Using an employee referral program in their hiring strategy helps companies/recruiters find new talent with assistance from the existing workforce. By offering rewards, incentives, or monetary benefits, the company encourages its employees to refer a qualified candidate for the business.
This strategy is prevalent in most companies today for its efficiency and ease of hiring. Further, this process helps reduce the hiring time and provides a much better conversion rate. Research shows that referrals can boost the odds of job matching between 2 and 6 percent.
Referral programs also help reduce the cost of hiring and enhance employee engagement within the establishment.
Setting Up a Referral System
For businesses who are still in the initial stages of setting up a referral system, here is a framework for reference:
a. Request resumes and entries
Start by using an email broadcast, a team meeting, or a bulletin board to announce your referral-based hiring plans. Explain the system in place and encourage your team to recommend only those suitable for the role.
b. Make your incentive clear
Ensure you present clear incentives. Being vague will discourage people from putting in the effort. Disclose the bonus, either monetary or non-monetary, right from the start.
Incentive programs can include PTO days or cash bonuses to employee-wide recognition.
c. Have a single point of contact for updates
Maintain open and transparent communication channels and appoint a single point of contact for this process. This approach will provide candidates with directions and eliminate any doubts or redundancies.
4 Ways to Fuel Your Referral Program
Here are four ways to fuel your referral program:
1. Tap into Your Employees’ Network
The basis of a referral program is to make the most of your existing network. Ensure you reach the right people for this task. People from specific teams or departments might provide better references than others.
Advertise to the right audience. Ensure you post a detailed and easily shared job description. Make these JDs available as a downloadable PDF if that helps speed things up. Don’t hesitate to reach out to individual employees or groups who remain well-connected.
2. Create a Suitable Referral Campaign
Merely sending out an email will do no good. This approach makes your program forgettable; keep things interesting for the employees. Additionally, the referral campaign should play to the strengths of your workforce. If you are running the program for a blue-collar group, don’t depend heavily on technology.
One of the best examples of exciting and domain-specific campaigns is Go-Daddy. They advertised their referral program in code, and those who could crack those lines of code could find the details of this program.
Gamification, marketing, and promoting recall value is imperative to a successful campaign.
3. Pick the Perfect Bonus/Benefits
A monetary reward seems like the ideal option at most times but thinks again. While it looks encouraging, it also lacks excitement. In a survey, it was found that 15% of all companies offer an alternative to monetary benefits.
Other benefits such as vouchers, holidays, extra days off, etc., are suitable rewards for employees. These will hardly dent the company budget but seem exciting to the workforce.
The perfect example of a company that got creative in this regard is InMobi. They offered a brand new bike in return for the best referrals. They also parked the bike in the middle of the corporate office to showcase what was up for grabs.
Lastly, if you offer monetary incentives, ensure motivation and work to that benefit. For instance, giving better pay-offs for a hard-to-fill role or added benefits if the employee stays on for a year.
4. Keep Employees in the Loop
Providing information and tapping into your employees’ network is the first part of this strategy. It’s all about keeping them updated across the campaign after that. When employees send in their entries to the program, they also expect feedback for their efforts.
Radio silence from the recruiter or HR department can create apprehensions about the program. This lack of communication could discourage more entries and derail your strategy altogether. Further, it ignites employees’ reluctance the next time you start a program.
Keep them updated at every stage of the process, both at a community and personal level. Maintaining constant dialogue fuels and encourages more change.
The strength of a campaign rests on it staying top-of-the-mind. An unpopular referral program is as effective as not having one in the first palace.
Note that you should get the whole hiring team on board for this to work. Any disagreements or varied opinions on the strategy could also restrict its potential. Some companies also use marketing or recruitment agencies to ensure the best reach and results for such endeavors.