6- Step Guide to Building the Perfect Employee Referral Program

An employee referral program (ERP), is an internal recruitment method in which a company’s employees recommend or refer job candidates based on the employees’ personal, social and business connections. Employees who provide social referrals are typically given a bonus if their referred candidates get hired. Recruiting from your existing workforce helps in streamlining the hiring and recruiting process and helps produce highly qualified job candidates.

According to Jobvite research, “one in seven referrals result in a hire compared to one in 100 general applicants.” This efficiency highlights why it’s time to start your own referral program. Here are essentials to get yours up and running:

1. Determine the Goal

Having a clear goal, as to what you want to achieve is of utmost importance. It is not only just about hiring more candidates through employee referrals, it is about having a clear vision about what you want to achieve.

Once your team has agreed to the broader goal, it’s time to get more specific. For example, maybe right now 10 percent of your finance hires are referred candidates, and the goal is to get that up to 25 percent.

2. Set up a Budget

Once you have determined the goal, it is time for you to set a budget. This is obvious because employee referrals are going to cost your organization to a certain extent. Discuss things clearly with your finance team and determine how much you can pay your existing employee for each successful hiring through referral programs and which hires have the highest priority, i.e., engineers or sales persons.

3. Create a User-Friendly Process

Your goal for employee referral program is set, now the next step is actually creating it. Here it is advised that you keep it as simple as possible. The less work an employee has to do to refer a candidate, the more successful the program will be. The best-case scenario is that an employee just has to provide the recruiting team with a name and some way to contact the referred candidate, and the recruiting team takes over from there.

4. Train Your Workforce

The employee referral program has been set up and is ready to be used now. But, you have to train up your employees as to how to make the most of it. Train your employees, how to use the referral system and ensure that the training covers three major aspects — how to use the system, what the company is exactly looking for in the new candidates and what should employees expect when they refer candidates.

5. Keep Employees Engaged

Once you build your program and trained your workforce how to use it, it’s time to put on your marketing hat and keep employees abreast of the open positions out there. This can happen by sending emails to employees about job vacancies within the company or mentioning about the same during meetings.

6. Recognition and Measurement

Your employee referral program is set up and in house employees have started recommending candidates. Now, it’s time to share those kudos with the employees who are referring candidates. Do not forget to recognize these candidates who make efforts in hiring. Recognition can be both in the form of cash bonus or in kinds. No matter what you do, but doing something is very important in order to keep up the encouragement of your employees.

On a last note, do not forget to measure your efforts made while organizing the social referral program. The most common and most obvious statistic to measure is the percentage of new hires who were referred by an employee. There’s no specific number to shoot for, just whatever the goal is that makes sense for your company. But it is necessary.

Researches reveal that employee referral is probably one of the effective ways of hiring potential candidates. By following the above-mentioned guide, any employer will be able to ensure that they make the best possible hires.

Author Bio: A professional writer and a passionate blogger, Sampurna loves creativity and challenges. She enjoys her association with new media as a digital media professional and has written extensively on jobs and careers, HR tips and the recruitment industry. She is also a travel enthusiast.

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.