What You Should Know about Setting Up An Employee Referral Program

Finding top talent when filling major positions at your company is obviously essential to your success. Fortunately, there are many ways to find job candidates. On the one hand, this theoretically gives you access to a wide range of recruitment strategies. On the other, with so many channels out there, it can become easy to overlook strong options.

One way you can navigate this issue is to enlist the services of an executive recruiting firm if leadership experience is critical. By coordinating with these executive recruiting firms, you’ll have experts on your side who are capable of handling some of the more challenging aspects of acquiring new talent.

However, you might also need help in filling lower-level positions. While an executive recruiting firm can help you in finding candidates for higher-level roles, you might not require their services. That’s why it’s a good idea to develop an employee referral program. Your current team might know people who are an ideal fit for an open position.

If you’re thinking about developing such a program, keep the following tips in mind to facilitate a successful execution:

Incentivize your employees.

Referring someone is not something that all employees will do without being prompted. For some, it’s an additional step that is unnecessary to complete their duties. Therefore, if you want your staff to provide you with referrals, it helps to give them a reason to do so.

Obviously, monetary compensation can serve as a powerful motivator. You might also consider offering perks that your employees likely want already, such as the opportunity to take extra time off. You might need to experiment with different incentives to identify those which most effectively serve to encourage your workforce. However, taking the time to find the right ones will pay off in the long run.

Set specific goals and objectives.

While increasing employee referrals is the central goal of your program, factoring in your company’s specific needs in regards to new talent can improve their effectiveness. For instance, do you have openings for various positions, or is the need to find suitable candidates for certain roles your most pressing challenge? You can also consider the traits and qualities that you would prefer in potential new hires.

Moreover, it’s wise to establish measurable objectives. This might include boosting workforce engagement by a particular amount within a specific period or increasing the number of high-quality applicants by a certain percentage. In addition, it could include determining target ranges for turnover and cost-per-hire reductions.

Regardless of your decision, it’s crucial to track the results of your employee referral program and its progress in achieving these goals. Consider using quantitative employee referral metrics such as the participation rate and referral-to-hire ratio in your evaluations, as well as qualitative ones such as candidate and hiring manager satisfaction.

Establish clear guidelines.

Even if you make a detailed plan for establishing a referral program, it’s possible that it will not run smoothly right away. For instance, there will likely be cases in which employees refer candidates who fail to meet your expectations.

As a result, policies for how and when participants can make referrals are essential. For an employee referral program to work, it’s important to not only establish clear guidelines, but to thoroughly communicate them, as well. You don’t want your staff to provide you with non-stop referrals because they didn’t understand that’s not something you need from them. Moreover, it helps your workforce understand what they can do to make the best referrals.

One way to ensure that your staff stays informed is to create and distribute an official policy related to the employee referral program that details all the rules.

Treat it like a client project.

The process of setting up an effective employee referral program shouldn’t be viewed as a casual endeavor. You’re not likely to achieve your goals if you treat this as a minor side project that doesn’t need to be taken seriously.

Instead, devise a plan for implementing the program in the same way that you would develop a strategy for completing a client project. Next, identify what resources are necessary to launch the program. This will involve determining which staff members will coordinate it, how much time it will take to set up the program, and what the available budget is.

Keep the referring employee in the loop.

It’s a good idea to let the referring employee know about the candidate’s status throughout the hiring process. If they don’t know that you’re following through with the referral they’ve provided, they might assume that you ignored them. They’re unlikely to make additional referrals later on if this occurs. Keeping your employees in the loop might encourage them to participate in the referral program to an even greater degree.

Of course, it’s important to remember that employee referrals shouldn’t be your only means of finding strong candidates. It’s simply a tactic worth considering if you want to improve your recruiting strategies.