Employee Referral Must Haves for Driving More Applications, Increasing Hires and Building a Strong Recruitment Culture

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1 Employee Referral Must Haves for Driving More Applications, Increasing Hires and Building a Strong Recruitment Culture

2 TABLE OF CONTENTS Introduction Channel your Inner Marketing Genius 25 Part 2: Types of Incentives/Rewards 6 Put Yourself in Their Shoes. 26 Why Reward?... 7 Variety is the Spice of Life 27 Intrinsic Engagement Factors. 8 Money Isn t Everything. 28 Extrinsic Engagement Factors. 14 Part 5: Fusing Social with ERP 29 Part 3: Dealing with Conflicts 19 Branding Status Updates. 33 Part 4: Optimizing your ERP 22 Future of Referral Programs 35 Automating and Metrics. 23 Conclusion.. 36 Refreshing the Program

3 Careerify Introduction Introduction Talent is the fundamental basis that drives a successful business. For most companies, employee payroll represents both the largest controllable expense and the greatest driver for value creation. Despite its essential purpose, talent is becoming increasingly difficult to find. As baby boomers are beginning to exit the workforce, they are leaving hundreds of thousands of jobs open. Organizations are struggling to hire adequate talent when they need it. About this study? Since 2009, Careerify has surveyed over 2,600 organizations on various components of social media, and referrals. Careerify has interviewed 609 organizations on their recruitment culture, and what makes an effective employee referral program. Let s take a look at a quick summary of our last e-book, The Basic Principals of Employee Referrals 3

4 Recap The Benefits of Referrals The Benefits of Referrals The following are some of the top benefits of building an effective ERP: Grade A talent know other Grade A talent Often times, people associate themselves with others who have similar qualifications, interests and education. Lower cost for higher ERPs can save an organization thousands of dollars a month since the cost of acquisition via external sources tends to be higher than from referrals Better retention and increased productivity A robust employee referral program creates lower turnover, creating better retention amongst employees by building strong personal networks within an organization Strong Recruitment Culture ERPs tend to build a strong recruitment culture within the company. Employees are actively involved as they continuously seek for great talent

5 Recap Poorly Executed Practices Poorly Executed Practices Though analyzed in our last e-book in the Basics of Employee Referrals, let s quickly summarize poor practices of an ineffective ERP: Not having employee recognition with Referrals Underfunding the program or severely discounting the reward Excluding executives from the program Not creating strategy or analyzing statistics every months Paper processing and administration Providing a reactive response to both referred candidate and employee Creating probation periods that are greater than 120 days Share Ebook Now:

6 PART 2:TYPES OF INCENTIVES/REWARDS It s human nature to be motivated by some level of reward or incentive. It is essential to review the various reward options you can provide your employees to further increase the rate of referrals without sacrificing the quality. 6

7 Incentives/Rewards Why reward? Why Reward? Irrespective of the size, geography, or type of organization, it is imperative to reward and recognize employees. Rewards and recognitions can vary from a simple thank you, to monetary rewards such as cash bonus. Let s take a look at the two main types of engagement: Intrinsic Intrinsic engagement is an absolute must when creating an optimized employee referral program. From best selling author Daniel Pink of Drive to studies completed by MIT, research indicates that intrinsic rewards are an excellent way to motivate employees to complete a task through autonomy, mastery, and purpose. Extrinsic Extrinsic engagement is a vital aspect of some of the most successful ERPs companies have created thus far. Extrinsic motivation can be in the form of compensation through points/dollars, perks, vacation days, or even promotions. Share Ebook Now: 7

8 Incentives/Rewards Intrinsic: Recognition Intrinsic Engagement Factors Recognition Recognition blends itself as both an extrinsic and intrinsic engagement factor. Recognition is a powerful feedback mechanism that many employees strive for. A simple thank you for a referral from a recruiter or direct hiring manager will influence an employee to think of who else within their networks may be great candidate for the corporation to hire. Optimized ERPs often have recognition included throughout the interview process. The following two pages will highlight how to incorporate recognition within the interview process, and why each should be considered when designing the optimal referral program. 8

9 Incentives/Rewards Intrinsic: Recognition Recognition (con t) Submission of a candidate: Once a candidate has applied for a position through an employee referral, it is strongly recommended to recognize the employee with a thank you in a timely manner. Reinforcing acknowledgement of the employee referral indicates to the employee that their referral is valued by the organization. This also stimulates the employee to be involved in the hiring process, creating deeper engagement. Offer stage: After researching and assessing hundreds of companies, the few that have attained 50%+ of their hires through referrals often initiate recognition once an offer had been made to the candidate. Sometimes interviews are drawn out in a lengthy process. The employee can be an influential person within the offer stage, as they ultimately have a stronger relationship to persuade the candidate to accept the opportunity over potential competitive offers. By ensuring that the employee is involved in securing the hire, the employee will likely have greater fulfillment.

10 Incentives/Rewards Intrinsic: Recognition Recognition (cont d) Hiring stage: Once the hire has taken place, recognizing the employee is an absolute must to ensure he/she participates in future recruiting opportunities. A form of recognition can be a simple thank you card from the hiring manager and recruiter, or a publicized recognition at town hall meetings. Two companies that we studied recognize their employees by sending a monthly newsletter which includes exceptional performers who have helped with recruitment via the referral program. Important Note: Employers should obtain permission from employees prior to providing public recognition. Though the majority of employees may yearn public praise amongst their peer group, some employees shy away from this attention. It is important to manage this process to ensure employees are comfortable with any public recognition. Share Ebook Now:

11 Incentives/Rewards Intrinsic: Creating a Purpose Explaining the Purpose Many companies struggle with incentivizing employees to participate in the employee referral process. This is normally as a result of lack of education, namely, not explaining to employees the purpose of the referral program and their role in it. By simply educating employees on the purpose, employees are more likely to be engaged in the ERP. Here are examples of purpose statements that top companies use: Managerial skills: Learning the traits and qualities the ideal candidate possesses will allow employees to spot great talent when they become managers within the organization.

12 Incentives/Rewards Intrinsic: Creating a Purpose Creating a purpose (cont d) Work with a friend: Most employees enjoy having their friends at the office. It creates more of a work-life balance employees may yearn for. Helping the company: Hiring great talent is proven to drive greater efficiencies within a company and can lead to greater, more exciting projects within the company. Increase Work Place Harmony: Referrals lead to a stronger culture with better team work, communication and productivity. Helping those in their network get a job: Letting employees know that you welcome referrals that may be actively seeking for an opportunity, but are close to the employee, may spark significant interest. Share Ebook Now:

13 Incentives/Rewards Intrinsic: Challenges and Competitions Challenges and Competitions Challenges can promote innovation and hard work because they act as a chance for individuals to showcase their skills and true capabilities. Organizations should take advantage of challenges and incorporate it as a part of their referral program. For example, you could have departments and/or locations across the region or organization compete for the greatest number of hires. Not only does the challenge employees, but the results create an engaged workforce that will be more active in contacting their networks to find the best hires. We will look at examples of organizations utilizing challenges to engage their workforce successfully in our best practices section. 13

14 Incentives/Rewards Extrinsic Engagement Factors Extrinsic Engagement Factors Incentives Incentives are included in many successful ERPs. From our study of analyzing 609 corporate ERPs, only fourteen organizations, one retail and two non-profit, had opted not to provide an incentive for their employee referral program. Incentives can include money, gifts, discounts, reward points, travel, and more. Though cash is most commonly used to reward referrals, it s important to choose incentives that will appeal to your ideal end user, or offer a variety of incentives to ensure all users are engaged. How grand the incentive is depends on a number of factors, including how difficult it is to source talent (cost per hire), the seniority of the position, and geography. 14

15 Incentives/Rewards Incentives Overview Incentives Incentives based on Geography: Occasionally, companies may have office locations that may be difficult to source due to location alone. Remote mining and oil fields, and jobs where employees may have to travel to rural areas away from their residence are natural locations that will require greater incentives to the employee. As most candidates are geared to work in urban areas, employers may have to be creative with certain requisitions and/or locations to further incent employees to internally apply, or have their networks apply to the job. Seniority: As the seniority of a position increases, it is usually more difficult to find quality candidates. Therefore, some employers opt to provide greater incentives; this is sometimes seen in in partnership based companies such as accounting and law firms. Share Ebook Now:

16 Incentives/Rewards Incentives Overview Incentives (con t) Seniority (con t): Caution: Rewarding opportunities that are difficult to source by seniority may lead to employees focusing solely on finding candidates for these jobs, due to the greater incentives at stake. How much to incent: Generally employees know the difficulty of sourcing positions due to the shared experience when they were hired. If they were sourced through head-hunters, they are aware that you paid thousands of dollars to source similar positions. Therefore, providing a $250 reward will deter employees from actively participating. Incentives should be anywhere between 30%-60% of the cost per hire. Therefore, if your cost per hire is $3000, rewarding anywhere from $1000-$2000 will often engage employees yet still save you money.

17 Incentives/Rewards Discounts Discounts Another form of incentives may be to provide a discount your products and/or services to engage your employees. This is a unique way to dually reward your employees while incentivizing them to purchase your products/services. Out of the companies involved in our research, industries utilizing this model are often in the retail, consumer packaging, and hospitality domains. Nonetheless, other industries can adopt discount incentives if an employee achieves a milestone within the referral program. We have seen retail organizations add discounts to their ERPs, such as Canadian Tire. Retail staff receive gift cards and discounts to the store. 17

18 Incentives/Rewards Exclusivity Exclusivity As demonstrated in the story of Charlie and the Chocolate Factory, exclusivity is a powerful element in creating engagement. It provides a sense of belonging and a desire to be a part of an elite group. Exclusive events make people feel special and appreciated, serving as powerful motivation factors. You can create exclusivity by: Providing users who reach a certain level of engagement a password to a private section of your corporate website with more reward offerings Access to experts, resources and other perks they wouldn t normally have Extra recognition in the form of an exclusive club or badges, such as those seen on mobile social networks like Four Square Caution: Use exclusivity with caution. Some employees may feel excluded to such a program and may intentionally avoid the program. Share Ebook Now: 18

19 PART 3- DEALING WITH CONFLICTS With any new program implementation comes some level of conflict. In the case of a new ERP implementation, it is important to plan (to the extent possible) for any issues, and ensure solutions are available should they arise. 19

20 ERP Conflicts Possible Conflicts Possible conflicts It is essential to have a contingency plan for possible conflicts that may arise through implementing an ERP, and raise awareness through documentation and messaging to employees ahead of time. The following are potential conflicts and recommendations on how to cope with them: Multiple employees referring the same person It is possible that two, or more, of your employees may refer the same candidate. In the case in which this arises, we recommend looking for any proof that displays which employee did in fact refer the candidate. The majority of employers have a first come, first serve policy. Alternatively, we have seen some employers spilt the reward amongst both employees, or elect to reward all employees the original incentive; nonetheless, it is imperative to be consistent with all conflicts. 20

21 ERP Conflicts Possible Conflicts Conflicts (con t) Referred Candidate already within the database from another source It is possible that the candidate your employee has referred already exists in your database through a different source such as a job board. In order to mitigate this conflict, we have seen some companies create a rule whereby if the candidate has been within the system for less than six months, the employee will not get the referral reward. In situations like these, it is absolutely imperative to quickly inform the employee of the policy to ensure they are not caught off guard when their referral is hired. Family relations A few Industries, such as financial institutions, may discourage employees to refer family to positions. It is important to consider the implications of mixing professional and personal lives, and it is at the discretion of each organization to create a rule for referring family members if this is a concern. Share Ebook Now: 21

22 PART 4: OPTIMIZING YOUR ERP We have learned that ERPs are not exclusive to any single type of organization, rather they can be leveraged by any type of organizations to accomplish similar objectives. As with any new program implementation, it is important to optimize for it to reach its full potential. 22

23 Optimizing your ERP Tips to optimize ERP Automating and Metrics Progressive companies strive to automate their ERPs. After all, most ERPs often come with manual tracking for incentive programs, marketing and awareness efforts to employees, and repetitive follow-ups by employees for referral statuses. This can lead to several hours of admin time within a week, often provoking enterprise corporations hiring someone full-time within HR to manage the entire program. Progressive Companies automate manual processes through the use of technology, ultimately allowing them to focus on more critical tasks. For metrics, top companies are accurately tracking their source for hires via an applicant tracking system. Metrics give a company the opportunity to track system health, such as estimating a ROI of a referral campaign or a system refresh. Share Ebook Now: 23

24 Optimizing your ERP Tips to optimize ERP Refreshing the Program From time to time, ERPs much like other initiatives or polices, need to have a refresh to maintain the expected employee engagement and commitment. It is essential to remain current in all your tracking metrics for the program to reach its full potential. One way to ensure a constantly robust ERP, is to always look at your metrics. It is important to determine any change in engagement in order to effectively change your program. You can change your incentive and engagement factors. Many companies, as you will see in the next few slides, utilize ingenious marketing campaigns and extrinsic rewards to really invigorate a referral program. Some executives do not believe this is worth the effort since the majority of the employees may be the same. However, turnover does occur, and opportunities may arise which could make previous referred candidates an ideal fit. Share Ebook Now: 24

25 Optimizing your ERP Channel your Inner Marketing Genius Channel Your Inner Marketing Genius Great Companies always try to become creative when building an ERP. We love what Webroot did. Not only did HR communicate their ERP like a spy-agent game where their employees are agents rooting out the best candidates, but they also built recruitment selling points right into the piece. Moreover, since not all employees are extraverts, HR created an additional how to network list to aid them. 25

26 Months Optimizing your ERP Put yourself in Their Shoes Put Yourself in Their Shoes In the world of technology, we want services to be real time. Imagine if Amazon.com shipped your purchase months later! You would not be happy. Similarly, employees crave immediate recognition, whether it is just a thanks or a reward. If probation periods are required, we strongly suggest no more than 3 months, with at least a portion of the reward given at the time of the hire. After all, the employee referred a candidate who was seen as a good hire and selected by the organization. The employee did his or her part, whether or not the new hire leaves before the probationary period. Take a look at what happens when you add the interview time to a 3 or 6 month probation period. Application Interview Stage Offer + Screening Hired Started to Work Probation Ends Mood: 26

27 Optimizing your ERP Variety is the Spice of Life Variety is the Spice of Life You may consider adding interview bonuses. Companies who elect to do this commonly decrease the overall hire bonus, but provide immediate incentives that have lasting impact. Companies like ev3 have long understood that having multiple ways to recognize will increase engagement and loyalty. Not only does ev3 give up to $4,000 in cash per hire, but also does a quarterly draw of $500 just for referring, and a branded gift to both the candidate and the employee if the candidate enters the interview stage. It may be a small gift, but both the candidate and employee will have a lasting impression. 27

28 Optimizing your ERP Money isn t Everything Money isn t Everything Experiential rewards are proven to resonate with people more than cash does. Cash is spent on mortgage payments and credit cards, while experiential rewards etch your company into your employee s memories when they experience the event. Consider creating a prize that will excite employees. By pooling the money spent for one additional agency hire or online advertising package (SEO or Job Boards), companies can create robust programs that excite. Siemens and netapp, as shown to the right, did exactly this. Both companies recently raffled a car as a grand prize competition. Though the costs may look enormous, both companies saved tremendous amounts of recruitment spend that they may have spent on agencies, job boards, and other external costs. Both companies seen significant jump in referral hires, and the buzz within respective companies was obvious. 28

29 PART 5: FUSING SOCIAL WITH ERP Most referrals are activated when a candidate reaches out to the employee, but it is seldom that the employee triggers the referral process through their own networks. Having access to an employee s network from a recruiting perspective is the holy grail of sourcing the best talent. Luckily, we now have the tools that enable us to tap into their vast networks. 29

30 Social ERP Social Overview Social Media Within 5 years, social media has gone from niche to mainstream. With over 78% of internet users having a Facebook account alone, the second main activity online (other than search), is social media. Note that social media is defined broadly and includes: personal networks such as Facebook, micro blogging tools such as Twitter, professional networks such as Viadeo, Xing and LinkedIn, video tools such as YouTube, among others. In order for organizations to remain competitive, they must adapt and incorporate social media into their recruitment strategy as a goldmine for talent acquisition. Social media reveals the six degrees of separation of how people are connected to one another. With this information, corporations can become more proactive in their recruitment searches instead of relying simply on job boards or agencies. Share Ebook Now: 30

31 Social ERP The Natural Link between Social & ERPs Social Media and referrals Just as we have unprecedented trust in our direct networks, we also rely on the quality of recommendations made by our contacts when they refer someone to us. These types of referrals are absolutely essential for an optimized referral program. As the web continues to become more interconnected, social networks expose relationships with greater information, thereby building a stronger case for referrals utilizing social media. While we have seen corporations create Facebook pages and Twitter handles to post a job (thereby mimicking a job board), referrals leveraging social media convey your branding to networks you trust the most; your employees. These networks allow you to reach candidates that may not be found on job boards or through third party agencies. Ultimately, your employee base represents an untapped and strong source of referrals. Share Ebook Now: 31

32 Social ERP The Social Impact The Social Impact Careerify found that the average employee has 316 Connections (data from 263,000 users) 100 mployees 31,600 first contact points 10,000 employees What does this mean to you? 3,160,000 first contact points 2,000 employees 632,000 first contact points 500 employees 158,000 first contact points

33 Social ERP Branding your Status Updates Branding Status Updates When looking to merge social media with ERPs, it is vital to build communication material for your employees to easily refer to. Be prepared to have a source of information to educate employees on building effective referrals for status updates and private messages. Tips for status updates: 1. Length of message: Generally, keep this short and sweet. No more than 140 characters (if you want your employees to use Twitter). Sometimes job titles will be long which may require additional characters. 2. Create something memorable and witty. Your company might be opposed to this, and it is completely acceptable to create your status update professionally. Writing a creative message will only increase your chances of people noticing your employees (and conversely your brand) posting. Professional: *CompanyName* is hiring for a *JobTitle* at their *JobLocation* office. Click here for more info: *ShortURL* (such as bit.ly) Witty: Chances are you are bored and reading this from work. Have fun with us while working as a *JobTitle*. Click here: *ShortURL* Share Ebook Now: 33

34 Social ERP Strategic Tips for your ERP Social Media Summary The post and pray model is over. As baby boomers retire, and family sizes steadily become smaller, the crunch to find quality talent will only become more challenging. Recruiters need to be proactive in this candidate-driven world. By tapping into employees social networks, recruiters can quickly connect with potential, high-quality candidates. Invite employees to connect with you and your hiring managers. Do some of the heavy lifting by searching and directly asking them for an introduction on selected candidates. If they accept, provide a bonus for facilitating the introduction and supporting the candidate. It s the basic law of recruiting: A players know other A players. Learn about Privacy here. 34

35 Prediction ERP s in the Future Future of Referral Programs We foresee ERPs becoming more interactive through the usage of gaming. No longer applicable only to children playing on consoles, gaming has been introduced through many business applications in the last five years. For example, gaming has been introduced into educational training through simulation. While simulating what an ideal referral is to the employee might be far fetched, employers should expect better engagement through greater campaigns and competitions which are at the individual and team level. Imagine, employees unlocking a prize if they convince their respective peers in their company to refer three more hires. Share Ebook Now: 35

36 Conclusion Optimizing your ERP Conclusion In order to optimize ERPs, the following must happen: Create recognition and rewards within your referral program. You may not only find it beneficial to compensate on a per hire basis, but also for other milestones such as interviews. Analyze what your employees would appreciate more: extrinsic (such as prizes or cash) and/or intrinsic rewards (recognition) Provide an ERP rulebook to employees to create transparency Create purpose for each employee such that they are motivated to refer Arm yourself with metrics such as specific source hires within your ERP Refresh your employee referral program, preferably every 12 months Tap into social media ABOUT THE AUTHOR Thanks for reading. Harpaul Sambhi is an international speaker and thought leader in the social HR industry and is the CEO of Careerify, a fast-growing software company. You can connect with Harpaul on LinkedIn, or Twitter. Share Ebook Now: 36

37 Learn More About Careerify The All-In-One Social Employee Referral Platform for Recruiting & Engagement. Watch Demo And Testimonials Now Like This Ebook? Share to your Network: 37

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