Employee referral programs have been called the “Holy Grail of Hiring” by Forbes because of their effectiveness. Employee referral programs help businesses find qualified candidates and can also reduce the average cost-per-hire.
Employee Referral Programs expand the applicant talent pool and may improve the quality of candidates since referrals come from trusted sources aware of how your company operates.
Here’s how to get started:
Establish Goals for the Program
Be ambitious but realistic. A good goal might be to receive a certain number of employee referrals by a certain date. Setting and achieving this goal will help you quantify your success.
Engage Your Management Team
Essential to any employee referral program are your existing employees. Make sure that employees and managers are all onboard and actively involved in your program.
Be Clear About Job Requirements
Make sure your employees are fully aware of job descriptions and understand the nuances of what you seek.
Offer Employee Incentives
Keeping your employees motivated to participate in the program is key to maintaining a healthy referral rate. To do this, set up employee referral program rewards. If your employees refer talented candidates, incentives should include cash bonuses, gift vouchers, or perhaps even extra time off.
Make the Referral Process Easy
Consider a website form, a dedicated email address for referrals, or even an internal portal on your website for employees to recommend candidates.
Track Your Results
Over time, you will be able to make alterations and updates to your referral process as you learn more about what does and doesn’t work. Tracking results will provide the metrics needed.
Here are some additional tips to help you set up an effective employee referral program.
- The program as written must be easy to understand, with no ambiguities. Ask several people to review the program rules before rolling it out.
- Create a feedback loop for employees. Employees making a referral are entitled to prompt feedback, so they know that fair and timely consideration was given.
- Prioritize positions that are difficult to fill. Some positions are more important or more difficult to fill. Emphasize those positions as you market the program. Consider extra payouts accordingly.
- Don’t just send an email. Meet with your employees to explain and exchange ideas. Provide a resource for people who may have follow-up questions or concerns.
- Retention payouts: Referrals are good, but quality referrals are better. Consider a payout structure that adds money to the pot at certain intervals. For example, rather than one payout on the start date, you can divide that sum or add funds at six months or one year after hire date.
- Encourage referrals even if they don’t result in hires. Consider ways to keep the referrals coming by offering a small payout for referrals. Or, perhaps, every referral is worth a raffle ticket for a meaningful prize.
- Recognize top performers. Just as with job performance, take the time to thank and recognize those who have gone above and beyond to build a robust candidate pipeline.
Are you having difficulty finding talented employees to fill your open positions? Reach out to us for help, guidance, and support by sending a quick note to info@execsallied.com. With 25 years of experience and an A+ rating from the BBB, you will quickly see why we’ve built so many long-term client relationships—many lasting decades.