Building an Employee Referral Program That Delivers Results

The hunt for talent should always be a priority among midsized firms. After all, workforce quality is an advantage that allows them to compete with larger organizations.

The best employee referral program rewards employees for suggesting top talent.

Because midsized companies generally have small HR departments, the task of keeping the talent pipeline full must also fall partly on other employees. Your staff knows the nature of the work and their culture, so tapping them to bring in other talented people makes perfect sense. To maximize this effort, your company can create an employee referral program that rewards good personnel leads, thus encouraging employees to always be on the lookout.

How to Get Started: Values and Rewards

Before such a program rolls out, leadership should first make sure that the employer value proposition (EVP) lines up with what current employees believe it to be. In a recent NCMM report, Building the Top Team, EVP is defined as "the sum total of the tangible and intangible rewards and benefits an individual receives in return for working at a company." If employees describe EVP differently than management, then recruitment will be less coherent and effective. The solution is to survey employees, which will help management understand the present EVP and make changes to boost the company's appeal.

Once employees agree with the EVP, it's time to provide them with clear rules for the employee referral program. Ask the important questions when planning your policies. Which positions carry a reward for referrals? Must candidates match every listed qualification to be considered a good referral? How long must a new hire be employed before the full reward is given? Are there rewards for good referrals that don't result in an immediate hire? Make these answers transparent to your employees as they reach out to their connections.

Next, consistently encourage workers to be company ambassadors on their professional and personal networks. Have them use their social media accounts to spread interesting company news and publicize newly open positions. Human resources can distribute job descriptions and public news pieces for release. When a referral comes in to HR or management, it's best to provide feedback to the referring employee within a few days. You can also give a small reward, such as a $10 gift card or movie tickets, if the candidate matches the criteria. If a referred candidate makes the initial cut, then add another reward — perhaps a $50 gift card or lunch with an executive — to tell the employee that the effort is valued.

Always Thank the Referrer When You Hire

In instances where a referred candidate becomes a new hire, management should give companywide recognition to the referring employee along with a larger monetary reward. According to a 2014 WorldatWork survey of bonus programs, about two-thirds of rewards for referred hires are valued between $500 and $2,500, even for clerical positions. However, these rewards do not have to pay out all at once; the start date and 90 days after hiring are two common triggers for staggered payouts. Of course, cash has its place in any rewards program, but you could also consider noncash alternatives with a higher perceived value. These could be lifestyle products such as watches, travel and hotel stays, exclusive experiences or even paid days off.

Lastly, use the onboarding process to instill in new hires the habit of suggesting people in their network, even when there's no position to fill. This will help to keep the talent pipeline filled with solid candidates.

Have you ever referred someone for a position? What kinds of rewards did you receive? Tell us by commenting below.

Rob Carey is an NCMM contributor and a features writer who has focused on the business-to-business niche since 1992. He spent his first 15 years at Nielsen Business Media, rising from editorial intern to editorial director. Since then, he has been the principal of New York-based Meetings & Hospitality Insight, working with large hospitality brands in addition to various media outlets. Circle him on Google+.


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