Employee referral program delivers more loyal employees cheaper and faster. How to set it up effectively?

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Job seekers show more trust in employees than employers. And that's exactly what the employee referral program is betting on. Based on the principle of mutually beneficial cooperation, it brings new talents into the company who are more loyal. But what shouldn't be missing from a successful employee referral program?

According to a Radancy survey, 67% of companies surveyed use a referral program. Among the companies that plan to implement an employee referral program, 60% plan to do so in the next 6 months.

In the world of statistics, the numbers clearly speak in favour of referral. LinkedIn's survey (The Ultimate List of Hiring Statistics for Hiring Managers, HR Professionals and Recruiters) also points out that successful deployment of a referral program will reduce the hiring process to 29 days, compared to 39 days for portals and 55 days for career sites. You can increase your talent pool by up to ten times. Recommended candidates are 4 times more likely to be hired this way. According to ERIN, 45% of employees recruited through referrals stay with the company for more than 4 years and only 25% of employees recruited through job offers stay for more than 2 years. ERIN also reports that they save more than €7,000 in productivity and sourcing costs per employee hired by referral. By deploying an employee referral program in practice, 75% of companies increase the quality of applicants.


Both quality and quantity

However, there are many more reasons why companies reach for this program. Not only it builds talent pool and lowers recruiting costs, but it also decreases rates of employee’s leaving, strengthens candidate engagement, enhances employer branding and internal mobility and higher applicant and new hire rates. Employee engagement is also stronger because of their possibility of creating a team all together. 


How to set a successful employee referral program?

To set an effective referral program, you need to clearly define the requirements for a specific position, sufficiently inform employees, reward successful referrers adequately (scouts), motivate them appropriately, improve the user experience in the job application process, and don't be afraid to insert individual specifics inherent in each company. 

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  • Clearly specified "coordinates"

What is obvious to the HR-ist may be perceived differently by the employee. Especially if the company is looking for someone to fill a position in a different department. Within the email communication announcing the referral, don't hesitate to include a link with a detailed description and requirements for the specific position. Try to be explicit and open about what you're NOT looking for.

The intuitive app allows you to create modern, unique, and personalised job adverts in line with your employer branding and it also adds a video or some kid of a pre-screening form. This makes it easy for employees to spread the design of their job adverts to different communities with a single click. 


  • Awareness as satisfaction

Employees who recommend the candidates expect to receive up-to-date information about the recruitment process. If this doesn’t happen, their interest and motivation to suggest the next candidate may be greatly diminished. It would be a pity if underestimating such an “easy” activity shattered the effectiveness of the whole project. If possible, keep the Scouts informed at each stage of the selection process and how 'his/her' candidate is doing. If a person is not accepted for the position, send a thank you email. This will make a candidate feel that you take his /her efforts into consideration.


  • A pat on the back is worth more than gold

It is not only monetary reward that brings a sense of satisfaction. Although setting out the payment of rewards for each step in the referral process is a key element of it. Monetary reward goes with the public recognition of successful Scouts hand in hand. If you have a star facilitator on staff with a successful track record of referring candidates, give him or her a proper sense of your appreciation and recognition, perhaps in the form of a public commendation from the CEO so he or she may feel as in the “spotlight”. Whatever form of recognition is close to your company culture, make sure it happens.

It's also worth considering creating a ranking of top scouts based on points collected for sharing open positions and successful referrals. Make sure these stars are visible enough at team meetings, in the internal system locally or globally. A gamified process and rewards system increases interest in ongoing recruitment campaigns.


  • Money or trip?

Trip, motorbike, money, football ticket, voucher, extra holiday? Besides money, what would motivate your employees to engage in a referral program? The universal answer, "surprisingly," doesn't exist. An individual approach that takes into account the company culture is more than appropriate in this case.

Non-monetary rewards usually represent a smaller cost to the company. Even if the financial one is the most effective. You can vary the amount of reward for different activities. Set the highest financial bonus for the most difficult positions to fill and a flat-rate amount for each recommendation. You can vary the amount depending on whether the referred candidate gets an interview or how long he or she remains in the position.


  • Ideally by one click 

A lengthy and complicated referral process can discourage Scouts. Therefore, opt for a simple, intuitive system where a few clicks take care of everything. "Our goal is to provide HR specialists and their colleagues with an effective tool for collaboration when filling open positions. Employee Referral app is a clear system that brings full control over your data and from one place evaluate all activities, including paid rewards," explains Barbora Kulčárová, Nalgoo Product Manager. The application is connected to the recruitment management system, Nalgoo ATS, which allows you to freely choose the positions you include in the referral program and set your conditions for them. "You can also manage bonus management in the system effectively. Employees get access to their environment where they can participate in recruitment campaigns, track candidate progress and also benchmark their level of engagement against others." In case you want to find out more about the app, get in touch with experts.

Reffer by One Click


  • Unique nuances

If you're wondering how you can improve your referral program, ask those who are most affected - your employees. You can then easily transfer the findings of your internal survey to your app. By taking into account the uniqueness of your company culture and the authenticity of your employees, you'll be able to tailor your referral program in your image. Google, for example, relied on a very specific "call to action" to recommend candidates along the lines of, "Who is the best Software Developer you know? By asking precisely targeted question you eliminate the possibility of a scout getting it wrong. The platform for freelancers, Fiverr, has cleverly included elements of gamification in its referral program. By integrating platforms such as Briq and Slack, they have allowed colleagues to brag about each other and award virtual credits. These can then be exchanged for real rewards. For a change, Accenture looked at this from a candidate's perspective. It has added a "Get Recommendation" button to job adverts. This gives candidates the ability to initiate referrals easily.


Author: Adriana Hergott

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