3 Tips for Creating an Employee Referral Program

17 May 2021

Using job boards for recruitment is a common strategy, but it can be frustrating when you receive dozens of unqualified applicants. No one wants to spend time reviewing resumes only to come up empty-handed. After all, successful recruitment is about quality, not quantity.

If you plan to hire in the coming weeks or months, it could be the perfect time to create (or revamp) an employee referral program. An employee referral program provides a structured, organized way for current employees to recommend people in their network to open positions within your company. An employee referral program is not only an excellent source of candidates who you might not otherwise find, but it can save you up to $7,500 per hire in recruitment costs.

Creating an Employee Referral Program

  1. Employee referral programs are an excellent source of pre-vetted candidates and can help you save you time and money in the recruitment process. To get the most out of your employee referral program, make sure you incorporate these three things:
    Define the job requirements: When you ask employees for referrals, make sure to provide more than the job description. Employees who are referring people in their network to jobs within different functions or departments may not understand the nuances of the role. It’s a great idea to summarize the role description and highlight what you are looking for in an ideal candidate as well as what you’re NOT looking for.
  2. Try a variety of incentives: Money isn’t always the best incentive for employee referrals. Large monetary incentives in particular may encourage employees to make referrals that aren’t necessarily a good fit for the role or company. Non-monetary incentives like paid time off, gift certificates, or event tickets can generate referrals and may also help create more excitement around the referral program. If you want to use money as a referral, it’s a good idea to give more for harder to fill positions and structure the payout to reward retention. For example, giving the employee half of the bonus when the hire is made and half when the new hire reaches their 6-month anniversary.
  3. Keep employees informed: When an employee refers a candidate, they expect feedback. If you don’t keep employees updated on the progress of their referral, they may be more reluctant to make future referrals. Be sure to thank employees for their referrals, regardless of whether or not they are hired, and communicate with them as the candidate moves through the hiring process (or doesn’t).

Particularly if you’re operating in a competitive talent market, employee referrals can be an essential part of your recruitment strategy. Equip your employees with the information and incentives they need to make quality referrals and keep your candidate pipeline full.

Sincron HR Software

Using the Sincron HR platform HR managers can implement and track the success of employee referral programs and their associated costs. In addition:

      • Sincron HR configures the ATS (recruitment module) to ensure the ROI for organizations tracks expected/realized outcomes
      • The new HR Essentials platform is now available for just $2/month per employee
      • Training and tech support (call, text, video library, etc.) is included

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