Setting up an employee referral program for small to medium sized companies
Introduction• Average employee referral programs deliver about 20% of all new hires.• Great employee referral programs deliver over 50% of all new hires.• Your employees are already connected to many of the people you want to hire.• People want to help. They just need some guidance.
1 Define goals• Identify the roles you want to fill using referrals.• Define how many new hires through referrals you aim to achieve and in what time frame.• Convince your CEO/CFO of the benefits.
2 Define rewards• Will you give employees a reward when candidates are brought to interview or only when they are hired?• Sample rewards for getting a candidate to interview stage motivates staff and can be a token such as gift cards, movie tickets etc.• It’s best to pay rewards immediately. Skip the long wait. It’s a huge disincentive.
What reward?• The best rewards to offer depend on your company.• Sometimes it’s recognition.• Sometimes it’s a charitable donation.• Often it’s plain old fashioned cash.• Rewards for hiring a professional are usually in the region of $600 to $2000.• Experiment to see what works best for your network.
3 Define your message• Referrals help employees bring people they like into the company.• Referrals are a great way to reach people who are not actively looking for work.• Referrals are usually a better culture fit, stay longer and get productive faster.• Referral programs help the company hire the right people to get the projects done.
4 Select champions• Identify well connected employees – Who has 500+ LinkedIn connections? – Who’s active on Twitter? – Who’s likely to have a lot of friends in Facebook?• Talk to these employees. Tell them about your plan. Get their buy in.• Roll out a pilot with these pioneers.• They will encourage others to follow.
Abandon Prejudice• You will likely get results you didn’t foresee.• We’ve seen referral programs deliver 90% of candidates from employees simply adding names into Zartis.• We’ve seen programs deliver the majority of candidates from Facebook.• We’ve seen programs deliver the majority of candidates from Twitter (our own, in fact).
All referrals are not created equal• Social referrals can mean any of the following: – An employee adds a person’s details into Zartis. – An employee invites a specific person to apply for a role via email or LinkedIn and the person applies. – An employee posts a public message to LinkedIn, Facebook or Twitter that anybody can see and anybody can apply from.
5 Follow Up Fast• Zartis flags all candidates that are referrals and shows who referred them.• Follow up with them within one working day.• Provide feedback to your referring employees.• Not following up or failing to provide feedback will destroy any referral program.
6 Final thoughts• You absolutely need CEO buy in and get them to communicate the importance of referrals to all staff.• Change rewards to keep it fresh.• Random prizes work, e.g. iPad for first employee that refers a person that’s hired.• People naturally want to help. Set them up for success.
Why employee referrals are best• Reach people not actively looking for work• Better culture fit• Lower attrition/higher retention• Up to 75% cheaper than agency fees• Average referral programs deliver 20% of new hires• Best practice programs deliver over 50%• Zartis helps “move the referral needle”
The business case• Low initial investment• High potential ROI• Proven high success rate/low risk• Short implementation cycle• Clear accountability measures• Creates competitive advantage• Impact on corporate performance