Why You Should Give Referrals

I had an interesting question the other day from a candidate: "Why would anyone give you a referral when you get paid a huge fee and they get nothing?" I thought this was a great question. I actually addressed this in the Annual IT Architectural Summit I spoke at last week, so I thought I'd share my answer here.

Many would be surprised to hear that a lot of people give out referrals. And by far, most referrals I get are from senior candidates. That's right - senior candidates are easily the most open about not only giving referrals of people they know, but also giving what I call "blind referrals". This is when they hand out names of people who they think are reasonably good or worth talking to but aren't necessarily their personal contacts.

For senior candidates I think they see their ability to give referrals as almost an example of their strength and knowledge in their industry. It also shows that in their experience, they realize the importance and value of giving referrals as well as the long-term gains.

But to get down to the reasons why executives should give referrals: It's all about goodwill, reciprocity, and networking.

Goodwill. There's nothing really to explain here. When you help someone, it's a good thing. Becoming a referee for that person, referring that person to a recruiter for an opportunity - in the end, it's all for the benefit of that person - whether or not a new job actually materializes. The person you helped is better off by having had at least a chance to consider an opportunity. Opportunity is always a good thing.

Reciprocity. The Law of Reciprocation is powerful. I got this from Dr. Robert Cialdini, a widely recognized expert in negotiation studies, who said the power of reciprocation is extremely strong and should be used when presented with a moment of power; that is, when you have just done or given something beneficial to someone. When they thank you, it's up to you to seize that moment of power and respond:

"I'm sure you would do the same for me if I needed it."

That's the law of reciprocation. As it turns out from Dr. Cialdini's research, people will reciprocate when receiving a gift, advice, or help from someone, no matter how much time has passed from the initial giving. In what ways? Well, if you helped a colleague or former manager by referring them to a recruiter, or offering to be a referee for a potential employer, they may return the favour by looking out for your best interests as well.

Networking. This widens and the ties strengthen from you giving referrals.

The key is to give to them first. And the easiest way is refer them to a key person, or give them a referral if they need one for a new opportunity.

Hopefully, this answers the question. While it's hard to think past the short-term outcomes, like a referral fee, look to the long-term gains of having a quality relationship with someone in your network who can reciprocate goodwill to you when the time comes. It's an investment.

Giving referrals doesn't happen as much here in New Zealand as it does in larger markets, like the US or Japan. But it's something that I think should happen more often.

 

Comments

[Suzanne Kendrick]

Hi Stephen,

I don't disagree with you but what about if somebody wants to pay for the referral? What say you are being asked for referrals all the time by recruiters. Would you try harder to think of people if you were going to be paid plenty? What say the hirer wanted to pay you 6% of the starting salary of the person you found. Would that motivate you to look more? If you think so, have a look at www.zubka.com for a different spin on referrals.