Why LinkedIn Failed to Launch a Successful Employee Referral Product

Introduction

LinkedIn, the world's largest professional network, aimed to leverage its vast network and resources to create an employee referral program. However, despite initial attempts, the company discontinued such efforts. This article explores the reasons behind LinkedIn's decision to abandon the employee referral product and discusses the challenges it faced.

Initial Attempts and Challenges

Several years ago, LinkedIn attempted to develop an employee referral product. However, the project did not gain the traction expected. The primary reason for the failure was the inability to integrate the referral program seamlessly with company-specific applicant tracking systems (ATS).

One of the key requirements for any successful employee referral program is to ensure that the referral process is both easy and valuable for both the employee and the organization. The initial implementation faced significant challenges in streamlining the process and ensuring that payouts could be accurately processed through the various ATS systems companies use.

The Internality of Referral Submissions

A significant issue was the sheer volume of unacknowledged referrals. My clients, who were LinkedIn users, often dealt with countless referrals that were not only left unprocessed but also ignored. This created a low return on investment for both the employees and the recruiters. The referral submissions were so numerous that the recruiters often found it more efficient to stop processing them altogether.

High Quantity, Low Quality

The problem was exacerbated by the ease with which employees could make referrals. The process was designed to be inclusive, inviting everyone to participate. However, this inclusivity led to a decrease in the overall quality of referrals. Referrals that were not properly vetted reduced the effectiveness of the program, as they did not necessarily contribute to hiring the best candidates.

LinkedIn's Approach to Discontinuation

LinkedIn, known for its swift action in removing features that do not meet user needs, quickly recognized the issues with the employee referral program. The company has a track record of discontinuing features that do not provide substantial value to its users. The decision to discontinue the program was ultimately driven by the recognition that it was creating more friction in the process than it was solving.

Lessons Learned

The failure of the employee referral program underscores the importance of robust integration and seamless user experience in any B2B product. Companies like LinkedIn need to ensure that their tools and services integrate seamlessly with existing processes and systems. The initial attempt, while promising, failed to address these critical factors.

LinkedIn's willingness to discontinue a feature that did not meet user expectations highlights its commitment to delivering a high-quality user experience. For businesses considering employee referral programs, the challenges identified with LinkedIn's experience serve as a valuable lesson.

Conclusion

While LinkedIn's initial venture into employee referrals was promising, it ultimately faced significant hurdles due to integration issues with various ATS systems. The program's inability to generate meaningful returns and its failure to streamline the referral process led to its discontinuation. As employee referral programs continue to evolve and gain popularity, businesses should heed the lessons learned from LinkedIn's experience to ensure the success of their own programs.