How to create an effective employee referral program

How to create an effective employee referral program

An employee referral program is one of the best ways to ensure you attract top talent for new positions. This can introduce you to candidates who have been vetted and endorsed by your current employees, which may give you a better chance of interviewing people you can trust to do a great job. These programs also provide ways to reward your employees for their efforts, which can boost morale and create a tighter community within your workplace. Here's more information about employee referral programs, including steps for creating one and tips for ensuring its success.

What is an employee referral program?

An employee referral program is a method for recruiting that rewards current employees for referring candidates to open jobs within their workplace. There are various ways to implement a referral program, such as offering cash incentives or providing prizes, such as time off, to employees who refer the most candidates who turn into new hires. Regardless of the rewards you use, employee referral programs are an effective way to show appreciation to current employees and emphasize your trust in them while creating a more focused talent pool to choose from when hiring.

There are many recognized benefits to using employee referral programs. One of the most important is the quality of candidates they attract. Since these programs enable employees to refer people they know to the company, there's often a higher chance of finding high-quality talent that is committed to the job. This is because an employee will likely only refer candidates they know will fit in at the company well, as this can also show their commitment to the organization's success.

How to create an employee referral program

Here are a few referral program ideas you can use to start your own: 

Outline your goals for the program

The first step in creating a great employee referral program is to determine the goals you want to reach with it. For example, you could increase employee retention for new hires, enhance employee morale, or improve the quality of candidates you attract. Whichever your goals are, outlining them clearly can guide you when determining the process you'll use to roll out your program. For example, you could write out your goals or use an online program to collaborate with coworkers and brainstorm ideas.

Create a detailed process

Once you know the goal you're trying to accomplish, you can develop the process you'll use. It's important to be detailed when outlining the steps for this process, as this will make it easier to implement across the organization. Most referral programs are more efficient when they're simple and easy to use, so ensure your process isn't complicated. For instance, consider creating a basic online form that employees can share with the people they refer or establishing an email account specifically for the referral program entries to keep everything in the same place. 

You can also look to other companies that use employee referral programs for inspiration. For example, you could review an employee referral program template for an organization that uses one to get ideas about which processes are most effective.

Identify rewards you plan to offer

One of the most important aspects of a successful employee referral program is the reward. These programs should offer incentives to employees that encourage them to refer people they know, so identify rewards that employees actually want. One of the most common rewards companies use in referral programs is cash, such as a bonus for every referral that turns into a new hire. However, there are many other rewards that employees will also find valuable. For example, you might offer additional paid time off or gift cards to local establishments.

Establish methods for ongoing referrals

When it's time to launch your employee referral program, ensure there are ongoing ways to attract referrals. This is because programs with rolling opportunities often see a higher volume of referrals, giving companies a wider pool of candidates. For instance, it's beneficial to always accept referrals, even when your company isn't hiring, as this can ensure you have a pool of qualified and interested people ready for when a position opens. 

You may also create avenues for ongoing communication with referrals and referees, as this can ensure you don't miss out on candidates who aren't sure whether you're hiring. By frequently updating people about which jobs are open and being transparent about which types of candidates you're looking for, you can increase the chances of someone referring the perfect candidate through your program. This can also help set your new hires up for success, as they'll know they can communicate with you openly.

"An employee referral program is a method for recruiting that rewards current employees for referring candidates to open jobs within their workplace."

Tips for running an effective employee referral program

Here are a few employee referral program best practices that you can follow to help yours succeed: 

Promote your program

One of the key aspects of ensuring an employee referral program succeeds is promoting it. This means ensuring everyone in an organization knows about the program, which can encourage more people to participate. When promoting one of these programs, you can highlight the potential for reward for current employees, as this may increase their interest and cause them to refer candidates. You can also promote your program outside of your organization, such as on social media or through marketing materials, to ensure that potential candidates are aware of the perks you provide.

Track and celebrate successes

Since employee referral programs aim to find the best candidates to add to a workplace, you can treat every hire that results from the program as a success. Make announcements when you make a new hire through your referral program, allowing everyone to welcome the new employee and invite them into the workplace camaraderie. You can also celebrate the success of employees who refer candidates, such as offering shout-outs to employees who refer the most new hires.

Boost enthusiasm in the workplace

As employee referral programs depend on participation from current employees to succeed, it's key to create enthusiasm around them. This can invite more people to get involved with the program by highlighting the benefits across the workplace. 

For example, you might publicly post the rewards you offer to highlight the successes of employees who make referrals that turn into new hires. This can show other employees the rewards they can achieve and may create excitement around the program. You may also give bonuses to people hired through referral programs, such as a 90-day bonus, to enhance retention and celebrate the hires and the people who referred them.

An employee referral program can be a great way to find job candidates while rewarding your current employees for their hard work. These are a few ways to implement an employee referral program at your own workplace. If you're unsure of how to get started, you can reach out to your supervisor or your human resources department to share your employee referral program ideas and to discuss how to get one going at your workplace.

More tips about employee referrals:

Interested in why employee referral programs work? Learn about the benefits of employee referral programs.

To ensure you use the right avenues to promote your referral program, read about how candidates are searching for jobs.

Looking to expand your reach for referrals? Learn about how to increase applications.

If you want to use updated tech in your referral program read about recruiting candidates on mobile devices.

Applying for jobs yourself? Learn about how to reinforce your resume with referrals.

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