The most common mistakes that reduce the success of an employee referral program.

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There are companies that are terrified by the idea of "letting employees to speak". They fear that if they are too visible online in an employee referral program, they may be noticed and approached by other employers. But the truth is that if they are good at their field, it is quite likely that other companies will contact them. It would be a shame if this fear deprives you of the relevant talent that a referral program can bring, as candidates trust employees more than employers.

Employee referral program is based on this above-mentioned fact. 75% of companies surveyed use an employee referral program to increase the quality of candidates. Employees who are recruited in this way are 20% less likely to quit and show 25% more profit. 

There are situations that can cause problems and recruiters cannot use the full potential of the program. These occur mainly when recruiters underestimate the actual creation and day-to-day care of the program. These are some of the most common reasons why referral programs fail.


 1. Respond within 3 days at the latest!

Dr. John Sullivan, who works on the topic of talent management, believes that if you don't respond to a referral from a scout (a scout is an employee who recommends candidates, author's note) or give a referred candidate any feedback within 48-72 hours, they will be discouraged from further activity or even stop referring. In your response, be sure to include why the recommended candidate succeeded or failed.

If you deliver the feedback to the scout or recommended candidate late, you are sending a signal that you, as a company, are not serious about hiring quality employees, that you don't value the effort. Not only does this cast a negative light on your brand, but more importantly, you are depriving yourself of the opportunity to hire a quality employee.


2. If the rewards do not bring value

The hook is is that "valuable" rewards can be imagined very differently by everyone. A skydive, concert tickets, a voucher for a favorite clothing brand - the reward can also take the form of incentive or a public praise from the CEO in front of the whole company. The key here is that it meets the needs of employees and reflects the company culture.

Data from a LinkedIn survey (The Ultimate List of Hiring Statistics for Hiring Managers, HR Professionals and Recruiters) shows that scout awareness, honest feedback and regular recognition are key to the success of a referral program.  83% of Scouts want to be informed about how a candidate is doing in the recruiting process. In fact, only 6% of Scouts recommend employees because of money. 35% do so to help their friends, 32% do so to help their company, and 26% of Scouts are motivated by the fact that they want to be seen as valuable colleagues.


3. Don't resist automation and digitalization 

In the rush of hundreds of CVs and other recruitment tasks, it's easy to lose track of referrals, where prompt feedback is so crucial. With referral management through Nalgoo ATS's smart platform, you get full control of your data and can evaluate all activity, including rewards paid, from one place. Scouts gain access to their environment where they can easily and transparently engage in recruitment campaigns, track candidate progress, and benchmark their engagement levels against others. 

You can also motivate employees effectively through a properly set-up bonus management. Scale the rewards they can earn clearly for a specific activity. Recognize any meaningful effort, from sharing a position on social media to successfully hiring a candidate. Manage bonuses anytime, anywhere right in the app. You can schedule the app to automatically send notifications about available bonuses as soon as a Scout meets the referral reward requirements you set. That way you can't be late or forget about the feedback.


4. Provide access from mobile too

If you manage your referral program via a smart app, you can access it anytime, anywhere, even from your mobile phone. Scouts do the same, making it easier for them to make referrals overall. Since 98% of text messages are read by the recipient within three minutes, it's highly likely that a candidate will respond via text message quickly.

Intuitive design, clear navigation and simple referral forms will ensure that the referral process isn’t off-putting to the employee. 

One such app is Nalgoo's. Thanks to Nalgoo Employee Referral Program your employees can make recommendations from the comfort of their own home, easily and effortlessly.

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5. No fuss, no referrals

For employees to refer candidates, they need to be informed about the program, know how the referral process works, and what steps to take if they want to make a referral. Technically, the whole system should be very intuitive, simple, and timesaving. In practice, an employee should be able to refer a candidate literally with a few clicks. The program needs to be reminded to employees, to motivate employees sufficiently so they get involved. However, practice shows that in many companies, programs are too formal and not used much. Engage creativity in communication, team up with the marketing department in the company and create an approach that literally steals the employee's attention in the rush of work activities. For example, host an informal breakfast where you show them how to use the app, introduce them to the benefits they can get if they join the program, and present it properly.


6. Evaluate the data

Approach the employee referral program as a living organism. Collect key data, analyze it and adapt the program to it. Technology already makes it possible to track user behavior and objectively analyze the data collected. HR department decisions can thus be made based on relevant statistics. Even though employee referrals are the source of quality candidates and have the highest hiring success rate, tracking data in your field can help you improve what is not working 100% and make the processes that are working even better. 

What do companies commonly measure in the program and how do they handle these findings? Employee engagement rates, for example, reveal valuable data about employee engagement. Track how many employees share open positions on social media and how many go to the trouble to specifically promote that position. Are employees from a specific department of the company engaging more than employees from other departments? You can work with the participation rates of employees based on the data collected in this way.

You can also focus on feedback on the individual "tools" of the program. Conduct regular surveys in which respondents rate how easy they find it to use each tool.


Author: Adriana Hergott


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Case Study

HR Director at Arval: Switching from an improvised version of employee referral program to a digitized one has doubled the number of employee referrals for us. Since mobile access increases engagement.

Arval Competence Center Bratislava, the center of expertise providing support to a full-service operating leasing Arval entities mostly around the Europe , initially used an improvised employee referral program based on internal communication. Based on recommendations from colleagues in this industry, they replaced it with a digital centralized platform. Since then, the number of candidates referred from existing employees has doubled and interest in internal employee rotation has increased.

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