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10 Tips to Get the Best From Your Referral Program

by Nov 5, 2013, 6:21 am ET

You’ve just created your brand new referral program because you recognize the potential locked within all your staff members to generate referrals. Here’s a quick guide to getting the most out of it.

  1. Make some noise about it. Don’t just send out a solitary email. Do something dramatic. Announce the launch and then say that the very first person to provide a successful referral hire made through your new referral tool will win $10,000 or an extra two weeks of holiday. That’s a lot, but you need to grab their attention and make sure they know this is a serious and ongoing program. It’s up to you as to how generous you want to be, but make sure it’s a “blimey moment” so when your staff see the reward offered announcing the launch of the program they go … “Blimey, that’s good.” Grab their attention with a seriously tasty one-off reward for the very first hire.
  2. It has to come from the top. If you can, make sure it’s the head honcho who launches it … the big cheese. If your staff know that it’s the CEO pushing it, the program will carry greater importance in their minds. That introductory email and/or message on your intranet should come from the top.
  3. Publicize the successes. When you make a successful referral hire, publicize it. You can send out a monthly email or entry on your Facebook page or intranet announcing who gave the referral and the reward they got. A nice picture holding their new iPad in the staff magazine is a good starting point. The more success stories people hear about, the more they will want to get involved to win those nice rewards.
  4. Speaking of rewards … Don’t be shy; get the checkbook out and really incentivize your staff. If you’re offering a half day of holiday or $10 gift voucher, then you’re not likely to get many staff members working hard on your behalf to try and find you someone suitable. It’s like a lottery: if you offer enough as the top prize, people will join in. iPads, TVs, three days of holiday, $500 in cash, a flight to London, etc. — the more you offer, the more you’ll get. Consider a multi-reward scheme where if someone successfully refers, say, three people in any two-year period, they get a serious reward on top of the individual rewards for each hire. It’s a bit like earning loyalty points. Once they’ve earned enough, they can cash them in so on the third successful referral, they get an extra week’s holiday on top of the standard referral prize for that third hire. Publicize it! Remember the blimey moment. All of this would still cost you less than the fee of one placement from a staffing agency.
  5. Don’t be afraid to up the reward. If you have sent a job to only a select few staff members asking for referrals and nothing has happened, open it up to everyone. If you’ve sent a job to everyone and you still can’t fill it, send out a reminder email or post onto your intranet and up the reward. A $2,000 bounty is a lot less than you’d pay a staffing agency, so it’s definitely worth being generous to save yourself a much bigger fee.
  6. Consider adding external referrers. There’s nothing to stop you (providing you abide by any relevant tax laws) from adding in external referral suppliers, ex-members of staff, or just about anyone who would be interested in joining your scheme. All you have to do is add their name and they’ll receive your email alerts alongside regular members of staff. Why limit your pool of available referrers to only those currently working for you?
  7. Be selective about which jobs you ask for help with. If every job you ever recruit is sent out to staff members, then it will begin to lose its impact. Focus the employee referral program on hard-to-fill jobs or those with management responsibility and above. If your staff gets an email every week asking for referrals, they will begin to switch off. Once a month is fine with new jobs and tasty rewards. Generally speaking, the more traditional routes to candidates like job boards should work pretty well for lower-level vacancies. You may not need to use a referral program for those type of positions.
  8. Keep the referrer informed. If you can, whoever the applicant was referred by, keep them informed as to how their referral is doing. Just drop them an email … “Great referral. We’ve invited her in for a first interview next week.” If the candidate wasn’t successful, tell the referrer why. The referrer might know someone else who could be more suitable. The more they feel part of the process, the more they will help you again in the future.
  9. Offer rewards for “close but not quite.” You could offer say $500 for a successful hire, but if someone gets a first interview, you could offer $100; a second interview, $200. Consider different rewards depending on how far the applicant gets in the hiring process.
  10. The gift that keeps on giving. Some football teams (that would be soccer to those of you reading from the U.S.) do this. So when a player is sold to another team, the transfer fee contains financial incentives to the selling team if that player does really well. (Extra bonus payments go the selling team in 12 months’ time if the transferred player scores lots of goals.) Do a similar thing for your referral program, so that the referrer will earn $250 for every year the applicant stays with your company. If someone successfully refers four people, they’ll be earning $1,000 every year on top of their salary.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Keith Halperin

    Thanks, Nick. I know of tools that automate and gameify the entire ER process. I think the main problem with ERs is the failure to give internal/contract recruiters credit (toward their required hires), so that at best ERs are neutrally thought of, and at worst thought of as opposed to our interests.

    Cheers,
    Keith “Wants to Work On an EmployeeReferralCon” Halperin

  • http://www.careeref.com Kuising Wang

    These tips focus only on the incentive part. That’s only one factor in the success of the program.

    A communication mismatch between employer/referrer as a group and job seekers as another group is the major issue facing most employee referral programs, regardless of incentive. Lack of access to each other in a straightforward way is the major hurdle. Experiencing that in my own career, I started http://www.careeref.com to fix that for any party still in the suffering. Users can try out the live demo there to see how it fixes their issues.

    Basically with a unique, patent pending approach we integrate the two complementary approaches, i.e., employee referral and online job listing, on a single board at http://www.careeref.com. Careeref allows both HR and individual employees to post jobs on the board then multiple employees can claim referral rights to the posts by attaching their referral qualification information. Job seekers may choose to review attached referral qualification information together with referrers’ referral history and feedback info to engage in further contact with selected referrers to start their referral processes independently. For job postings without referrals attached, job seekers can request referral be added there. This opens up the door of employee referral to the public job seekers, putting them on the same footing as internal movers and referrers’ network candidates. Careeref.com combines the strength of both approaches, i.e., ease of access and vast reach of job board and high efficiency as well as access to hiring managers of employee referral, and cancels out their respective shortcomings, to create a more streamlined recruiting platform with low cost, high efficiency and vast reach that greatly benefits all parties involved.

  • http://www.careeref.com Kuising Wang

    This post is focusing a bit too much on the incentive part which is just one of the factors leading to a successful ER program. A communication mismatch between employer/referrer as a group and job seekers as another group is the major issue facing most employee referral programs, regardless of incentive. Lack of access to each other in a straightforward way is the major hurdle. Experiencing that in my own career, I started http://www.careeref.com to fix that for any party still in the suffering. Users can try out the live demo there to see how it fixes their issues.