Thinking of bringing your employee referral program into the 21st century? While it’s always good to come up with fresh ideas, the program's foundation is basic — offering some kind of incentive to your current workers if they recommend an applicant with the qualifications to fill an open position and you hire them.
It all started way back in 55 B.C. when Julius Caesar offered 300 sestertii to soldiers recruiting for the Roman army. But you don’t need to pay a third of your employee’s annual wages (the equivalent of 300 sestertii) to get your referral program out of the dark days. Instead, use these 5 simple tips to overhaul your current system and make it competitive.
1. Clearly Define Your Ideal Employee Referral
The idea behind an employee referral system is that your existing team recognizes the need for a skilled, hard worker to enhance the workplace atmosphere. Filling an open role with someone known to be qualified and trustworthy is supposed to be more cost-effective and beneficial than finding a stranger and hoping they fit in with the team.
However, this can backfire if the recommendation is unqualified or you hire someone instead of them. Create guidelines in the employer referral program that delineate the company’s requirements for candidates and how to submit a referral through the appropriate process. If there is a probationary period before the reward is paid to the referrer, clarify that here.
2. Know Your Goals
What is the purpose of your employee referral program? To determine this, evaluate your hiring process and pay attention to where the cogs in the system seem to be. For instance, it may take longer than you would prefer to go through the hiring process, and you’d like to reduce the resources used in this time-to-hire stage. Or, the quality of applicants is subpar, and your goal is to increase your number of highly skilled candidates.
Making it about the number of referrals rather than the metrics behind your goals might mean you receive plenty of possible hires but none that fit the bill. Specific KPIs (key performance indicators) can guide you as you adjust your referral program.
To streamline the hiring process and better align with your goals, consider integrating talent acquisition software into your workflow. These platforms can help manage candidate pipelines, track referral sources, and provide valuable analytics to identify what’s working and what’s not. By leveraging the right software, you gain visibility into every stage of hiring, making it easier to fine-tune your employee referral program and ensure high-quality applicants don’t fall through the cracks.
3. Determine the Incentives
We all work for a paycheck, but reward incentives might look different than money. What do your employees value? That knowledge can help you understand the best type of incentive to offer in your employee referral program.
The program is less likely to work if the incentive doesn’t motivate your employees to refer quality candidates. Consider options like monetary bonuses, prizes, recognition, or paid time off. Some companies conduct periodic surveys to determine what motivates their current team and adjust their incentives to match the workplace climate. Making sure your employee referral program is aligned with each person’s diverse background and culture matters, as explained here by Obsidi®.
Be wary of assuming what your team wants and what they appreciate. If they’re unhappy in the workplace, they probably won’t recommend working there to someone they love, regardless of the incentives. By asking them for their input and satisfaction, you can address minor problems before they become big and use the information to tweak your referral program.
To further enhance your referral strategy, it’s essential to create a culture where employees feel appreciated and motivated to contribute. An effective way to achieve this is through an employee rewards and recognition program, which not only celebrates achievements but also encourages active participation in initiatives like employee referrals. When employees experience genuine recognition, they become more engaged and enthusiastic about bringing talented candidates into the organization.
4. Make the Program Easy to Understand
Now that you’ve decided on your goals and the incentive that motivates your employees, it’s time to share it with the team. It’s tempting to make it complex and answer every possible question with the rollout, but it's easier to follow if you make it simple to understand.
Include information such as who is/isn’t an eligible applicant (for instance, someone under 16 or spouses of managers are often excluded in certain companies). However, verify that your exclusions follow the EEOC’s prohibited employment policies.
How can employees submit their candidate referrals? What’s the process for reviewing, notifying, and rewarding successful referrers? What is the incentive, and how is it “paid”? Be sure to add transparent time frames to the employee without limiting or rushing them. Probationary periods for the new hire are standard.
5. Promote the Program
You’ve laid out the design, researched the metrics, and chosen incentives that match employee motivation. Now, it’s time to share your creation with the team. You can communicate this information through email to give people time to read the fine print, but it’s also wise to hold a meeting and announce it with a Q&A session.
After you roll out the program, keep it fresh in your team’s minds by reminding them of the policies and sharing successful referrals. Ask for ideas on how to improve the referral system through periodic surveys. Continually monitor the program’s success and be open to adapting it as necessary. Remember, your employee motivation and atmosphere will change over time, even if you have low turnover.
Conclusion
Maximizing your employee referral program can turn your general hiring process into a strategy that improves your company’s work atmosphere. Current workers feel valued and included, and new workers are more likely to be skilled, dependable, and engaged.
With faster hiring from start to onboarding, more retention, and decreased costs, your employee referral program can be what you need to bring in your next star team member.