Secrets of a Successful Employee Referral Program

Employee referral programs never go out of style, because they work. But not all programs get the same results.

Whether you’re implementing an employee referral program for the first time or revamping an existing program, you’ll want to follow these guidelines.

Get Employees Involved in the Process

An employee referral program requires current staff to share their positive work experiences with family, friends, and former colleagues. How open are your employees to doing this?
To learn the answer, you can take one of two approaches: survey all employees or ask a select group of top performers to serve on a committee. As part of either process, find out whether employees would recommend the company as a place to work.
If the answer is yes, find out what they like about working for the company and move forward. If the answer is no, you have issues to overcome before you can implement a successful employee referral program.

Choose Rewards that Provide Incentive

Motivating employees to refer job candidates requires attention to incentives.
A cash referral bonus is the most common reward. Amounts typically range from $500 to $2,500, according to WorldatWork, a global human resources association focused on compensation, benefits, and total rewards.
Cash, however, isn’t the only reward option. According to ITA Group, a provider of employee engagement solutions, non-cash rewards have become increasingly popular in recent years. Incentive travel rewards and experiential rewards (spa days, concert tickets, expensive dinners, etc.) allow for individualized experiences that allow for emotional engagement, the firm says.
The key is to find what resonates with your employees and tailor rewards accordingly.

Communicate Program Details

It goes without saying that unless employees know about your company’s employee referral program they can’t participate.
With this in mind, you should launch or re-launch your program with great fanfare, using all available communication channels. Make the program sound like a win for all concerned—because it is.
Then, continue to communicate with employees about the program on a regular basis.
You can do this by sharing data and program milestones, such as number of new employees hired via referrals, number of employees who received bonuses/rewards, and/or total value of bonuses/rewards paid. Sharing information will help keep the program top of mind.

Incorporate Social Media into Your Strategy

Social media makes it easy for your employees to communicate with colleagues and others about job opportunities at your company.
To facilitate referrals, make sure job postings are just as easy to share.
You also want to make sure employees and would-be candidates have access to a recruiter or person in HR who can answer questions. You can use social media for these conversations as well. A Facebook company page allows for private messaging, as does Twitter.

Measure Program Effectiveness

Once your program is up and running, don’t forget to measure results.
Metrics, like number of hires from referrals, retention rate of these employees, and job performance of employees recruited via referrals, will let you know whether you’re on the right track or if program changes are necessary.
Leading organizations consistently point to referrals as their top source of external hires. Attention to these details will help you build a program that gets similar results.

Paula Paula Santonocito, Contributing Editor for Recruiting Daily Advisor, is a business journalist specializing in employment issues. She is the author of more than 1,000 articles on a wide range of human resource and career topics, with an emphasis on recruiting and hiring. Her articles have been featured in many global and domestic publications and information outlets, referenced in academic and legal publications as well as books, and translated into several languages.