Fine Tune Your Employee Referral Program
Posted on March 15, 2018
When your employees feel involved, valued, and inspired, you have an engaged workforce that, given the right tools, can become evangelists for your company. Granted, not everyone will reach this pinnacle of engagement - not all employees were meant to be evangelists. But, if you've laid the groundwork and provided tools to make referrals easy, employees who want to promote your company's mission, purpose, and values to potential hires are more willing to do so.
According to LinkedIn Talent Solutions' 2017 Global Recruiting Trends, nearly half (48%) of businesses say their high-quality hires come from referrals from your employee promoters. This is an abundant pipeline that will provide vetted, top talent to your company. So, it's essential to your bottom line to develop a solid plan of action to help identify, amplify, and track the results your employee evangelists have on your recruiting and hiring efforts, as well as your company's overall engagement score.
Here are a few questions to ask yourself to see if your referral program is driving the hires that you need.
Do our employees even know we have a referral program?
If not, you need to broadcast this program far and wide: articles on the intranet, an email campaign, posters in the break rooms. If you want the high-quality applicants your current employees will bring to the table, you need to let them know it's out there. Or consider posting a leaderboard so that your team can see who has referred the most candidates (a little healthy competition never hurts).
Do I have to offer a reward for a referral?
ABSOLUTELY! Just because your employees love your company doesn't mean they don't have a reasonable expectation that they'll receive an incentive for bringing someone into the fold who will make money for the business. You can break down the referral bonus by offering $250 when the new referred employee is hired, and $500 when they stay for 90 days (or whatever arbitrary numbers make sense for your business).
Remember, though, each role is different, so they shouldn't receive the same reward amount. Business critical roles that have the most impact on your company's bottom line should be rewarded at a higher rate than a common, non-critical position.
One final thought: keep in mind that the candidates you get from employee referrals tend to have lower turnover rates (i.e., they less often quit); plus, referrals cut down on overall cost-per-hire and time-to-hire, so, if done correctly, a referral program can pay for itself.
Should my referral program be manual or automated?
Depending on how many people you employ, keeping track of every piece of the referral program pie can be difficult. When you have so much other work to do, a manual referral program can easily be left by the wayside. After all, who needs one more spreadsheet to wrangle?
Your life could be so much easier if you automate your referral process. Having the ability to auto-post job listings to your internal and external networks instead of emailing every single one, is a good start. If you don't have an application tracking system (ATS) you should make that investment (check out this guide for tips on how to present the idea to your executive team.) An automated referral program that's integrated with your HR, benefits and payroll systems will make your life infinitely easier if and when you do hire the candidate. Everything from onboarding to benefits enrollment could be right there at click of a mouse.
Do I have a process in place to quickly and easily communicate to referred candidates?
We all know the feeling: A friend sends us a link to The Perfect Job. We apply. And then… crickets. An additional (and so important we listed it separately) aspect of automating your referral program includes communication triggers: templated emails that are automatically sent when an employee applies as a referral and during the hiring process are an important part of a solid program. Timely communication will always work to support your employment brand. And, to be clear, this process should apply to all of your candidates, not just referrals.
What, if any, human resources analytics are we gathering?
Automation technology should include HR reporting and analytics tools. They're very important for several reasons: keeping track of your diversity programs, measuring the candidate experience, participant rate, and the referral to hire ratio. Here are some key metrics to start tracking right away:
- How much are referrals contributing to my candidate pool?
- What percentage of hires are referrals?
- Do these people fill the role faster than non-referrals? (Time-to-Fill)
- Is there a lower cost-per-hire through referrals?
- Do these employees have a lower turnover rate?
- Do they have higher performance reviews?
Start small, but as you build your program, consider the far-reaching impact of getting a great employee, through a low maintenance referral program, and ladder it up to bigger metrics.
Employee referrals are one of the most reliable and cost-effective methods for finding talent. For the best results, it's important to ensure you're communicating the availability of the program to your employees. Just as important is ensuring it's easy for them to send you candidates. Bottom line: The success of your referral program depends on driving employee participation. Read more information about recruiting team members, here.