4 Steal-Worthy Secrets of Top Employee Referral Programs

January 13, 2016

A great employee referral program is to recruiters what a family member willing to babysit the kids is to parents: it just makes life easier.

Instead of your recruiting team having to go out and recruit someone great for each and every role, your entire workforce helps out and brings great talent to your doorstep. And, on top of that, studies show referred hires often stay around longer and perform better than hires sourced by almost any other method.

In that vein, in our new ebook we analyzed seven top-of-the-line employee referral programs at seven diverse companies to learn how they do what they do. Our goal was simple: find some actionable tips any recruiting team can implement tomorrow to improve their own organization’s referral program.

Frankly, we succeeded, uncovering an abundance of lessons on how to build a great employee referral program. Four that jumped out where:

1. The size of the employee referral bonus doesn’t matter too much

One thing we uncovered in our analysis was that there was little correlation between the size of the referral bonus and the amount of referrals. In fact, GoDaddy actually cut the size of its referral bonus by 2/3 – from $3,000 to $1,000 ­– and wound up drastically increasing the amount of employee referrals it got.

Company after company we interviewed said the same thing: people don’t refer because of the size of the referral bonus. People generally refer because they like the company they work for and they want other people to join.

2. The easier it is to refer a candidate, the better

Here’s another trend we saw across all seven companies we interviewed: they all sought to make it as easy as possible to refer.

Consider what Booking.com, a European-based company where you can reserve accommodations online, is doing. Obviously an employee there can just email a recruiter or talk to a recruiter and refer a friend. But they also have technology where if an employee posts a job on social media and someone in their network clicks through and applies, the employee will get credit for that as well.

3. The most important factor to getting more employee referrals is marketing your employee referral program

Here was one of the biggest takeaways we found. A lot of employees don’t refer people simply because they don’t know what jobs are open at thier organization and referring just isn’t top-of-mind to them. The seven companies we interviewed all found unique ways to market their open positions and employee referral program, so it would remain top-of-mind within their workforce.

Take Enterprise Rent-A-Car, for example. They actually post a leaderboard internally of what regions are referring the most candidates, which creates a fun and effective competition between branches and leads to more referred candidates.

4. Ultimately, the goal should be to ingrain referrals into your company’s culture

The real goal of a great employee referral program should be to get rid of the idea that recruiting is just the job of your recruiters. Instead, the goal should be to imbed the idea that recruiting is everyone’s job, which manifests itself through employee referrals.

Take Privilege Underwriters Reciprocal Exchange (PURE), for example, an insurance company based out of New York. Their CEO, Ross Buchmueller, preaches the importance of referring to all of his employees every chance he gets. And that pays off: 40 to 60 percent of all hires at the company are sourced via employee referral.

Tying it all together

As a recruiting team, you are doing your company a disservice if you aren’t making the most out of your employee referral program. As long as being a great source of high-quality talent, it also is one of the cheapest and fastest ways to hire.

These are just four of the lessons we learned analyzing seven top-of-the-line referral programs. To discover more, including the best way to structure a referral program and some truly innovative tactics some companies used, download our free referrals ebook.

* image by Death to Stock Photo

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