this very well-known, highly selective company on the West coast through their Applicant Tracking System (ATS).


I never received anything but the default “thank you for applying” response.


A short time later, I became acquainted with an employee of this company. He was impressed with my passion for the company’s culture and understanding of its core mission – so he asked for my resume and submitted me as a referral.


Less than a week later I was set up on 3 different video interviews for 3 different roles in the company. A short time later I was flown across the country for an in-person interview.


And yet, every single time I applied using the method most people utilize, through the ATS, I got nowhere.


Was I qualified for the position? Yes, based on the fact that I got through numerous video interviews and got flown out for in-person interviews.


Was I given the same fair shot as everyone else? Not at all.


This is a very common occurrence. So much so that many candidates have switched to focusing on networking and making connections in order to obtain the coveted employee referral – and don’t even bother with applying through an ATS.


Qualified candidates are being filtered out


Many well-suited candidates are being overlooked due to minor issues or incompatibilities in their resume’s that an ATS algorithm can’t handle or can’t interpret as to the relevance of that position. And that is important – as the capability to “read between the lines” is just as important as what is written there (especially with the bogus advice du jour being that a resume can’t be longer than a one or two pages).


And thus the candidate doesn’t advance to the next step – the deeper review by the Recruiter or Hiring manager.


What about referrals?


Beyond the limitations of the algorithms utilized by the majority of the most popular ATS’s – many companies also promote another way to apply for a position within a company: the Employee Referral.


Statistically, most employee referrals do end up staying longer within an organization. Which is why they are typically given the “white-glove” treatment. Often, the referral does not have to go through the same steps as a typical “web-based” candidate. This ultimately means these incredibly expensive Applicant Tracking Systems are failing when the majority of candidates that get to the in-person interview are employee referrals.


Why Employee Referral’s tend to be successful:


Most people only refer people who may have the ability to do the job. With companies providing some kind of financial incentive, it’s hard not to try and refer someone.

Due to their familiarity with a person, a current employee can often see a cross-profession fit of skills that a resume just can’t give insight on.

Unfortunately, referrals usually come with lots of compliance and bias issues


While there are clear incentives to the Employee Referral approach, danger can also lurk here.


One compliance issue that often crops up with employee referrals is a lack of diversity among the candidates. This can quickly mushroom into the “lack of diversity” issues that we are currently seeing so many companies struggling with.


Another is how there is a lack of consistency between all candidates who apply for the position. The referral process in many company’s “skips” steps in the job application process, which immediately causes another compliance issue.


And lets not forget the elephant in the room – the money and effort that was put into setting up the ATS itself which is essentially negated when ATS-only candidates are overlooked in favor of employee referrals. Just to put it in perspective, ATS’s can range from $3,000 – $140,000 per year – depending on the size and need of the company.


So, where do we go from here?


The easy answer is to use a solution – like career.place – that puts all candidates through the same process. Regardless of where they came from – a passive candidate through an ATS or an employee referral.


This accomplishes the following:


Removes compliance issues since all candidates have to go through the exact same (consistent) process promotes diversity into the process (and company) since every candidate is anonymous
Candidates, either through a web-based or referral-based application, will all focus on proving their ability and aptitude – regardless of how they got there or what is on their resume


Career.Place does all this for you, quickly and easily. Try our solution at www.career.place or reach out and get free access to candidates who match the actual needs of the position.