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The Do's and Don'ts of Building a Successful Employee Referral Program

Posted by Natalie Pike on February 3, 2015

Did you know that referred employees are 20% less likely to quit a job? This statistic alone should be the reason to have an employee referral program that works correctly. They can do wonders for your company. Not only do referred employees have higher retention rates, but a fully functioning program increases employee engagement as well. 

A successful referral program begins and ends with the effort you put into it. Dr. John Sullivanan internationally known HR thought-leader from the Silicon Valley, has discovered a few best practices for building a strong referral program while many other experts have noticed some common mistakes managers tend to make. 

DO: Communicate in a Timely Fashion Cell_phone_(1)

These days, there's no excuse for a lack of communication. Phone, e-mail, social media, and other efficient ways to interact are available to you 24/7. According to Sullivan, the main reason that referral programs fail is slow or nonexistent responses to inquiries. Make sure to report feedback within 72 hours. Allow your referred candidates to choose the time and date of their interview. Being in charge and making their own schedule is an enticing factor for the candidate.

DON'T: Wing it

Conceptualizing, planning and executing an action plan is all mandatory when building out an effective referral program. Think about numbers and a step-by-step guide your team can follow. Understand how they function and tailor your action plan accordingly. Here at Hireology, the majority of our engineers work remotely. We make it easy for them to participate, regardless of their location. 

DON'T: Limit the offers

Some programs tend to restrict members from other areas of expertise from giving a referral. Say you're in Sales and you know someone who would just kill it as Graphic Designer. Why shouldn't you be able to refer that person? Allow team members to refer whoever they want. Think of it this way, you can never have too many candidates. According to HR Kitchen, a blog on best practices in Human Resources, "allow non-employee referrals. Anyone who is interested in the advancement of the organization like clients, retired employees or stakeholders should be encouraged to participate."

DO: Give Company Rewards

The majority of hiring managers either don't want to pay for a rewards program or they don't see the importance of it. Without an incentive for your employees to participate in the referral program, they'll push it to the bottom of their priority list. Obviously, every employee wants great talent within the company, but in order to put his or her individual effort into making that happen, they'll want something in return. Some examples include gift cards, cash, a day off, a parking spot, a free lunch, etc. The sky's the limit!

The opportunities are endless when it comes to building a successful employee referral program. These bits of advice are only a fraction of what actions you can take to perfect this process. Once you see the top talent roll in, you'll thank your network and realize the time you spent nurturing the program was well worth it. 

Notice yourself making mistakes when it comes to your referral program? Read more about other errors you might be making during the hiring process. Download the complimentary eBook now.

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Employee Engagement, Referral Program, Management


Natalie Pike

About the Author

Natalie is Hireology's Inbound Marketing Coordinator. Her favorite topics to write about are how to hire millennials, building a strong company culture, and employee engagement. She is a Purdue University graduate (Boiler up!), social media junkie and avid iced coffee drinker.