Employee Referral Programme - Top 10 Tips

A well-managed, carefully designed Employee Referral Programme (ERP) can deliver amazing results.

For many organisations the ERP is their most important recruitment channel – delivering more new hires than any other. So it makes sense to focus some strategic attention here – especially if you believe that attracting talented individuals is critical to your future success.

Before we look at the “Top Ten Tips” (our best practice guide), here are some of the benefits an ERP can deliver:

  • 30%, 40% or more of your new hires can be attracted via ERP
  • Cost reduction by saving agency and advertising spend
  • Better quality candidates who perform well and stay longer
  • Recruitment resource and time investment dramatically reduced
  • Increased diversity by reaching the passive audience
  • Promote your employer brand through the most authentic channel
  • Enhanced employee engagement

So why wouldn’t you want to initiate or maximise the effectiveness of your ERP? Deciding to invest in an ERP as part of your recruitment strategy should be a no-brainer – but devising a great ERP takes a bit more thought. We’ve drawn upon our own experiences working with clients around the world as well as researching other case studies and available data and information to devise this guide.

1. Secure management commitment

Leaders should set the tone and encourage a referral culture.
Make the business case:

  • Quality
  • Passive audience
  • Quantity
  • Reduced time to hire & improved hire ratios
  • Increased retention
  • Increase diversity
  • Save money

Develop a data driven model and continually update the business. Appoint a focal point for the programme with regional/functional leads.

2. Be Responsive

Referrals should be tagged and treated like VIPs and fast tracked through the recruitment process. Referrers should be kept in the loop and be able to view the status of their referrals. Regular, good quality referrers should receive special treatment and rewards. The most regular failure of referral programmes is slow bureaucratic processes that quickly disengage people.

3. Maximise Eligibility

If possible, allow and encourage everyone to make referrals – e.g. leaders and line managers are likely to know the highest quality, relevant people. Consider alternative rewards to avoid conflicts of interest – e.g. a donation to a charity.

4. Widen Rewards Beyond Cash, Gamify and Set Targets

Recognition & thanks are the most important reward. Cash rewards are the most common and provide an incentive – but you should also consider: prize draws, vouchers, extra holiday, dinner with CEO etc. Also consider “points make prizes” as part of a gamification programme. Set targets for regions/functions/teams and create a league table. Consider small rewards just for names from high quality referrers. What about “spot rewards” for hard to fill vacancies?

5. Train & Communicate

Develop an ERP brand and make a big splash for new hires.

Be specific about who you are looking for and be clear about the process and rewards.

Provide useful tips/hints and the elevator pitch.

Give feedback (positive/negative) and consider developing a network of champions.

6. Use External Networks

Provide tools, materials, training and encouragement to referrers to enable them to reach their wider networks:

  • social & professional networks

Consider including other external networks into the programme:

  • Alumni
  • Vendors

7. Focus On Business Needs

Ensure the focus is on the most important challenges e.g. new fast growing teams, skills shortages, recruitment crisis and chronically hard-to-fill vacancies.

8. Make It Easy

Develop/configure an intuitive slick platform with seamless integrations and reporting. Provide sufficient training – develop experts who can educate others. Provide time saving tools (e.g. social and job matching). Ensure referrals are “tagged” to enable data capture for communications, payouts and reporting. Pay outs and rewards must be verified – but then paid as quickly as possible (e.g. avoid “referral must stay in post for…”).

9. Experiment With Campaigns

Although there should be a consistent framework there needs to be the opportunity to localise: language, messaging, rewards etc. Engage with your referrers – e.g. a themed event that is focused on the differentiating aspect of the roles/function/location. Keep it refreshed. Provide enough information about the role and where it is.

10. Measure, Report and Refine

Agree objectives with KPIs (e.g. Quality, quantity, time, cost etc.) Devise a reporting regime that supports the above. Celebrate success, report to leaders and gain further buy-in. Experiment and refine tactics.

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