How to reap the benefits of an employee-referral program
The benefits of an effective employee-referral program are endless. There is an established level of trust with a person who is referred. The onboarding process and employee engagement are easier because they know another employee. Over the past 30 years, I’ve interacted with hundreds of hiring authorities who utilize referral programs to attract top talent.
Retention really starts with the recruiting process, and a strong employee-referral program enhances your other talent acquisition efforts.
It’s interesting that the amount of money paid isn’t the only contributing factor to the success of these programs. People, however, do things for their reasons, not yours, so they need to understand the WIIFM (What’s In It For Me). I’d like to share what I’ve observed as the top five common denominators of the best referral programs.
1. The referral program is assigned to a specific individual.
■ This shows the strong commitment to the effort.
■ Having a specific person to manage this process enhances the success of the program.
■ This individual surveys current employees to see what would motivate them to provide referrals of future employees. Often, they are more motivated by a company parking place, time off, travel or recognition than they are by cash.
■ A referral card is created that employees can carry in their wallet or purse, making it very convenient to promote referrals. Southwest Airlines used a card that looked like an airline boarding pass.
■ This individual also develops when and how referral bonuses are paid. Often the best programs pay out upfront without multiple payouts over a period of time. If the person is placed in the same department, a payout over time often results in the new employee being mentored by the referring employee. In this case, a payout over time could be beneficial. For example: 33 1/3 percent on day of hire, 33 1/3 percent after six months, 33 1/3 percent after one year.
2. Training is provided.
■ Employees are trained how to increase their referrals.
■ Employees are taught how to obtain referrals at trade shows.
■ Employees receive updated lists of current talent requirements and their necessary credentials.
■ Employees are armed with a 30-second pitch.
■ We hire _______ who______so they can __________.
■ Employees are asked to think of talent they worked with in all their past jobs, not just their most recent. Loyalty often still exists.
■ Employees are taught how to interact with this person after they are hired.
3. Metrics are kept, reviewed and revised.
■ Monitor strategies that are most effective.
■ Review the referral program every six months, including employees in this review process.
■ Survey employees to initiate needed revisions.
■ Realize if you continue to do things the same way you will get the same results.
4. Recognition.
■ This addresses the WIIFM (What’s In It For Me), in addition to the bonuses paid out.
■ Executives of the company give referring employees recognition by:
■ Presenting them with plaques.
■ Putting their pictures in newsletters.
■ Sending thank-you notes.
■ Lunch with the executives.
5. Annual or quarterly bonus or contest.
Some of the most effective employee-referral programs also offer a larger event, gift or prize that can be won by anyone who has referred a new employee in the past quarter or year.
These can include:
■ Attending an exclusive event.
■ Win a larger prize or trip.
Individuals get one ticket for every employee they refer. The more they refer, the better their chances to win.
It is important to implement all five areas in order to create a strong employee-referral program that will stand the test of time and greatly impact your ability to attract and retain top talent.
Barbara Bruno, CPC, CTS is one of the leading recruiting, sales, management, motivational and internationally renowned training professionals today with 30 years of speaking experience. Reprinted from Recruiting Trends.
