Five Tips to a Killer Employee Referral Program

It’s one of the best sources of great talent, but surprisingly few companies make the most of their own employees’ contacts when it comes to hires. Here are some tips to make sure your referral program hits the mark.

“I’d like you to meet my best friend…” No, it’s not a chat-up line at the local bar. It’s a current employee introducing you to…well, their best friend – but also, perhaps, a valuable new hire.

Employee referrals can be one of the top sources of quality candidates, resulting in faster hires. More important, these hires are often successful hires. After all, this same person has a link with your company. It’s likely they’ve had the ‘low-down’ from their friend about what it’s like to work there.

But is it really possible to turn your entire organisation into a pack of talent scouts? Yes, with a few key considerations.

Essential steps

First, be clear on why you’re setting up the program. What’s the end goal, the hoped-for objective? It might not simply be ‘to source as many candidates as possible, as cheaply as possible’. Remember, it’s about quality more than quantity. Is the goal to improve diversity via referrals – hence you might turn to a select group of employees to refer more? Or perhaps it’s to increase referrals in specific areas of the company, such as sales? Be clear on your end goal and the next steps become easier.

Next, involve your employees. They might need to be trained on the practicalities of any technical program you have in place. You also need to tell them what the company is looking for in referred candidates. Lastly, you need to outline to employees the ‘what’s in it for me’ factor: what can they expect in return for referring someone? Employees should know what to expect with regards to candidate communication, follow-up and next steps.

Here are 5 further tips to ensure your referral program flies:

Make it easy

No employee is going to waste their time on a complicated referral process. Set clear expectations at the outset so all parties know exactly what to expect and when – then stick to it. For internal referrals, it might be possible to use your ATS. There are systems out there where all an employee has to do is give the name and contact information of a referred candidate, and that information is automatically populated into the ATS. Otherwise, the employee can simply send your talent recruitment team the name and contact, and they can enter it into the ATS. If it’s an external referral (ie referring someone outside the company), make the process as smooth as possible – for both the referee and the referrer.

Don’t put it out there only to shut the door

So, John in accounts has put forward his friend Maxine who currently works in another company. Maxine follows John’s advice and submits her CV, mentioning in her cover letter her connection to John. John also lets HR know that they should expect Maxine’s CV. Maxine waits for a response – even just an acknowledgement that her CV has been received. And she waits. And waits. If you want to lose your credibility and damage your employer brand in one fell swoop, that’s the way to do it. Employee referrals shouldn’t disappear into the black hole of HR or your ATS. Slow responses also suggest your organisation isn’t serious about attracting or hiring the best talent. Also remember that even though you might not be in hiring mode right now, it can’t hurt to keep a database of CVs on file, regardless of whether you have a vacancy. This also keeps employees on the constant lookout for talent.

Offer a suitable reward

It’s not always about cash incentives, but, let’s face it, it’s a big reason why an existing employee will make the effort to refer someone to your company. It’s wise to wait ‘till after the referred person clears their probation period – but don’t wait too much longer. Paying a bonus more than months down the track starts to look like an afterthought. Make it clear upfront exactly how much will be paid for a successful hire, and when payment will be made. Also consider ‘referral rewards’ by setting goals and publically acknowledging top referrers. If budgets are tight, don’t forget the power of a simple ‘thank-you’. An employee who refers a candidate and gets some positive recognition is likely to refer again, and it will inspire others to do the same.

Launch with a bang – and sustain it

We’ve seen it all before – a referral program launches with a lot of razzle-dazzle, only to fizzle out some months later. Whenever you’re asking someone to do something (in this case go out on a limb and refer a friend or colleague to their organisation), it’s important to stay on their radar. You don’t do that by simply having referral program details on the intranet or sending out the occasional ‘do you know anyone?’ email. Constant prompters are needed. Partner with your marketing team or put your employer branding hat on. Consider running 2-3 campaigns throughout the year. Use multiple communication channels. Use video testimonials of successful referral hires. Make stars out of those employees  (or teams of employees) who refer the most people. Make it fun! And don’t forget – make the referral program a key part of any onboarding process. Strike while the iron is hot and encourage brand new hires to put forward names of their contacts.

Provide feedback

Employees won’t improve without some guidance. Did their referral not make the grade? Why? Provide feedback on the strengths and weaknesses of referrals. Help your employees to help you by pre-qualifying your requirements for a better candidate match.

Studies show that referrals, if hired, tend to stay with a company longer than traditional hires and a great referral program improves a business’s overall retention rate. If you haven’t already, it’s time to put your employees to work!