3 Steps to an Effective Employee Referral Program

By Samawat Shakil
July 13, 2020
3 min read
Employee referral program

Word of mouth marketing is a powerful tactic. The right word can make your business, and a bad one can tarnish it instantly. This marketing phenomenon, when applied to the hiring process, is called an employee referral program.  

In this program, an employee refers your company to other potential employees. This practice is highly beneficial because 70% of referrals understand the company’s culture and workflow effectively, meaning their onboarding is smoother. An effective employee referral program can also lead to an improved retention rate of 46%

Here are four simple steps to get started with an employee referral program …  

Step 1: Define Your Goals  

Before sitting down and planning an employee referral program in your organization, you need to define all the goals you want to achieve.  

Your primary goal will be to find competent employees for your organization who can work effectively. Anything else you’d like to add?  

You need to define all the different objectives you aim to achieve with a referral program, like creating a pool of talented employees, reducing the hiring process cost, or improving your operations’ productivity. Set out your objectives from the start, and plan what and how you will measure to report on the progress.   

Step 2: Offer Incentives  

When you want your busy employees to steal some time from their tight schedules to find suitable candidates for the new job opening, you have to offer them some incentives.  

The majority of the employees prefer monetary incentives, but you can offer any incentive to your employees. A general idea of an incentivized program would be X amount if the referred person is hired, and another if that person is successful after the probation period. 

Bonus read: 15 creative ideas for employee referral bonus programs 

Step 3: Send a Clear Message 

How will your employees know that your company offers an employee referral program?  

If you want current employees to refer to potential candidates for an upcoming job opening, you must convey this message to them. Very few people will automatically recommend candidates for the opportunity unless you ask them to do so. 

Create a guide that is both clear and easy to reach. Pay special attention to verbalizing the terms and conditions of the program – a disagreement about a promised incentive is the quickest way to both lose trust and interest in the program. 

When you have your guide ready, promote it. Publish it on your intranet and create an internal awareness campaign so that employees know the basics of the program. Whenever there is a job opening, promote the referral campaign again so that it’s front of mind. 

Bonus read: Why Investing in Internal Comms Should Be a Priority

Going Forward 

Ultimately, the success of the employee referral program depends upon its implementation and maintenance. Set out your goals and measure the success of the initiative to optimize future projects.  

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By Samawat Shakil

Samawat Shakil is a guest contributor for IC Thrive. She is a content manager at Xobin, a pre-employment testing software for small and agile tech teams looking to do fast hiring. She is curious about the ongoing digital trends around the world and believes in the philosophy that content is king and context is queen.