3 Quick Tips for Building a Great Employee Referral Program

Learn the ABC’s employee referrals! Check out 3 quick tips for building a great employee referral program.

Why-Some-Employee-Referral Programs-Fail

How to build a great employee referral program?

First of all, you need to be aware that building an effective employee referral program is no picnic.

Sending out an occasional email to your employees and asking them to share your job descriptions will not get you far.

If you want to harness the full potential of employee referral programs, you need to set up a structured employee referral program.

I’ll be completely honest with you here – it will take some time and effort.

However, it is well worth it!

Employee referral program will soon become your best source of hire with the highest return on investment (ROI), thus improving your cost, time and quality of hire!

3 quick tips for building a great employee referral program

Here are the 3 most important  tips that will help you build an effective employee referral program:

Tip #1: Communicate, communicate, communicate!

The key to a successful employee referral program is an effective communication.

You need to establish an open, respectful and timely communication with both of your main target groups: your employees and your candidates.

If you leave any of them in the dark, it is a sure way to sabotage your own employee referral program, hiring success and your employer brand!

Make sure both of your employees and candidates receive timely, personalized updates about any changes in the referred candidates status.

Tip #2: Automate

Make the use of your employee referral program quick and easy both for your employees and your HR team!

Automate your employee referral process with specialized HR software. Modern recruitment software offer many features that can help you automate, fasten and improve the management of your employee referral program.

For example, this software contains employee referral programs email templates that can be automatically personalized and sent in bulks.

These modern recruiting tools also have one centralized dashboard where you can easily track many different openings and referrals. They also offer detailed analytics and create beautiful reports to support your decision-making process.

Tip #3: Motivate

How to motivate your employees to take part in your employee referral program?

First, you need to set clear and transparent rules. The best way to do it is to create an official employee referral program policy.

Then you need to launch and promote your employee referral program.

There are numerous marketing tactics you can use, such as creating a specialized monthly newsletter, printing out employee referral motivational posters, handing out employee referral stickers and hoodies, etc.

Of course, you also need to provide compelling incentives. But don’t worry – you don’t need a huge budget. There are many other clever ways to offer employee referral awards.

Finally, never underestimate the power of saying “thank you”. Having your CEO publicly recognize your referring employees in front of everyone in an all-hands meeting can have the same effect as a financial reward!

Conclusion

This is it! 🙂

Following these 3 tips is guaranteed to help you build a great employee referral program that will help you find qualified candidates and continuously improve your hiring results.  

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Build an Employee Referral Program in 4 Easy Steps

In this blog post, you will learn how to build an effective employee referral program in 4 easy steps!

Employee-referral-program

How to build an effective employee referral program?

Thinking about building an employee referral program for your company?

Congratulations!

You are on your way to find qualified candidates easier, faster and cheaper!  

Employee referral programs can significantly improve your time, cost and quality of hire.

However, to achieve the highest return on investment (ROI) of your employee referral program, you need to build an effective, structured employee referral program.

In this article, you will learn how to do that in 4 easy steps!

4 easy steps for building an effective employee referral program

Here are the 4 steps for building an effective employee referral program:

Step #1: Plan

First, you need to understand and define your hiring needs and resources.
Then you need to set up specific, measurable and time-bound goals.

Finally, you need to allocate all the resources you will need to set up your employee referral program and achieve your goals

Step #2: Design

Make a life a lot easier for your hiring team and your employees by automating your employee referral process. Modern Applicant Tracking Systems have built-in automated employee referral programs.

Next, you need to make the rules of your employee referral program clear, consistent, transparent and fair by setting up an official employee referral program policy that will contain all the rules in one place.

Finally, you need to design an effective employee referral bonus program.

Step #3: Promote

Organize a special event to introduce an employee referral program to your employees or simply have your CEO announce your new program in the regular all-hands company meeting.

To keep your employee engaged, create specialized campaigns to promote your employee referral programs.
Organize employee referral parties, include a note about your employee referral program in your company newsletter, print out employee referral posters, etc.

Step #4: Maintain

Make sure you recognize the effort of your employees and show your appreciation.  

for their contribution to your company. Reward them and celebrate each and every successful hire made through employee referrals.

It is also important to track and measure the results of your employee referral program.

Analyzing your results will also help you discern your best practices and bottlenecks.

4 Companies With the Best Employee Referral Awards

How do successful companies motivate their employees to take part in employee referral programs? Discover the secrets of the 4 companies with the best employee referral awards!

4-Most-Innovative-Employee-Referral-Bonus-Ideas

Employee referral awards: A perk or a necessity?

Let’s make one thing clear – great employee referral awards are not just another, cool perk that big brands use to showcase their Employer Brand.

Great employee referral awards are a necessity if you want to motivate your employees to take part in your employee referral program.

It is not enough to simply setup up a structured employee referral program.

Yeah, you as an HR professional might be excited about your brand new employee referral program because you know it can significantly improve time, cost and quality of hire.

However, your employees won’t share your excitement if you don’t lure them in with some great employee referral incentives!

So what type of employee referral awards work best?

Let’s take a look at the industry best practices.

4 companies with the best employee referral awards

1. Google

Google found out that giving its employees trips to Hawaii is better than offering them a $1M employee referral cash bonuses.

It may not be the first thing that comes to your mind, or even your employees’ mind when you ask them what they would like.

However, according to Google, it is what makes employees happier than cash incentives.

➡️ Key takeaway:

Test out Google’s best practice with your own employees!

Although your company probably can’t afford to send your employees to Hawaii, look or a more affordable trip option you can offer your employees.  

2. DigitalOcean

DigitalOcean launched its new referrals incentive structure in May 2017.

For each referral candidate who is hired, the referring employee received a $3,500 referral bonus in addition to a $1,500 charitable donation paid by DigitalOcean on the employee’s behalf.

The result? By the end of 2017, 40% of DigitalOcean’s new hires have been acquired through referrals.

➡️ Key takeaway:

Structure your employee referral bonuses to serve a good cause.
Instead of offering a cash prize, offer to make a donation to your employee’s favorite charitable organization.

3. Hewlett Packard Enterprise

Instead of focusing solely on great employee referral awards per se, Hewlett Packard Enterprise builds a culture around it.

They regularly organize company events to honor and publicly recognizes employees who refer qualified candidates.

By recognizing their referring employes as “champions” and celebrating their success, this company achieves a greater employee engagement.

➡️ Key takeaway:

Don’t focus only on your employee referral awards and forget to thank your employees for referring great candidates!  Even if their candidate doesn’t end up hired in the end, you should still think of a way to thank them for their time and effort.

4. Distillery

Distillery is a software development company that has struggled to find and attract highly-qualified software developers.

This is why they turned to their current software developers and asked them to recommend great candidates.

Along the way, they discovered that their employees are most motivated when offered new gadgets such as a new iPhone or Apple watch.

➡️ Key takeaway:

There is no universal best type of employee referral bonuses that works for every company and every employee. You need to do your research and find out what works best for your own employees

Looking for more employee referral award ideas?

In this blog post, we presented 4 companies with the best employee referral awards.

Hopefully, they inspired you and helped you come up with great ideas for your own employee referral awards!

Still looking for that perfect employee referral award?
Check out our list of the top 50 employee referral reward ideas!

8 Most Important Employee Referral Statistics

Here is the list of the 8 most important employee referral statistics you should know!

The-ROI-of your-Employee-Referral-Program

What’s all the fuss about employee referral programs?

Employee referral programs have become on of the most popular recruiting strategies for finding qualified candidates.

It has been argued that every company should have an employee referral program.

However, implementing an effective employee referral program is not as easy as posting jobs on job boards.

It takes a significantly greater amount of time and effort.

So is it worth it?

Let’s have a look at the data!

List of the 8 most important employee referral statistics

Here is the list of the 8 most important employee referral statistics:

1. Employee referrals have the highest ROI

  • 82% of employers rated employee referrals above all other sources for generating the best return on investment (ROI). (Source: CareerBuilder)

2. Employee referrals reduce time to hire

  • Referred candidates are 55% faster to hire, compared with employees sourced through career sites. (Source: HR technologist)

3. Employee referrals reduce cost per hire

  • Employee referral programs can save companies $3,000 or more per hire! (Source: Recruiter.com)

4. Employee referrals improve the quality of hire

5. Employee referrals reduce the turnover rate

  • After two years, retention of referred employees is 45% compared to 20% from job boards. (Source: FirstBird)

6. Employee referrals generate more profit

Employees who were hired through referral programs produce 25% more profit for their companies than new hires hired via other sources. (Source: FirstBird)

7. Employee referrals improve offer acceptance rate

Referred candidates are more likely to accept your job offer by a statistically significant 2.6-6.6 percent. (Source: Glassdoor)

8. Employee referrals bonus costs

Does your company have the effective Employee Referral Program?

These statistics build a compelling case for having an employee referral program.

Compared with other recruiting strategies (such as job boards, career sites, etc.), employee referral programs have the highest return on investment (ROI).  

Employee referrals are a great way to improve your time, cost and quality of hire.

If your company still doesn’t have an effective employee referral program, you’re way behind.

But don’t worry, you can get back on track in no time – check out our Guide for setting up an effective employee referral program and start building your own employee referral program today!