Employee Referral Program
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1 HOW TO BUILD AN EFFECTIVE Employee Referral Program AN EBOOK BY ENTELO
2 Table of Contents I. II. III. IV. Introduction Build the Employee Referral Program Communicate the Program and Incentives Closing Share this ebook:
3 Good news You already have your most valuable recruiting tool. Or actually, tools, for that matter. Not only are your employees a cost-effective vessel to meet your organization s goals, but they most likely have an impressive network that can be harmoniously merged with yours. Applying an employee referral program, or ERP, improves the quality of candidates coming into the hiring process. It also helps decrease time-to-hire and turnover rates by funneling a higher number of qualified candidates into your talent pipeline, keeping it brimming with potential hires a nice problem to have. What is an Employee Referral Program? An employee referral program is a system in which companies find potential new hires through recommendations from current employees. Not convinced that employee referrals are one of the most useful ways to find candidates for your open opportunities? Here are some factoids on how implementing an employee referral program can benefit your business: Nearly 40% of company hires come through referrals. Referrals are helpful for sourcing hard-to-fill roles and improving retention. Referrals quickly fill an open opportunity, with 46% of them staying with the company for three years or more. Program incentives encourage employees motivation and engagement to grow the company s mission and values. Employees often have a better sense of what is going to be required of a candidate. 1
4 Build the Employee Referral Program Creating a referral program strategy is a lot like recruiting for the company s open job positions. It can be boiled down in essence like this: 1. Define the role and its requirements. 2. Define the process for submitting candidates. 3. Explain the various bonus amounts for candidates who are hired. 4. Reach out to prospects, and recruit. 5. Evaluate the results. Next, let s dive into the foundation of a solid employee referral program a straightforward, understandable communication process for finding candidates and connecting them with recruiters. 2
5 Define the roles and requirements. Include a detailed description of each requirement for the position. Note: This isn t much different from writing up a job advertisement. Here are factors that should be included in the role description: Description of role tasks and duties Benefits and perks of position Years of expected experience in industry Specialized skills, education degrees required Because the details of the referral program and job descriptions are shared internally, you have some room for including industry-specific phrases that are most likely to be understood by folks within the company. Phrases like big data or predictive analytics, for example, may translate well from business to business, but not between businesses and consumers. Kudos if your current job descriptions already include those details. The more you clearly communicate what the company and each department is looking for, the more likely you ll find a candidate who fits what the role entails. Define the communication process for submitting candidates. Include a link to the company careers page that employees can share with their network. Keep in mind that streamlining the application process also encourages candidates to go through all the steps to submit their resumes, cover letters, and work portfolios. Consider these questions to optimize your careers page: Is the careers page easy to read and navigate through? Headers and categories that separate job descriptions, requirements, benefits and perks, departments, and office locations can help a candidate easily find what they re looking for and decide whether or not they re fit to apply. Does the applicant need to go to another site to fill out a form? Candidates who are required to go through multiple steps and external pages to fill out their information and attach files aren t likely to complete the process. How mobile-friendly is the site? Check that your company careers page formats and runs properly for on-the-go candidates who will scan your opportunities and apply for them on their mobile devices or tablets. 3
6 In addition to using an applicant tracking system, many recruiters prefer that all initial communication on a referral starts with an . As more candidates start coming in through the pipeline, categorizing referrals in an inbox can get messy. Here s a checklist for submitting referrals by Job title Referral date Referring employee s name Candidate s name Candidate s address Links to portfolio, website, or professional profile Resume, if available Typically, each team member will receive a referral link that tracks and correlates applicants to the referring employee. This way, recruiters can also follow which employees should receive their award for making a successful referral that results in a hire. Sit down with your coworkers and ask them about their active networks and who they might know. It may be obvious that one of their connections would be a perfect fit, but to an average employee who doesn t spend all day thinking about recruiting, it may not be as clear. If you re not already employing an ATS, check out these systems that can help organize the candidate pipeline: Greenhouse Jobvite icims Applicant Tracking Software Workable Zoho Recruit mystaffingpro OpenHire Halogen Software SAP ADP JobScore The Resumator TribeHR Pioneer ApplicantStack Taleo Ascendify Hirebridge mystaffingpro Bullhorn If your company uses an applicant tracking system to submit referrals, be sure to guide employees through a step-by-step process of submitting referrals through the program. 4
7 Communicate the Program and Incentives Build out an employee referral program that s straightforward and easy to understand. If your employee referral program comes off as too complex, employees will ignore it and won t participate. Do the rules and procedures make sense? Is there any language that s hard to interpret? Do employees have access to an online network that allows them to submit referrals? Introduce the employee referral program by hosting a meeting, sending out an campaign, or creating a recorded webinar employees can view later. In addition, have a channel on the internal network where details on the employee referral program rules, procedures, incentives, and organizer contact information can be accessed. This can be in the form of a slide deck, PDF file, or a separate web page. An employee referral program motivates your team to help you find the talent your company needs. Make sure they have the tools needed to know what they re doing, how to do it, and the fact that the program exists. 5
8 Explain the various bonus amounts for candidates who are hired. Make it clear which positions are most important by creating different tiers correlating the demand and importance of the position with the level of compensation. Typically, lower monetary incentives are for roles that aren t immediately needed. For example, a company may be prioritizing the hire of more engineers. All other positions are necessary, but not crucial at the moment. The employee referral program is divided into two referral buckets: the engineer bucket that s worth $5,000 per hire, and the everything else bucket that s worth $2,500 per hire. Remember: Incentives don t always have to be monetary. Recognize employees efforts to help build the talent funnel with other rewards like a coffee shop gift card, companywide recognition, or maybe an extra vacation day. Even if you don t end up hiring a referral, they become part of the network you can reach out to when the timing is right. Reach out to prospects and recruit. Proactively build the candidate pipeline by continually encouraging new and current employees to refer qualified talent for your open reqs. Acknowledge that you receive employee referrals, and be sure to keep team members in the loop on an applicant s hiring process to keep them motivated and engaged to continue referring top talent. Giving referrals the white glove treatment is a big don t, as it can create internal biases, spoil your company s values, and create unnecessary office politics. Evaluate the results. Track your company s hiring successes and ROI from diverting to an employee referral program. How has your cost per hire changed or improved, and how does it compare to hiring through other sources? Has your time-to-fill decreased? Does the program help with improving company culture? Measure how long the referred employee stays with the company and if the turnover rate has decreased across the board because of the program. 6
9 Last Words Remember to keep the referring employee in the loop of the hiring process, whether or not the candidate ends up being hired. This helps employees feel like they re part of the process, keeping them motivated to participate in the referral program. Regardless of how talent is sourced, all candidates should go through the same hiring process. Overall, be sure to convey the heart of the matter an employee referral program is a win-win situation: Team members help the company find great candidates, and if a referral is hired, the employee who referred the new hire will receive appropriate compensation, including a skilled, qualified coworker. 7
10 About Entelo Entelo gives companies a competitive advantage in building great teams. The Entelo platform leverages big data, predictive analytics and social signals to help recruiting organizations find, qualify and engage with in-demand talent. To learn how leading companies like Facebook, ESPN, AT&T, Salesforce, and Yelp are building their teams using Entelo, visit Share this ebook:
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