Setting Up a Quality Employee Referral Program

The No. 1 way people discover new jobs is from employee referrals, according to LinkedIn Talent Solutions.

How can you get more?

Employee Referral Programs, especially within an organization with stellar culture and engagement, can add a robust recruiting funnel to the hiring process. One study by LinkedIn Talent Solutions shows that effective Employee Referral Programs can expand the talent pool by 10 times. Learn how to build a strong company culture.

For industries like construction and retail, which are facing epic levels of worker shortages, landing more employee referrals can make a powerful impact on a company's bottom-line.

By building and developing a strong and thoughtful Employee Referral Program, your company can better tap the resource they have right in front of them: their own employees.

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What is an Employee Referral Program?

An Employee Referral Program encourages employees to recommend and recruit qualified potential candidates to the company. When properly administered, an Employee Referral Program will generate referrals who:

  • Stay longer
  • Are more engaged
  • Understand the job role better
  • Are more likely to refer future employees
  • Have a higher ROI than employees coming from other sources
  • Take a shorter time to hire

Starting Your Program

In order to turn on the flow of employee referrals from your workforce, you need to do the work to set up a great program that is:

  • Well communicated to employees
  • Easy to access
  • Simple to participate in
  • Clear about expectations and outcomes

Talk to Employees

You need input from employees about not only what they'd like to see in the program, but also about their feelings regarding your identity as an employer. Hopefully, you've already got data on how engaged and enthusiastic your employees are, but if not, you need to find out.

The bottom line: Your Employee Referral Program won't take off if your current workforce doesn't think you're a good employer. New to employee surveys? Learn how anonymous surveys can give great insight.

Design the Program

To create your Employee Referral Program, consider these points:

  • Set goals for the program, like how many referrals you'll get in the first six months, or how many employee referrals convert to hires.
  • Make referring a contact simple, including a short form that is easy to find and fill out.
  • Eliminate unnecessary steps, like needing to include a resume.
  • Create an incentive for employees to participate, typically monetary or public recognition.

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Running Your Program

Once you have your program objectives and plan in place, you need to launch it to your employee base. This can look like a full-on marketing effort, or simply an email to the team about why it was started, how to use it and what they'll get if they participate.

When a Job is Posted

Any time you're hiring, be sure to communicate to your team that there's an opening and you'd love to hire a referral.

  • Remind them how to refer someone, and why it's worth their effort.
  • Explain what the ideal candidate looks like.
  • To increase participation, provide sample text for them to use when posting on social media or approaching prospects directly.
  • Learn how to write the best job description.

When an Employee Referral is Submitted

Employee referrals come with a lot of nice statistics, so courting them as VIPs makes sense, but they're also a personal contact of one of your employees. The last thing you want is for your current employees to feel embarrassed or annoyed at how their pal was treated. Once a referral comes through, be sure to:

  • Keep your employees updated on the process.
  • Give feedback to employees if they submit an unsuitable employee so they can improve their recommendations.
  • Treat the referred candidate with all due respect, including contacting them about their name coming in as a referral and keeping them updated about the hiring process.
  • Learn how to create the best candidate hiring experience.

Tracking Your Program

Launching an Employee Referral Program should create a nice Return on Investment (ROI), and you should track your program performance in order to prove it. Employee surveys about the program, as well as other important data, will be critical in proving the effectiveness of your efforts. Make sure to track data, like:

  • When it was launched
  • Who has referred candidates
  • Retention rate of referred employees
  • Employee satisfaction of referred employees

Employee Referral Programs can make a major impact on your recruitment process and save your company money. The end-game for a successful Employee Referral Program comes down to your reputation as an employer: If your employees want others to come work alongside them, you must be doing something right.

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