Recruiting has been tough in recent years. We have many clients who successfully use an employee referral bonus program to supercharge their recruitment of talent. Employee referral programs accomplish three important objectives: (1) it engages employees in the business and adds excitement; (2) it pays current employees (instead of recruiting companies) for qualified leads; and (3) it expands the company recruiting reach to passive job seekers. Here are some steps to create an effective employee referral program:
- Define the program’s objectives: Before creating an employee referral program, it is essential to understand what you want to achieve with it. Your objectives may include reducing recruitment costs, improving employee retention rates, exciting employees and finding good candidates.
- Determine rewards and incentives: Decide on the type of rewards or incentives you will offer to employees who refer successful candidates. Monetary incentives (bonus or cash), or non-monetary (paid day off) or a gift card. Set the value appropriately – we have clients using $100 for entry level workers to $3,000 for highly paid professionals. Make the reward worth the effort of referring qualified candidates.
- Develop a communication plan: Once you create the program objectives and incentives, write a communication plan (email, flyer etc..) to inform employees about the referral program. Use multiple channels, including emails, social media, and team meetings, to spread the word.
- Create referral guidelines: Establish clear guidelines for the referral process. Outline the positions that are open for referral, the basic qualifications required and how the referral process works. Employees need understand how to refer candidates and what information they need to provide (include the employee’s name on the application, or with the shared resume).
- Monitor the program: Track the number of referrals received, the success rate of referrals, and the overall cost-effectiveness of the program. Regularly review the program’s performance and make necessary changes to improve its effectiveness. We have a client that receives 50% of its new hires through the referral process!
- Publically recognize and reward successful referrals: Recognize employees who make successful referrals in a public way. Celebrate their achievements and make sure they feel appreciated for their contributions to the company’s success. Company communications and social media are great ways to show appreciation to those employees.
- Continuously improve the program: Keep improving the employee referral program over time. Solicit feedback from employees and candidates to identify areas for improvement and make changes accordingly.
By following these steps, your company can create a supercharged and effective employee referral program that will bring qualified candidates to your door and also help you retain top talent.