Why and How to Create an Employee-Referral Program
Why and How to Create an Employee-Referral Program

Why and How to Create an Employee-Referral Program

One of the most efficient ways to recruit new hires is to build a strong internal referral program that incentivizes your current employees for recommending promising candidates.

In a recent webinar, Paycor HR experts Karen Crone and Todd Rimer described the benefits of a robust referral program and the best practices for creating one at your organization.

Why referrals?

Employee-referral programs can reduce your time to fill open positions and also yield higher-quality candidates who need less ramp-up time once they’ve started with your organization.

Candidates generated from referral programs are five times more likely to be hired. That’s because your current employees know how to identify who will do well and who will fit in at your organization. Referrals also have higher retention rates, and referral programs yield added diversity in your candidates and hires.

Because you’re meeting with top-notch candidates already vetted by someone who knows your business, you spend less time interviewing and can hire more quickly, with greater confidence that you have a culture fit.

Once a referred new hire starts, he or she tends to require less time to productivity. Referred hires often need less onboarding and training time, and the employee who did the referring generally steps in as a mentor and coach.

A referral program is also a great indicator of morale. If your employees aren’t happy, they won’t refer their friends! So your referral rate closely mirrors your employee satisfaction rates.

Added benefits

Referral programs also bring along some “softer” results that benefit your organization overall.

When employees are networking on your organization’s behalf, their messaging is more authentic than any online sales pitch or careers page. Their information is also probably more detailed and current than what a prospective hire will find from a Google search.

Your employee base also provides you with a broader sourcing network and organically spreads the word about your brand. That’s terrific, free PR!

If your employees know their top competitors in the field, those rivals might become your best hires someday. They know your industry and can walk in and get going right away, giving you an immediate competitive advantage.

Lastly, involving employees in a referral program allows them to develop a greater appreciation for the recruiting and hiring process. You make your associates true stakeholders with ownership of how the organization grows and develops.

Tips for your referral program

* Your recruiter will drive the referral program, initiating conversations with prospects, tracking results and taking candidates through the process. Each referral should get a call within a certain timeframe; at Paycor, it’s within 24-48 hours. A service-level agreement will keep your employees engaged and motivated to refer. If the candidate doesn't fit the need, let your employee know politely and educate him on what he can do differently to help in the future.

* Use internal communications tools to ask for and celebrate referrals to generate constant buzz. At Paycor, we offer a financial bonus for referrals after the new hire completes 90 days on the job. Reminding associates of that bonus is a great motivator!

* Conduct 1:1 meetings with managers in each line of business. They have broad networks and tend to meet potential candidates at trade shows or conferences. Also talk to recent hires and learn about their connections. Many would be thrilled to have former colleagues join them!

* Track your referrals to see who referred whom, what worked and what didn’t. You then can tweak your program after analyzing that data.

A referral program is an integral piece of any effective hiring and retention strategy. To learn more, download Karen and Todd’s complete webinar, 6 Tips for Recruiting and Retention.

And take a look at Paycor’s Applicant Tracking solution, which makes hiring more efficient and effective no matter where you source your candidates.

More to Discover

Paycor’s Broker Care

Paycor’s Broker Care

We know that your clients expect a lot from you as their trusted advisor. But who do you depend on?For 30 years, Paycor has been listening to and partnering with the leaders of medium & small business, so we know what they need: HR technology that saves time, powerful analytics that provide actionable insights and dedicated support from HR experts. Partnering with Paycor helps you stand out from the crowd with access to personalized support, resources and services that align with your business development strategy.One of the ways we help you serve your clients better is through Broker Care. Our dedicated support specialists are here to help you take your client relationships to the next level.

How Businesses are Managing the New Reality of Work: A Paycor Survey

How Businesses are Managing the New Reality of Work: A Paycor Survey

COVID-19 changed the way nearly everyone works and left a lot of unknowns about how to budget and make plans to move forward. To understand exactly how coronavirus impacted medium and small-sized businesses and their workforces, Paycor surveyed nearly 600 HR and finance leaders.Did they need government funds? How many workers did they furlough or layoff? Are employees working from home now? How’s team morale? And perhaps more importantly, what are their plans for the future?This guide offer a pretty good idea of how business leaders are feeling, what keeps them up at night, and what approaches they’re taking to solve problems.

Importance of Employee Financial Wellness Programs for Small Businesses

Importance of Employee Financial Wellness Programs for Small Businesses

The majority of people seem to be relatively well-informed about personal wellness: physical activity, eating right, drinking the recommended amount of water every day. But many people are unfamiliar with the term “financial wellness.”Financial wellness refers to someone’s overall economic health as well as their lack of worry associated with money. Poor financial health is a known cause of personal and professional stress. Issues with finances can be a distraction at work. In addition to the monetary burden, the side effects of poor financial health often include: Absenteeism and presenteeism Depression Anxiety Stress-related illness Reduced productivity Marital conflict As life goes on it gets more complex, especially regarding...

Short-Term Disability Benefit Laws by State

Short-Term Disability Benefit Laws by State

What Is Short Term Disability Benefit? When unable to work due to an unexpected illness or injury, employees rely on insurance to cover at least part of their usual salaries. If this injury or illness is job-related, they can claim Workers’ Compensation. However, non-job-related absences require Short-Term Disability (STD) insurance or Temporary Disability Insurance (TDI) plans. Many companies offer short term disability insurance as part of their benefits packages, but several states (and Puerto Rico) have legislation making it mandatory. Though these laws vary as to how the insurance is funded and which employees are covered, in all cases it is only possible to receive the benefit after a 7-day waiting or eligibility period during...