The Dos and Don’ts of Referral Programs

Employee referral program software provider Zao, pulled together some powerful statistics in their infographic, “How to Implement an Employee Referral Program”. They found that:

  • 1 out of every 5 referrals gets hired.Tweet it!
  • Referrals are #1 for diversity hires.Tweet it!
  • Referrals are 5x more likely to get hired. Tweet it!
  • Referrals are the highest quality hire. Tweet it!

Employers know just how beneficial a strong employee referral program can be, but so many of them are disjointed, across multiple departments and don’t really have a strategy in place. Here are a few helpful dos and don’ts for your employee referral program.

Don’t Expect a Favor Without a Favor

Your quality referrers are saving the organization and you in several different areas of resources. A great referral can make a huge difference in the hiring process, and that referrer should feel the value of their contribution. Andrew Greenberg wrote a great post on expert advice for effective employee referral programs in the Recruiting Division blog. Greenberg defines several options recruiters can take to step up their rewards in order to improve their referral program effectiveness. Here are a few of those tips:

  • 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
  • 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
  • Use your Applicant Tracking Solution to track employee referrals and any payouts to make your life easier. (Cyber Recruiter does this and more.)

Do Expand Beyond Employees

Broaden your referral program reach to include retired employees, friends and family of current or retired employees or even vendors. Anyone who has a feel for the culture and values of the company, and is invested in the organization’s success would be a great candidate for a non-employee referral program. HR thought leader and frequent ERE contributor, Dr. John Sullivan said:

“An FOF (Friend of the Firm) program will dramatically expand the number of individuals who are acting as 24/7 talent scouts for your firm. This increased number of talent scouts is especially important for startups and small firms that simply don’t have very many employees to look for or vet referral.” 

Don’t Skimp on the Red Carpet Treatment

Quality referrals are so valuable to the company, so it is vital to ensure that they keep coming in. Referrals should be ushered to the front of the line, they should be contacted immediately, interviewed as quickly as possible and followed-up with in a timely manner. Additionally, the referrer should be kept in the loop and made aware of the special treatment that the referral is receiving. A strong referral program will reap amazing benefits –don’t be skimpy with the thanks to those who have supported you and the organization. Be sure to use your ATS to automate some of these processes to ensure promptness in providing responses.

Do Use Your Tech

People appreciate simple processes. Your referrers are far more likely to participate in a program that makes submitting a referral quick and easy. An employee referral portal is the ideal way to get the program organized, make it appealing to referrers and create a seamless process. A referral portal will also provide the referrer with all the information they need in one spot to help ensure that they are making quality referrals and inform them of the process. Some Applicant Tracking Solutions allow for unlimited users, which can provide employees with access to submit their own referrals. This ease of use encourages employee participation in referral programs.

Don’t Treat Everyone the Same

So, this might sounds like an EEOC nightmare at first, but I’m talking about the referrers. Some referrers will bring you stellar, quality leads more often than others, and they will need special treatment if you expect them to continue supporting your efforts.

Aside from rewards, these valued referrers should receive timely communication, they should know that the candidate they referred will have a great experience with the company, and their value should be strongly reflected in all correspondence. Additionally, those employees who have established a poor standing in the referral program should have their referral privileges revoked, and it should be clearly communicated why.

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photo credit: asenat29 via photopin cc

Views: 183

Comment by Keith D. Halperin on April 21, 2014 at 12:56pm

Very good. Another "don't": Don't "nickle and dime" your rewards: if you'd pay an agency 20% to fill a position, how about 5-7% as an ER reward?



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