By Ziv Eliraz
Whether your business produces a great product, or you offer an innovative service, your company is only as good as the people who work for you. A challenge as a business owner is to find good employees, and one of the best sources for job candidates comes from the referrals of people you know.
Referrals are the number one source of new hires, and hires from referrals produce about 25 percent more profit for a company, and also are 20 percent less likely to quit their jobs.
When people you know refer you to their contacts, you’re effectively putting the power in their hands, which means they aren’t going to refer just anyone. Members of your network care about their reputations and won’t want to damage that reputation with a bad referral.
Anatomy of an Employee Referral Program
An employee referral program is essentially a tool your team can use to track, engage, solicit, and manage job referrals from members of your network. It’s like an “all-in-one hub” to send out job postings, find out where referrals are coming from, and understand the rate at which referrals get hired.
Employee referral programs come in many shapes and sizes; however, you should look for programs that make it easy for members of your network to refer qualified candidates. Think of it this way: Your network probably goes beyond your current employees and might include former coworkers, business partners, and vendors. Because participation in a referral program is additional work for your network, you should therefore choose a program that makes the process as easy as possible.
Engagement Boosting Strategies
People put a lot of effort into the initial launch of an employee referral program, and then not a lot of effort thereafter. While an employee referral program is a great way to source hires, engagement typically dips after the initial launch. To avoid this, you should encourage some engagement boosting strategies. These include:
- Referral rewards. By implementing rewards in your referral program, you’re effectively giving members of your network an incentive to participate. Examples of rewards include gift cards, cash rewards, public recognition, holidays, product rewards, or even a donation to charity.
- Gamification strategies. Gamification is the use of game mechanics, such as points and leaderboards, to encourage participation in employee referral programs. Think of gamification as a fun way to entice referrers. Friendly competition can recognize the efforts of those who participate in the recruiting process.
Plus, when you allow your team to vary the rewards according to the steps of the hiring process, referrers are further encouraged to produce great candidates. For example, a qualified lead can result in social recognition while an actual hire can lead to a cash reward.
For additional engagement tips, remember the three “F’s”:
- Friends. With typical employee referral programs, employees have very little insight into how other referrers are doing. By encouraging collaboration with friends and network members, they’ll begin to see other people participating, which reinforces their decision to take action. This will increase the number of participants in a program, as well as number of referrals.
- Feedback. If you provide timely feedback to employees about their referrals, then they’ll always know what you’re looking for. In addition, try to thank the people at the top of your leaderboards. While small rewards are nice, thank you’s also show your appreciation and will boost engagement.
- Fun. As previously mentioned, tactics like gamification can make the process fun. For instance, leaderboards show the top referrers, which includes the number of referrals they’ve made. It also allows employees to see how their efforts stack up against different departments or groups.
Factors to Streamline Referrals
Now that we’ve learned how to boost engagement in an employee referral program, here’s how to streamline the process:
- Automation. Automation involves automatically compiling jobs, sending relevant reminders to the right people, as well as follow-up actions. For instance, forwarding a list of appropriate jobs to your network every Monday at 3 p.m. automatically reminds people to check out openings.
- Selective distribution. Selective distribution means forwarding a job to only specific people, restricting the number of candidates referrers can recommend. This strategy also limits the degrees of separation between referrers and applicants, blocking referrals from anyone who is more than one or two degrees of separation away from a candidate. This can lead to better results since applicants are filtered out.
- Mobile capabilities. Since approximately 30 million Americans work remotely at least one day a week, create a mobile referral portal or enable referrals through mobile devices so participants can stay involved, even if they aren’t in the same location as you.
Consider setting up an employee referral program as a hiring and retention strategy. Not only is it a simple way to find great hires, it leverages the power of your network by bringing you better, more qualified candidates.