How can employee referral help you measure and manage employee engagement?

Although more than 60% of the companies claim to have a documented employee referral program (ERP), no more than 15% of the employees recommended a friend or an acquaintance for an open role within the organization they work for.

When companies don’t get the expected support from their employees to close open roles, it’s worth taking a step back and analyze the causes. Most likely, they’re dealing with one or more of the following problems:

• The employee referral procedure is complicated
• The employee referral procedure is uncommunicated or miscommunicated
• The employees lack the motivation to recommend you as a potential employer.

Auch!

While the first two types of problems are operational and easier to fix, the latter is a real pain and requires in-depth analysis and strategic measures.

Employee engagement can make you or break you

If you think that employee engagement is just a business buzzword, think again after having a look at figures. Engagement is not only about the organizational climate; it has a real impact on how the company performs.

• Companies with a high employee engagement rate have a double annual net income compared with the companies whose employees are mostly disengaged.
• Engaged employees are 87% less likely to leave their companies
• Overall, companies with high employee engagement rate outperform those with low employee engagement rate by 202%.

What drives employee engagement?

A study conducted by Dale Carnegie and MSW Research has shown that taking pride in working for the company is one of the three key drivers of employee engagement, next to the relationship with the supervisor and the belief in senior leadership.

That pretty much explains why people who are neutral or, worse, hostile towards their employer, will never take any initiative in recommending someone else to work for the company.

How can employee referral help companies improve the engagement rate?

The good news is that setting up an employee referral is not only an excellent opportunity to identify how engaged your employees are with the company; it also creates the framework for building a different organizational culture based on trust and involvement, where it’s easy to leverage employees engagement level.

Unfortunately or not, people are not split into two big categories — engaged and disengaged. It gets more complicated than this.

According to Dale Carnegie research, 29% of the employees are engaged, 26% are disengaged and the rest of 45% are somewhere in between, being partially (dis)engaged. Moreover, Dale Carnegie identifies several stages in an employee’s evolution from low to high engagement:

1. The disengaged employee

2. The esteemed employee

3. The involved employee

4. The enthusiastic employee

5. The builder employee

45% of the employees, who are neither engaged nor disengaged, are in one of the three intermediary stages.

A good employee referral strategy is all about bringing people who are in the first four stages to the last one, where they feel involved, valued and enthusiastic enough to become ambassadors of their employer brand and act as team builders.

The best part about employee referral is that it gives companies a chance not only to work around the current employees engagement rate, but also benefit from newcomers with higher engagement level. People hired following a referral have proved to stick around longer than their peers hired through other traditional methods.

Moreover, Gallup research has revealed that having a best friend at work has a positive impact on engagement, productivity, and the company’s profitability. Co-workers who are also best friends are less likely to suffer work safety incidents, and change their job. They are more open to risks that could lead to innovations and overall, they assess their working experience as positive.

Having co-workers who are also friends is possible by pure chance or by pushing things in this direction. A company that encourages its employees to refer people from their personal networks fosters an ecosystem where both referrer and referee are more comfortable at work and engaged.

How to build engagement around your ERP?

After having set up your ERP, the first step is to make sure everyone is aware of its existence. The second step is to be compelling when communicating it to your employees.

1. Use the opportunity to remind employees the one of a kind company/brand/product they’re working for.

Here is what Pepsico has done to persuade their employees to get in the game: it created messages that linked Pepsico commercial brands and products with the benefits of participating in the employee referral program:

2. Acknowledge and reward your employees’ contributions

Digital Ocean, a global technology company, revamped its ERP in 2017 and came up with a scheme that rewards employees at multiple levels: financially, experientially but it also feeds their need to be making a difference.

More precisely they offer to their ERP contributors:

• a $3,500 bonus upon successful hiring of the referee
• next to the reward that goes into the employee’s account, the company ads an $1,500 donation to charity on the employee’s behalf
• If the employee makes an additional donation, he goes into the Annual Golden Ticket Raffle where the big prize is a trip paid by the company
• all ERP contributors are acknowledged and thanked during meetings and in the company’s newsletter.

3. Create buzz and enthusiasm around your ERP

InMobi employees were quite excited when a Vespa scooter was parked in front of their San Francisco office. The scooter was the big prize of the lottery organized by the company for the ERP contributors. It was a constant reminder of the employee referral program in progress, and it generated conversations around it. Just what was needed for the employee referral campaign to attract support.

4. Make your employees feel involved at a personal level.

An intelligent move Google has made in employee referral is the “Give me 5” approach. Instead of sending a mass email asking people to recommend for a specific open role, employees were approached one-by-one and asked successively for five names of “best-ofs” they knew (like “the best sales manager” or “the best Java programmer”). The approach uses a memory stimulation trick called retrieval clue that works wonders, and it was an efficient way to make the referrer feel like their personal contribution makes a significant impact on the company.

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As revealed by a study conducted by Perks — “Aligning Employee Engagement to Employee Referral Programs” — employee engagement and feeling of recognition and reward decrease along an ERP life-cycle, reaching its peak in the initial phase of the application submission and its minimum level when the referred candidate will have finished the trial period.

Source: Aligning Employee Engagement to Employee Referral Programs, Perks

Whether disengagement will happen or not in each case, when, at what pace it will grow deeper, all these depend on the mix of incentives, communication, ERP structure and the effectiveness of the tools used.

Talentspotting is an employee referral tool with in-built communication features (like notifications, statuses, options to manage gamification campaigns). It enables full visibility on applications’ status and automated social sharing of the open jobs. Contact us to discuss on how our referral technology can help you increase and manage your employees’ engagement throughout and ERP entire lifecycle.