Companies track revenues, costs, profit and a number of key performance metrics. With more companies embracing the business value of employee engagement, the need to measure and monitor engagement as a key performance metric becomes critical for measuring success and improving results.

1. RAISING YOUR EMPLOYEE
REFERRAL PROGRAM RESULTS
TO 50% OF ALL HIRES
“50% is the new ERP target”
© Dr John Sullivan
1
www.drjohnsullivan.com

2. 2
4 Action Steps to Kick Start an
Employee Referral Program

3. Strategic action #1
Prioritize and focus your ERP effort

4. Strategic action #1
Focus ERP efforts on high priority jobs including:
Mission critical jobs and business units
Revenue generating jobs
Jobs with a high previous referral success rate
Hard to fill jobs
“Sudden” key vacancies
Tip – begin with a shortlist of targeted jobs and
then add positions

5. Prioritize the employee
with the closest relationship
Accolo uses a referral community
 For every open job, it selects a few employees
based on the likelihood that they will know the
right person
 As a result, Accolo has averaged 8 referrals for
every job (#1)

6. Be careful
Homer will refer
people also

7. Prioritize your employees
Focus on referrals from top performing employees
Why? Because referral hires from top performers…
produce nearly 3 times more profit… compared…
to a referral hire from a below average performer
Seek out and prioritize referrals from top
performers
But also… warn, restrict or ban employees that
routinely make weak referrals
Source: “The Value of Hiring through Referrals” (source: UC Berkeley by Burksy, Cowgillz, Holman and Housman
http://faculty.haas.berkeley.edu/bo_cowgill/papers/Referrals.pdf)

8. Strategic action #2
Do not overemphasize monetary rewards

9. Strategic action #2
Use “help the team" motivation (not $)
The most effective referral motivation approach
emphasizes the opportunity to work alongside
great people… because the team wins more
frequently… when it has the best players

10. Strategic action #2
You can build a “help the team” mentality… by
emphasizing these benefits to employees
Higher quality hires will improve business results
and thus raise employee stock value and bonuses
It’s part of the responsibility of being a team player
You will be recognized for “helping the team”
You will learn more from higher-quality new hires
You won’t have to work alongside slackers
Note: A feedback loop is required to tell employees
whether they made a “junk” or a “star” referral
Also show them the correlation between improved
business results and a higher % of ERP hires

11. 2 examples… referrals don’t require $ bonuses
 Reached and maintained a +70% referral rate
with no $ rewards
 Edward Jones reached 55% with no bonus

12. Strategic action #3
Be proactive in seeking out referrals

13. Strategic action #3
Why you need to be proactive?
“Great people know great people”, however most
employees are extremely busy…
so to maximize your referrals… you will need to
proactively approach your top referring
employees
Here are 3 proactive ERP tools to consider

14. “Proactive” referral tools
A) Give me 5 – Proactively approach top employees
Ask them to identify and then contact the…
 Best manager they ever had
 Best team leader
 Best idea person or innovator
 Best person that "runs into" burning buildings
 Best problem solver
 Best sales person that beats you
 Best student in college that was so smart
 Best mentor
 Best technical skilled person
 Best international talent
 Best customer service person

15. “Proactive” tools
B) Reach out to job references for referrals
 Identify top performing hires from last year
 Call their references that said accurate things
 Thank them
 Ask them “Do you know anyone else as good?”
 Ask them to be a future reference source

16. “Proactive” tools
C) “Most wanted list” for relationship building
 Executives identify… a list of gamechangers
and potential “magnet hires” at the beginning of
the year
 Employees are asked to seek out these highly
desirable individuals and to build a relationship
with them over social media (Relationship recruiting)
 When they eventually agreed to consider becoming
a referral… speed hiring is required

17. Strategic action #4
Broaden the program
and expand it’s eligibility

18. Strategic action #4
Broaden the program
Add on-boarding referrals – proactively ask new
hires for referrals during on-boarding (Eli Lily)
Add college referrals – the college population is
well connected through social networks, so add a
referral sub-program for college hires and interns
(Endeca, Intuit)
Add referrals for executive positions – advanced
ERP’s also cover openings for executive positions
Focus on boomerangs – encourage your
employees to target your best corporate alumni
(also allow them to make referrals)

19. Strategic action #4
Broaden the program
 Add internal movement referrals - have a
referral program that is designed to encourage
internal movement. The best practice firm Booz
Allen has a “Career mobility” team (Also MS,
Cisco)

20. Expand program eligibility
Expand eligibility
Executives are encouraged to refer - a “white
glove treatment” recruiter can be assigned to
encourage executives to make referrals (Deloitte)
Managers and HR are made eligible – managers
and those in HR are also well connected, so they
should be eligible to make referrals (Accenture)
Note: you can help minimize conflicts of interest by
offering the option of contributing any ERP reward to
charity.

21. Expand eligibility
Expand eligibility to non-employees
Open up referrals to non-employees including
Family
Contingent workers
Consultants and vendors
Customers
Board members
Corporate alumni
(Internosis, Clearlink, CACI, Verinon)