Expert Advice for an Effective Employee Referral Program

The Michael Jordan of hiring, Dr. John Sullivan, has a few thoughts on employee referral programs. He has had the opportunity over the years to take a look at hundreds of employee referral programs, and he hasn’t been impressed. He says most are “pretty dull” and basic, but even so, referrals produce a higher volume of quality hires than external recruiting sources. His conclusion from 20 years of observation and research? Employee referral programs at world class firms have dedicated management attention and resources and provide a competitive advantage for those organizations.

Dr. Sullivan says that employee referral programs that produce competitive advantage incorporate exceptional features that make them highly effective. Those features are strategic, improve referral program quality, help sell the organization, improve the effectiveness of referral rewards, drive program responsiveness, and include strong communication and technology.

Strategic Features of Employee Referral Programs

The most effective employee referral programs incorporate strategic planning to get the desired results: top quality hires. Companies set up referral programs for success by focusing referral program resources on high-impact and hard-to-fill jobs rather than all jobs or jobs that can be filled with normal resources. When a high-impact position is vacant, focus the employee referral program marketing on it, offer varying awards weekly for referrals highlight the opening and keep it on employees’ minds, and promote the referrer and new hire when the opening is filled. Pay attention to top referrers, those employees who have previous successfully referred good candidates, and give their referrals priority. Incorporate social media in your employee referral program to take advantage of the global reach it has created.

Improve Referral Program Quality

World class organizations with highly effective employee referral programs don’t leave their referral programs in limbo or in the hands of an overburdened cross-departmental committee. They manage their programs to improve the quality and volume of referrals coming through their programs.

They do this by:

  • Targeting referral requests to the employees most likely to interact with the types of candidates needed instead of using a blanket approach
  • Emphasizing diversity if diversity hires are desired
  • Providing electronic or paper referral cards that praise the recipients
  • Involving current employees who worked at competitors or other desirable firms that have the qualified candidates they seek
  • Include non-employees in the referral program, such as retirees, vendors, spouses, and customers
  • Conducting contact gathering events to encourage employees to review contacts and networks for referrals

Help Sell the Organization

The best employee referral programs aren’t just candidate sourcing machines. They are sales tools that tell the company’s stories to attract and engage candidates. One of the best tools for this is compelling job descriptions. A compelling employee referral program slogan, such as Google’s “Good People Know Other Good People,” gets referrers attention and interest. Giving top referrers the ability to guarantee an interview for their best referrals encourages them to really sell candidates on the company. Videos highlighting key employees, an exceptional work environment, current projects, or other key aspects of the company help engage and compel candidates to want to work at the company and take action to apply.

Improve the Effectiveness of Referral Rewards

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Boring or inadequate employee referral program rewards just aren’t part of best practices at world class companies. Advanced features of effective referral programs include improving rewards with several tactics:

  • Offer a charity donation option as a referral reward
  • Offer prize drawings and other non-cash awards such as a reserved parking spot, lunch with the CEO, automobile leases, or tickets to high-profile events
  • Adjust bonus amounts for different levels of referring and results, such as $100 for name only, more for full referral with resume and formal introduction and for top referrals that aren’t hired
  • Offer bonus amounts for hard-to-fill or hot jobs
  • Offer gross ups on bonuses, paying the taxes and giving referrers a full payout on rewards
  • Handwritten thank you notes from the hiring manager or recruiter for the referral

Drive Program Responsiveness

World class companies take employee referrals very seriously and give them the attention they deserve to ensure the responsiveness that secures quality hires. Responding to referrals within a day or two, interviewing “A” quality candidates within a week, and on-the-spot screening guarantee interest stays high and referrals don’t get lost in the shuffle.

Include Strong Communication and Technology

Frequent and effective communication for the employee referral program processes are key to keeping referrals fresh and increase process awareness. Do this by including periodic feedback to referrers and candidates, holding follow-up meetings after top referrals, providing direct feedback about weak referrals, and opening a 24/7 help desk or help line for referral questions and guidance.

Technology for employee referral programs is important to success. Multiple channels for referring, such as email, web form, dedicated phone number, or text give referrers flexibility and help avoid missed opportunities. A website dedicated to the employee referral program that lets referrers track their referrals or stand alone referral kiosks for tracking and submissions also contribute to flexibility and ease of participation. Integration with social media such as LinkedIn and Twitter enables referrers to easily tap into their networks.
Avoid These Referral Program Killers

Dr. Sullivan has observed the best employee referral programs and can recognize what’s wrong with a referral program. He advises hiring managers and recruiters to avoid the following:

  • Slow response to referrals and questions
  • Making referrers wait months to receive referral rewards
  • Using a blanket approach by asking all employees for referrals
  • Not tracking employee referrals in the application tracking system for analysis
  • Boring rewards or the same rewards for all referrals
  • Not giving feedback or direction on weak referrals
  • Too many rules and restrictions on referrals
  • Not giving referral applications and resumes priority in the recruiting process
  • Employee referral program manager turnover

Take the advice of an experienced recruiting and hiring expert and give employee referrals the attention and resources needed for high quality, effective referrals of top candidates. Soon you’ll have the same kind of high volume and high quality referrals in your recruiting process as world class organizations who know the value of effective referrals.


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