In life and business it’s all about who you know. The same is true in recruiting. More and more, companies of all sizes are relying on internal referrals to find new hires. Employee referrals can help speed up the hiring process and produce better quality hires. Retention rates are often higher and at lower costs than other recruitment strategies, reducing the cost-per-hire.
Employee referral programs are certainly not a new concept. Many companies offer employee referral programs but, more often than not, they’re underappreciated and under supported. The most successful referral programs should offer a financial bonus or some sort of incentive for the referrer. The reward amount should be enough to encourage employees to make referrals but not so large that they offer referrals who are under qualified. In our recent survey about Talent Acquisition Trends, we found that the average referral bonus falls between $1000-$3000.
Current employees are a wealth of knowledge, they know who would be a good fit for the company, and they are also able to provide access to candidates that might not be actively looking for new opportunities. When creating this valuable tool to an organization, it’s important to add structure to the program.
Here are 7 key elements to develop a successful employee referral program structure:
Define rules about the program
Make sure to clearly educate employees on how the program works
Post job descriptions so all employees aware of current opportunities
Define the type of candidates they are looking for and skills required for each role
Explain the incentives for providing these valuable leads
Base rewards on criteria for the position (typically employment must exceed 90 days) Bonuses may be dependent on entry level vs. senior roles.
Make sure referrals and resumes are directed to HR for review
Make sure to communicate the benefits to all employees, track the number and success of referred candidates and reward successful referrals.
Getting employee referrals can be a great strategy to compliment your existing recruitment platform, so we’d like to know, how do you promote employee referrals?