Role of Referrers in Hiring

[We’re pleased to welcome authors Jenna R. Pieper of the University of Nebraska-Lincoln, Charlie O. Trevor of the University of Wisconsin-Madison, Ingo Weller of LMU Munich, and Dennis Duchon of University of Nebraska-Lincoln . They recently published an article in the Journal of Management entitled “Referral Hire Presence Implications for Referrer Turnover and Job Performance,” which is currently free to read for a limited time. Below, Dr. Pieper discusses the events and circumstance that inspired this research:]

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This paper was motivated by a general curiosity about the critical role of referrers in referral hiring in organizational settings, and originated in a section of my doctoral dissertation. Referral hiring, or the practice of using recommendations of a current employee (referrer) to identify and hire a new employee (referral hire), often accounts for 30% to 50% of an organization’s filling of its job openings. To date, the attention of research and practice has focused primarily on the referral hires and their outcomes, leaving a glaring gap in our understanding of how referrers are impacted by the hiring of a friend or acquaintance. We were therefore interested in gaining insight into how the presence of a referral hire influences referrer performance and voluntary turnover.

Our findings, which are arguably the first to specifically examine how referral hiring impacts referrers, show that referrers are indeed impacted by the presence of their referral hire through a socially enriched workplace. In our study, employees with a referral hire present were 27% less likely to leave than employees without a referral hire present, and their performance improved by 5.1% when a referral hire was present. However, we found that job similarity (indicating heightened workplace exposure) between referrers and their referral hires, when compared to job dissimilarity, was associated with lower referrer job performance. Thus, it seems the costs, such as socialization and informal training, for referrers in similar jobs to their referral hires may offset the performance gains gleamed from the referral hire presence. Most important to our work is that we provide the only empirical evidence to date that referring enhances the social enrichment construct at the heart of referral hire discourse.

I think that future research on this topic should continue to consider the critical role of the referrer in referral hiring. My main advice for scholars would be to consider the interface between the various stakeholders in referral hiring, different referring pathways, the intricacies in how referring hiring unfolds over time, and the contingencies that affect its outcomes. A lot of fascinating contributions can still be made regarding referral hiring.

Finally, our work is important to practitioners. It demonstrates that the presence aspect is crucial. When coupled with the well-established benefits for the referral hire, referral hiring appears to be a value proposition for the firm because performance and retention gains emerge for both referrers and referral hires. Thus, our work would encourage continued practice of referral hiring. Practitioners can also take from our study that it is important to be aware of and work to prevent potential downsides associated with referral hiring.

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