How General Motors Is Increasing Employee Referrals Without Incentives

04/06/2022 5 min read
Cyril George
Cyril George is the Global Talent Acquisition Director for General Motors. His team develops strategies to attract and hire the technical talent that power GM’s transition to an all-electric future. Since joining GM in 2006, he has held various HR roles supporting engineering and manufacturing in India, as well as sales, service, and marketing in Central and Eastern Europe.
How General Motors Is Increasing Employee Referrals Without Incentives

Hiring managers and HR professionals know that employees who join an organization through a referral program are both a strong culture fit and more likely to remain with the company.

To find these employees, many companies offer cash bonuses to those who refer candidates that ultimately get hired. At General Motors, where I am the director of global talent acquisition, we have done this in different parts of the world with some success. In Israel, for example, we provide a cash incentive for referrals, and approximately 15% of our candidates come from that referral program.

Cash incentives don’t necessarily guarantee higher referral rates, however. Recently, several companies, including Google, discovered that money didn’t motivate their employees to refer friends and colleagues.

The days of “cash bonus equals referrals” are not necessarily over, but I don’t see it as a binary equation.

In 2020, 9% of our US candidates came from employee referrals. In 2021, we grew that number to 16%—and we achieved that without offering any cash incentives.

At a time when finding talent is a significant challenge for many companies, we discovered a way to tap into our greatest asset—our employees—and learned how an employee-centered approach can help in the competitive talent market.

Here’s how we are doing it.

Focus on the Employee Value Proposition

At GM, we spend a lot of time defining our employer brand. Our mission and culture help to attract and retain employees.

Mission

Joining an organization that is significantly transforming itself and an entire industry is key to GM’s employee value proposition. Looking at the timing of our announcement of a fully electric future, and then at our employee engagement numbers, there is a definite correlated spike.

Not only are our employees engaged, but our new hires also report feeling a sense of purpose working here. For example, we recently hired Shaluinn Fullove as Chief People Officer for BrightDrop, a new business from GM whose purpose is to redesign the commercial delivery and logistics industry for an all-electric future. One of the company’s first initiatives is to partner with FedEx to create a fleet of electric vehicles. Shaluinn told me whenever she sees a FedEx truck, she gets excited. She tells her daughter, “That truck, which now has an internal combustion engine, is going to become an electric vehicle. BrightDrop is the reason that is going to happen.”

Without a lot of marketing around our referral program, our new hires recommend GM as a place of employment to their friends simply because they are passionate about what we do.

Culture

Another factor driving engagement is how our leadership managed the return to the office as the pandemic subsided. In April 2021, GM’s CEO Mary Barra and other leaders introduced “work appropriately,” which gives employees the flexibility to work wherever and however they see fit. Rather than mandating that all employees return to the office or conform to a hybrid schedule, “work appropriately” allows employees to establish their own schedules and work locations—and the company provides all the necessary tools and resources to accommodate them. Our employees felt that the leadership team showed empathy throughout the pandemic, especially in terms of flexibility, which had a positive effect on engagement.

Of course, the employee value proposition looks a little different for each person. For example, somebody going into their first job is joining the organization not just for a role but for a career. Someone coming from a traditional automotive company will now be part of a transformational organization. Someone coming from a tech company will get to work on a product and see their product come to life. We are able to provide opportunities for a diverse range of experiences.

The title of this graphic is How Work Culture Impacts Business Outcomes. There are two pie charts in the middle of the image. The pie chart on the left denotes that at organizations with highly rated cultures, 31% of employees are more likely to recommend their workplace to others. The pie chart on the right denotes that at organizations with highly rated cultures, 25% of employees are more likely to rate being happy working for their organization. The source of this information is Glint.

“Hum, Sing, or Shout” to Get the Word Out

Being vocal about hiring contributed to the uptick in our referrals. At different points we’ve had to, as LinkedIn calls it, “hum, sing, or shout” to let people know we are hiring. We partnered with internal architects on our communications team to get the message to our employees that we are also hiring a lot in 2022. Our social media accounts and platforms like LinkedIn send notifications to our current employees about open positions, and we also ask employees to regularly visit our career site.

As a recruiter, I used to be limited by geographical constraints. Thanks to remote work, the talent pool has opened up significantly. We can go into spaces where we wouldn’t have otherwise gone to recruit and find talent from more diverse sources—from startups to the top IT companies.

The title of this image is The Ex(perience) Factor: Companies can create a positive or a negative employee experience, which in turn affects business performance.   The image is a 3-by-3 matrix. The title of the first column is Social Experience. The first box in this column reads: 1. People and relationships. Am I seen and treated by my leaders as a significant contributor to the organization? The second box in the column reads: 2. Teamwork. Do the people I work with every day trust and care for one another to create a collaborative and innovative environment? The third box in this column reads: 3. Social climate. Am I welcome in this community and do I feel like I belong?  The title of the second column is Work Experience. The first box in this column reads: 4. Work organization. Do I have clear responsibilities, interesting work, and the resources I need to be successful in my role? The second box in this column reads: 5. Work control and flexibility. Do I complete my work efficiently, with flexibility and positive integration in my life? The third box in this column reads: 6. Growth and rewards. Am I given incentives and opportunities that help me learn, grow, and provide for my family?  The title of the third column is Organization Experience. The first box in this column reads: 7. Purpose. Does my company have a purpose that aligns with mine, as well as processes to which I can contribute? The second box reads: 8. Technology. Does my company’s technology enable me to work efficiently and without friction? The third box in this column reads: 9. Physical environment. Are my surroundings safe, comfortable, and human-centered?  The source of the information in this graphic is McKinsey & Co.

Flip the Recruitment and Referral Processes

We’re making a big investment in technology by updating our recruitment tech stack. The future is candidate relationship management-based recruitment, where we’ll proactively recruit the people we want, even before we have a position open.

Data and technology can help us identify our talent needs for the future, but ideally we will merge our candidate relationship management process with our referral process in order to create a talent community that we can invest in. For example, we can stay in touch with someone who is perhaps not looking to make a move right now but who may be in the future.

For employee referrals, this eliminates the gap between “I know of a person, but I have to constantly watch for a position to open up for them” versus “These are 10 people I know. They do work similar to ours, and now we just need to match them to a position.” We have the technology to tell us exactly the roles for which those 10 people are a fit and then we can start contacting them.

Involve Employees in the Success of the Candidates

We used to talk about customer experience; now we focus on candidate experience. The job application process can be life-changing for many people, so the most important element of recruiting talent is to establish trust. Remember, the candidate is speaking to a set of strangers and absorbing a lot of information about an organization all at once.

While the recruiter’s role is very important in the hiring process, the referrer’s role is also key. If I have a friend who I trust in the organization, I can ask, "What’s it really like to work there? What is the culture like?" This makes a huge difference in the candidate’s decision-making process.

Gallup's Q12 survey includes 12 statements designed to determine how engaged someone is in their job. One of the statements is “I have a best friend at work.” If I have referred three or four of my friends into the organization, I am now committed to their success. I've asked them to come to GM, and I need to show that I walk the talk.

That personal connection and accountability are worth more than any incentive.

Cyril George
Cyril George is the Global Talent Acquisition Director for General Motors. His team develops strategies to attract and hire the technical talent that power GM’s transition to an all-electric future. Since joining GM in 2006, he has held various HR roles supporting engineering and manufacturing in India, as well as sales, service, and marketing in Central and Eastern Europe.