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Employee Referral Program. Everything You Need to Know to Make It Effective

Recruiters are increasingly struggling to fill vacancies in enterprises. Recruitment processes require a lot of work, and the waiting time for the application of a candidate who meets the employer’s requirements is often longer. What if you looked at the whole process from a different angle? If we took advantage of the fact that our organization already employs qualified people who surround themselves with similar specialists, e.g. on their profiles in professional social media? Have you ever wondered what effects you can achieve by asking them for help in hiring new employees? The Glassdoor report shows that about 70% of referral recruitment results in employment. Moreover, it is an excellent method of building a database of candidates who are qualitatively at a high level.

If your company does not have an employee referral yet, consider whether it is worth introducing it. If you have already taken the first steps in this direction, but it’s not working well, think about how you can structure the process. With the help of an employee referral program, you have a chance to gain a valuable source of applications. It all can have a multidimensional impact on building a unique atmosphere and organizational culture.

How to implement the referral program step by step?

The effectiveness of the employee program depends primarily on the involvement of employees. If it is to work effectively, it is necessary to really satisfy employees and their faith in the effectiveness of the program. Only a satisfied employee will act as a brand ambassador outside the organization. At the same time, it is the employee who is the most reliable source of information for potential candidates, whom he or she can encourage to apply for your company’s job offers.

Therefore, in the first place, it is worth looking at the atmosphere in the organization and taking care of the well-being of employees. Employer branding activities that take into account the well-being of employees will help you with this. The next step will be to plan the program and determine the rules for its operation. Effective communication will play a major role in the program. Finally, do not forget to systematically verify the effects.

Step 1. Prepare a draft of the candidate referral program.

Before you can implement a program, you must first define it. Write down the most important rules for recommending candidates for work. Take care of the legible form of the document and a comprehensible description of the next steps defining the framework of the program, the maximum number of candidates recommended by one employee and the rules for awarding prizes. When creating a program, take care of several important elements:

  • Specify the expected effect – At what point will the employee receive the reward for recommending the candidate? As a result, do you decide it’s the moment they send CV to the database, pass the first stages of the recruitment process, or when the candidate is accepted for a job? Or maybe the award will be granted only after the new employee has completed the trial period or will it be paid after each subsequent stage? Remember to clearly indicate what effect you expect from the program.
  • Explain how referrals are collected – How should recommenders submit candidates for the program? Clearly outline the path that the referrer and candidate must go through to qualify for the referral program. Try to shorten the whole process as much as possible. Perhaps a good solution will be a short form to be completed by the recommender or the use of the ATS system. The less effort a candidate has to put into the application, the better their experience will be.
  • Consider different possibilities – It may happen that one person recommends many candidates. Another option is to recommend one candidate by several different employees. Try to anticipate potential problems and specify in the terms of the program how to proceed and reward in each possible case.

Step 2. Plan communication of a program.

Communication should be planned in the long term, specifying the channels to reach employees in advance. When starting a referral program, remember to clearly communicate the rules of its operation. In addition, systematically inform them about current recruitments.

In the case of one-off actions, remember to present the requirements of the position for which you are looking for candidates. Describe the required experience and qualifications and provide employees with valuable information to pass on to their contacts, e.g. a description of the organizational culture, benefits offered and development opportunities in the company.

For communication, you can use e-mail contact or messages on channels addressed to employees, such as the Intranet or platforms where they have access to current job offers. Social media and promotional campaigns, e.g. in the form of posters posted in the corridors in the office building, can also help.

Remember to stay in touch with people who recommend employees. Take care of feedback for employees who gave you a recommendation, starting from information about receiving a recommendation, through announcements of the next stages of recruitment in which the recommended candidate participates, to the decision regarding employment. The recommending employee will surely appreciate that you include them in your communication about the recommended friend.

Step 3. Think about the reward.

As for the costs associated with the prize, it is worth remembering that they are actually a very good investment. According to Sharehire, referral programs can reduce recruitment costs by as much as 70%.

Employees who use the referral program and do it effectively should be properly rewarded for it. In the IT industry, referrals start at 3 000 PLN and reach up to 15 000 PLN on average.

Yet another method, used by Google, is that referral employees go through a slightly different recruitment process, usually consisting of fewer stages.

You can also check what referral program we offer as Next Technology Professionals.

Step 4. Analyze the effectiveness of the program

In order to check whether the referral system works properly and provides the right candidates for work, it must be analyzed on an ongoing basis.

Check the number of people recommended against the number of people hired by referral. Verify the quality of submitted CVs. Consider whether candidates are properly matched to the published offer. If not, it may be time to modify the communication strategy and specify the requirements for a given position.

Also, analyze the development path of employees who applied to the company in this way. Research how long they stay with the company and how they perform in their positions. Check for which job positions the program works better and is worth continuing. It may turn out that it is not worth recruiting for some positions using the publication of an advertisement outside, because referral system ensure the best candidates.

If the program does not work at all, verify its design and examine the mood of employees. The reason may be low morale in teams and the lack of willingness to promote work in the company among friends.

The summary

Employee referrals give us a chance to add very valuable candidates to our database. It often happens that reaching them through a different path is very difficult. What’s more, it is an area that can have a positive impact on the Candidate Experience and the image of the employer.

Do you want to conduct effective recruitment processes? As an IT recruitment agency, we are happy to share our experience and knowledge and help you find the most suitable IT specialists.