New hires who came through their peers’ recommendations tend to stick around for more than four years. And that’s 70% longer than those who were hired through any other recruitment technique. So, does designing and managing successful employee referral programs sound like your new priority? Odds on that you’re Googling it right now!
Before starting to strategize and asking your trustworthy staff about their former colleagues and friends, take a few minutes to read this guide. If you’re looking to enhance your hiring strategy, you’re in the right place. This comprehensive guide will take you through the ins and outs of designing and managing successful employee referral programs, helping you tap into the power of external referrals through Recrooit. So, let’s dive in and learn how to optimize your recruitment approach for better results.
Chapter 1: Understanding Employee Referral Programs
What is an Employee Referral Program?
Employee referral programs are a structured system used by many companies to hire top talent through their existing staff. In simple terms, team members recommend their peers for open positions while considering the necessary skills, knowledge, experience, and background. These referrals align with the company’s mission and vision, ensuring a strong cultural fit from the start.
What if there was a way to boost the odds of sourcing and interviewing the right candidate four times? Well, according to studies, that’s precisely what successful employee referral programs are for. The applicants who came through this recruitment method are four times more likely to receive a job offer than those who submitted their resumes through job boards or were recommended by a recruitment agency.
But what exactly is an employee referral program? In simple terms, it’s a structured system many companies use to hire the best people with the help of their staff. So, team members recommend their peers for open positions while keeping in mind the necessary skills, knowledge, experience, and background. Also, they understand the company’s mission and vision, and they aim to refer people who can match those essential elements.
Chapter 2: The Effectiveness of Referral Programs
Let’s bust a myth: Do referral programs really work?
It all sounds quite straightforward, right? Once you define your hiring needs, all that’s left to do is spread the word. Well, there is a bit more than just letting your crew know who you want on board.
But are employee referrals effective? To put it shortly – absolutely! Have you ever heard of those super-important recruitment metrics we all have to track? A successful referral will impact each and every single one of them! For starters, referrals save money. How so? First of all, they grant companies access to a far more massive talent pool and open infinite networking opportunities. That way, you will save lots of time, and your cost per hire will be significantly reduced. Moreover, employees’ recommendations bring more qualified candidates. Not to mention what that means in the long – starting with increased retention rates. According to the data, referred hires are 350% less likely to get fired.
Chapter 3: Buzzworthy Benefits of Successful Referral Programs
So, we’ve mentioned a few significant benefits of using referrals to hire top talent. But there’s a lot more to look forward to once you implement this effective recruitment method. Here are a few more key perks to add to the checklist:
- Referrals produce the highest RoI,
- Their positive impact on the employer brand secures more successful hires,
- An internal referral program increases employee engagement and satisfaction.
Translated into numbers, 82% of the workforce absolutely loves this hiring strategy. Both employers and employees recognize the advantages of hiring through recommendations. And 71% of businesses are positive about the influence referral bonuses have on their employees’ experience. These extra incomes combined with the chance to take part in the company’s growth are truly powerful motivators.
Chapter 4: Building Blocks of a Successful Referral Program
All successful employee referral programs were built on the same foundation. It’s all about communication. So, before you ask employees for referrals, it’s vital to have it all planned out. And then, take them on a step-by-step tour of the agenda. Let them know about each key responsibility and job requirement, the importance of the role, and the process that will follow.
Notify them about the way they should submit their recommendations. And here’s another piece of advice to memorize – make the submission process easy & breezy. Don’t waste their time with long forms and unmanageable procedures. Finally, it’s vital to keep every participant posted. Give regular feedback and make it meaningful.
Chapter 5: Creating an Effective Referral Program
How Do You Create an Effective Referral Program?
Now, if you want to improve your quality of hire while saving time and money, referrals are the way to go. But if you truly want it to work like a charm, you can’t skip any of these essential steps:
- Assess your actual needs and align your job description with them.
- Ensure all staff members are familiar with your hiring criteria.
- Recognize and reward your top referrers.
- Offer enticing monetary and non-financial incentives for referrals.
- Embrace diversity in your approach, using various tools and tactics to design and manage successful employee referral programs.
Are you ready? Now let’s break every step into easily understandable (+ actionable) chunks of information.
Have a clear list of job requirements
Even though it may seem like your employees know the company from A to Z, they are often unfamiliar with some processes and requirements. First of all, they might be uncertain about your candidate persona. Truth be told, they probably don’t have a clue what the term itself is about. So, it’s vital that you share all relevant information with them. Make sure that they’re completely aware of who you need on the team – and why. Plus, keep it all in written form. Share detailed job descriptions and send emails that will clarify all procedures.
Finally, before you list the must-haves and inform your referrers, make sure that you have a referral-worthy culture. And teach your staff members to promote it.
Keep employees informed
Employees who recommend candidates wish to receive regular updates on the recruitment process. Not getting any feedback can make employees hesitant to refer again. And this is a common yet ridiculous mistake that sabotages your hiring efforts.
Now, if you’re aiming at stellar results and fail-proof communication, you’ll need to track a metric or two. First, it’s crucial to know the exact number of employees hired through referrals. Also, be sure to keep track of the number of qualified candidates you’ve got through this program and keep tabs on the rate of employee participation.
Finally, once your referrers make a successful hire, keep on measuring the outcomes. Don’t skip retention rates, and compare these figures with those regarding new hires who came by other sourcing methods.
Show appreciation to referrers
Acknowledging good referrers is paramount. And public recognition is the best way to let them know how valuable their help and knowledge are to the company’s growth. So aside from the bonuses they’ll receive, don’t forget to say a few words of gratitude. Keep in mind that most businesses grant rewards after a referred hire stays with the company for a certain period of time. If this is the policy you intend to practice as well, find alternative ways to keep your referrers hyped and ready to work their magic again.
Come up with a bonus strategy
To say that money is a popular motivator would be an understatement. Each employee will be thrilled to receive a monetary bonus after referring a qualified candidate. Still, experience and the feeling of accomplishment are what go a long way. So keep your ears wide open to employees’ ideas and passions. And strive to reward engagement rather than just the final results.
Wouldn’t it be great if you let your top referrers have some extra time off? And sometimes, you could offer them coupons that encourage them to practice their hobbies. But ultimately, whatever you choose for your cash and non-cash prizes, be sure that it’s perfectly aligned with your budget, aims, and employees’ expectations. So think of these factors and tactics as early as possible.
Experiment with tools and tactics
It is best to conduct a survey with employees and find out what drove them to refer or skip the entire initiative or a particular candidate. Encourage them to make suggestions and help you shape or enhance your referral strategy. A successful employee referral program keeps on being adjusted and promoted by using various different tools and initiatives. So, don’t be afraid to explore techniques and gizmos!
For instance, you could try to gamify the whole process. By doing so, you can let your team members award each other with virtual credit. Also, it would be wise to use recruitment affiliate software. That way, everyone would definitely be in the loop, and you will even be able to expand your pool of referrers outside the company.
Designing successful employee referral programs is the ultimate way to hire
So, as you’ve seen, creating and managing successful employee referral programs isn’t that hard. It does require patience, careful planning, and a lot of communication. But it will help you get amazing results really quickly.
However, if you aim for the sky, you should expand your referral network outside the team. Choose a simple and effective platform that will help you meet and greet the best industry professionals.
