Employee Referral Program – do you have one?

handshakeSince 75% or more of all jobs are filled by personal networking, including that initiated by employees and that initiated by job seekers, employee referral programs are essential for your recruiting.
Studies have shown that employee referrals are the primary source of hiring volume, the best quality, fastest, best retention after both the first and second year. They are only 6% of applicants but between 28% and 40% of hires (46% at top performing companies). AND studies have shown that it is also the most productive source for diversity hires. A good ER program also increases your employee engagement and, thus, strengthens the company overall.
Do you have an employee referral program? Your employees are a part of the hiring team, whether you recognize it or not. Every time your employee goes on a social site and is known to work for you, your employee brand is affected. Your best people are your best advertisements for the goodness of working for you.
What is the reward or recognition you give your employees who do refer good applicants? Is it financial or a more public recognition? Public recognition, also called social proof or recommendations, is at least as important as a financial reward. And future public thanks for being the one responsible for bringing in the person that just solved the problem/discovered the solution/etc. will go a long way toward retention.
How can you make it easy for your employees to be good referral sources? Do you have a good career page that shows (with video, audio, photos, quotes) what it is like to work for you? Do your employees have that link easily available? Do they have a template of an email that they can just customize and send to a friend with the right skills for the current need? Is the link to the career page in it?
Do you know who your employees are LinkedIn with? Can you send them a list of appropriate people for your current opening so that they can send that email? Don’t make them do the work – they are already giving so much to the company. Making it something to do outside of office hours won’t work.
Do you know of Dr. John Sullivan? He blogs regularly on ERE.net – the Electronic Recruiting Exchange and is a thought leader in the area of employee referral programs and other internal recruiting topics. You can find many of them here
Here are some of the features that Dr. Sullivan recommends in a great employee referral program. These are based on very large technology companies and some are completely beyond the reach of small startups and pre-IPO companies. Which ones do you have in place and which ones look like they might be manageable by your team? Would a consultant be useful? Or just letting your team know that you want and value referrals?
I. Strategic features
    a. Prioritize your jobs
    b. Link social media & mobile efforts with the ERP
    c. Link employer branding with the ERP
    d. Prioritize your employee’s referrals based on their past success
    e. Global referral capability is now essential
II. Features that improve referral program quality
    a. Create a targeted pool of likely connected referrers
    b. Diversity must be emphasized
    c. Provide referral cards
    d. Proactively approach employees formerly employed at “target firms”
    e. Referral events
    f. Allow managers and HR to refer
    g. Expand eligibility to include non-employees
h. Hold smart phone/social media/rolodex events
i. Search the “visible” competition
III. Features that help sell the organization
    a. Educate employees on how/where to find prospects
    b. Provide a story inventory
    c. Provide videos of the team
    d. Guarantee an interview to top prospects
    e. Develop a powerful slogan
    f. Offer a friends program
    g. Improve your job descriptions
IV. Features that improve the effectiveness of rewards
    a. Do-it-for-the-team should be the primary motivator
    b. Offer a charity donation option
    c. Offer prize drawings and non-cash rewards
    d. Settle for names only
    e. Periodically adjust your bonus amounts
    f. Offer a “hard to hire” bonus supplement
    g. Gross up your bonuses
    h. Supplement the bonus based on performance
i. Reward employees for referring top prospects who are not hired
    j. A handwritten thank-you note
    k. Consider a “prize patrol” approach to celebrate referrals
    l. Offer small rewards for “first-time” referrals
    m. Offer small rewards to your applicants
    n. Stunning bonuses can get everyone’s attention
V. Features that drive program responsiveness
    a. Rapid response to a referral is critical
    b. Expedited interviewing
    c. Referrals must be tagged and the processing expedited
    d. “On the spot” screening
VI. Program communication features
    a. Personalize and target your communications
    b. Provide periodic employee notifications after a referral is made
    c. Provide periodic feedback to applicants
    d. Offer an online chat feature with employees
    e. Develop and use referral champions
    f. Consider a follow-up meeting after a great referral
    g. Provide direct feedback to employees on weak referrals
    h. Keep top referral rejects interested
i. 24/7 help desk
VII. Features that extend the reach of the ERP — i.e. special programs
    a. Proactively approaching target employees
    b. Boomerang referrals
    c. Reference referrals
    d. College hire referrals
e. Onboarding referrals
    f. Referrals for executive positions
    g. Internal movement referrals
    h. Offer letter referrals
VIII. Technology features
    a. Allow employees to submit using multiple platforms
    b. Application website flexibility
    c. A website that allows employees to track the progress of their referrals
    d. Offer referral program kiosks
    e. Online assessment tools
    f. Online interview scheduling
IX. Process management features
    a. Proactively discourage weak referrals
    b. Establish referral targets for managers
    c. Encourage internal competition
    d. Continually monitor referral vendors
    e. You need dedicated program staff and recruiters
    f. Develop an SLA
    g. Develop a best practice sharing process
    h. Monitor progress and continually improve using metrics
These are from Dr. John Sullivan’s writings in ERE.net here and here. Please do see these articles for more depth.

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