Table of Contents
- The Benefits of an Employee Referral Program
- Employee Referral Program Ideas for Success
- Bonuses and Incentives are Just the Beginning
- The Far-Reaching Effect of Employee Engagement
- Turn Your Engaged Employees Into Avid Brand Ambassadors
- The Right Technology to Support Your Employee Referral Program
- A Solution That Drives Adoption
- The Power of the One-Platform Approach
- Ensuring Constant Optimization With Data
- Execute a Well-Rounded Employee Referral Program
The Benefits of an Employee Referral Program
The benefits of employee referrals are universally lauded. Firstly, they allow you to connect and engage with new talent at a lower cost than more traditional methods. In fact, studies have shown that an effective employee referral program can reduce cost per hire by up to $3,000. Not only that, but the time to hire also diminishes when recruiting referred candidates.
On top of this, referred candidates come recommended by your current employees, who know your culture in depth and believe these referrals can be a good fit. This explains why the retention rate for referrals tends to be higher than that of non-referrals.
In addition to the evident saving and retention benefits, employee referral programs also shed light on an often unaccounted aspect when discussing referrals: the validation that your employees are engaged enough to act as advocates for your organization.
Employee Referral Program Ideas for Success
With the benefits listed above, it’s no surprise that organizations are coming up with innovative employee referral program ideas to encourage participation.
Bonuses and Incentives are Just the Beginning
Bonuses and incentives quickly come to mind when thinking of how to reward your employees for promoting your organization. While some companies offer benefits in the form of money, others diversify their incentives strategy by providing extra vacation days, gifts, vouchers or even free coffee.
There are also those who turn to more creative alternatives and give their referral programs a boost with gamification. Through scores or level-based games, they set up reward systems that help track their employees’ referral activity while increasing buy-in and engagement.
All things considered, the cost of these rewards tends to be significantly lower than the cost of going to market yourself or hiring an external agency to bring in candidates, making incentives a worthwhile investment.
Though a nice perk, incentives aren’t always necessary if your employees are engaged. Sharing an example close to home, an impressive 30 percent of our hires at Avature in 2022 came from internal referrals. Yet, our referral program is not incentivized.
Clearly, there are other factors that influence your employees’ decision to refer a friend or relative beyond tangible rewards. Below, we’ll analyze some of them in detail as well as share tactics to maximize them.
The Far-Reaching Effect of Employee Engagement
Like anything in life, you’re not going to recommend it if you aren’t a big fan yourself. And in the context of work, it’s the same. Though conclusive statistics demonstrating the relationship between employee engagement and referrals are hard to come by, the connection is clear.
However, with 51 percent of workers actively seeking a new job according to Gallup, lack of engagement seems to be a challenge of its own. In our conversations with leading companies, enabling professional development stands out as a powerful driver of workforce engagement.
This goes in line with Gallup’s study above, which shows that the hope to find more development opportunities is one of the main reasons why so many people are looking for a new job.
Through internal mobility and modern learning programs, companies can offer advancement opportunities based on individual career aspirations, skills and interests. Creating a continuous growth environment can allow you to tackle disengagement. At the same time, it can drive a more positive sentiment toward the organization that motivates your employees to bring in their referrals.
Company culture is another cornerstone of engagement. As the shift to remote or hybrid work models consolidates, organizations need to foster connection, either by leveraging their internal messaging apps, hosting regular meet-ups or deploying corporate social platforms.
Companies with strong organizational cultures rely on these channels to stimulate employee engagement. The most strategic ones, however, see them as an additional touchpoint to fuel their employee referral programs by sharing success stories, inspiring the workforce to keep up their efforts and facilitating the exchange of experiences.
Turn Your Engaged Employees Into Avid Brand Ambassadors
Beyond referrals, having engaged employees act as avid brand ambassadors can have a bigger knock-on effect.
It’s widely known that people are more likely to show interest in organizations someone has vouched for. From an employer brand perspective, this means that your employees can become authentic ambassadors, even more so, with their voices being three times more credible than the CEO’s when talking about a company’s work conditions.
Because of this, organizations with successful talent attraction programs capitalize on their workforce’s engagement and compelling voices to increase the authenticity of their employer brands by:
- Encouraging employees to share corporate content on social media.
- Featuring their firsthand testimonials as articles or videos on their career sites.
- Having them as spokespeople at events and other talent acquisition initiatives.
Employees can sell your company in a very authentic way: they know about the jobs and the culture of the company and are truly ambassadors. So, in addition to finding really high-quality candidates in a good number through the Employer Referral Program, it really strengthens our employer brand.”
Dr. Sebastian Hubert – HR Director, Siemens
Though bringing to life the employee referral program ideas we shared above can be demanding, offering incentives, strengthening your organization’s culture and ensuring development opportunities can boost employee engagement. In turn, this can encourage your workforce to become true advocates for your brand and vital components of your larger recruiting strategy.
The Right Technology to Support Your Employee Referral Program
Let’s say your incentives and engagement strategies have allowed you to build a workforce excited to put some of their key contacts forward for your hard-to-fill roles. If you don’t have a dedicated solution that supports a streamlined and transparent experience, your employees might not feel compelled to move from excitement to action.
A Solution That Drives Adoption
At the heart of your employee referral program, there should be an intuitive, branded site where employees can access a list of available roles, submit candidates easily and follow up on the status of any ongoing referrals in real-time.
For starters, it’s important to ensure the submission process is as simple as possible. A dedicated referrals solution can give your employees a centralized hub where they can see open positions at a glance and quickly submit their recommendations.
Chances are many of your employees making referrals are not recruiters, so, understandably, they might have difficulty identifying a suitable opportunity for an acquaintance.
To prevent this from becoming a barrier, you can let employees submit a candidate into a generic pipeline or pool. Your recruiting team can fill any additional gaps later in the process. In fact, the best teams see these as additional engagement opportunities.
As another alternative, many companies today leverage AI to provide employees with recommended roles based on their friends’ CVs. This, they find, enhances the recommendation experience and increases the likelihood of referrals being a good match.
Referrals depend largely on the referrer’s sentiment towards the organization. But they also depend on their confidence in the program. Even employees with high levels of engagement can lose faith in a referral program that lacks transparency.
To guarantee transparency, many organizations focus on keeping referrers in the loop. Leveraging workflow engines to set up automated communications, they provide timely status and feedback updates, granting visibility and allowing employees to feel involved in the recruitment process.
The Power of the One-Platform Approach
Your employee referral program is one of many pieces in your recruiting strategy. Naturally, the solution you deploy to underpin your referrals program should fit nicely into your larger technology stack.
Having a referral solution that connects to your Applicant Tracking System allows data to synchronize seamlessly between the two systems, eliminating the need to ask candidates to re-enter their information when applying on your ATS.
Beyond that, this one-platform approach to talent acquisition unlocks a single source of truth, which can be paired with advanced reporting capabilities to give your teams complete visibility into the effectiveness of referrals compared to the rest of your recruiting sources.
Ensuring Constant Optimization With Data
As well as understanding where referrals sit in the bigger talent acquisition picture, you can leverage analytics and reporting to zoom in on your referral programs’ performance.
Armed with data regarding participation rates, business areas and locations that drive the most/least referrals, top referrers and ROI, among others, you can periodically revisit your strategies and tactics and steer the wheel as your needs evolve.
Execute a Well-Rounded Employee Referral Program
Within your employees’ networks exists a vast talent pool that can be an excellent hiring source. By leveraging these connections through a solid program, you’ll engage talent with a similar cultural fit, helping streamline your recruiting efforts.
From incentives (and the many forms they can take) to workforce engagement and employer branding, we’ve covered valuable points to consider when bringing a high-performing employee referral program to life.
We’ve also highlighted the requirements successful companies focus on when selecting a solution, as investing in the right technology can increase participants’ buy-in while making it easier to evaluate referrals as part of your talent acquisition strategy.
Avature Refer provides a robust set of capabilities to activate a simple and transparent referral experience for your workforce while empowering your teams with real-time data. But it doesn’t end there. We offer a suite of best-of-breed talent acquisition solutions that you can deploy to build a centralized recruiting database. To learn more, contact us.