How to Leverage Employee Referrals to Enhance Business Hiring Success

Finding skilled employees can be a huge challenge for any company. For growing businesses, it can also feel like a never-ending task. 

Employee referrals can help ease the burden of finding the right new recruits. Think about it: your employees are well-trained, they know the business, and with the right incentive they can help to attract the right people.

What is an employee referral program, and what are the benefits?

An employee referral program involves incentivizing your employees to use their professional and social networks to reach potential new hires. There are different ways a referral program can work but usually, employees are offered bonuses or rewards if their referred candidate is successfully hired and completes a probationary period.

Referral programs are becoming increasingly popular as they offer benefits to both the business and employees. One of the main advantages is that it can cut down the time and money associated with traditional recruitment methods, such as advertising on job boards. They can also help build a strong employer brand which can also help attract the right talent.

Your employees are likely to know people with the right skills for the role – and importantly, the right ethos. As your employees are familiar with the company culture, they’ll know if their contacts will fit in. Plus, they’ll be able to sell the role to the potential new hire thanks to their own experience. Overall, this can lead to higher-quality hires and lower turnover rates. It can even improve employee engagement and trust, since employees will feel more empowered.

How to leverage employee referrals

To get the most out of your employee referral program, there are several strategies you can employ.

1. Make it part of your onboarding process

New recruits are at the peak of their excitement about your company. Schedule time during their first three months of employment to talk to them about your referral program, and what you can offer. It’s likely that they’ll know others on a similar job hunt to their own, and be keen to make referrals.

2. Train your employees 

To make referrals part of an effective recruitment strategy, employees will need some training on how to determine whether someone would be a good candidate – and what the process for recommending them is. A simple and clear recommendation procedure can help avoid missing out on great candidates. It can also reduce the pressure on employees to find the perfect person if they know exactly what you’re looking for.

3. Design an incentive strategy

While a common reward is a monetary one, don’t treat this as the only option. Consider things such as additional paid leave, donations to charities staff care about, or physical rewards like a new phone or smart watch.

For businesses operating in multiple locations, consider tapping into local knowledge and building relevant employee incentives. Maybe you can work with local businesses, such as a restaurant or gym, to provide a range of rewards employees can choose from. If you have a team helping you, use a good project management tool so they can visualize step-by-step what they need to do to secure these incentives. The tool will also help you determine whether they’re making progress in their talks with these potential partners or not.

Whatever incentives you choose to offer, make sure they align with what your employees want. You can create employee personas to help you make informed decisions. What is an employee persona? It’s like an ICP in sales. It’s a visual representation of specific segments of your workforce that can help you create targeted experiences for employees. 

4. Use the right software

Software that allows staff to see how their referrals are progressing can be a great motivational tool. The right digital solution can offer much more than monitoring and tracking, however. Choosing the right technology can simplify and streamline the process for staff and allow business leaders to produce a recruitment report to see how well the program is working.

Some of the key features you should look out for in a software package are:

• Allowing employees to make referrals
• Referral monitoring and tracking
• Tools for sharing jobs on social media
• Referral email templates
• Managing/viewing bonus payouts
• Facility to upload resumes and applications

5. Use gamification

In addition to using the right software, gamification is one of the latest trends in talent acquisition. It can motivate staff to make referrals by utilizing points-based systems and gaming elements such as leaderboards to boost transparency, friendly competition, and engagement.

6. Avoid bias 

When you rely on employees to refer candidates, there’s always a risk that they will refer friends who they like rather than those who would be the best fit for the job. Make sure to test candidates on things like digital skills and industry-specific knowledge, just as you would an applicant with no employee links. Some key areas to test could include:

• Leadership skills
• Time management skills
• Emotional intelligence
• Creativity
• Problem-solving skills

Another way to remove bias is by using blind referrals. This means it won’t be clear to hiring managers which applications came via a referral at the screening phase, ensuring a fair selection system early on based on merit.

7. Take security seriously

Security in recruitment is a must, especially when you’re involving extra people in the process. Luckily, data privacy can be managed with the right software program, limited sharing of sensitive data, and protection when employees use the system log-in, like phone number verification online. 

Allowing employees to see how their referral is going – whether it’s gone through, where the hiring process is up to – can help, as mentioned earlier. However, they should only have access to a restricted section of information, with the rest remaining confidential and in the hands of the recruitment team only.

Pay attention to the communication channels you use as well. If you utilize email to promote your referral program to employees or to communicate with potential candidates, leverage good cloud email security services to ensure all your messages are protected from external threats. Make sure your video conferencing software also offers end-to-end encryption that applies to all types of content shared on the platform.

Final thoughts 

Current employees can be a great source for attracting new talent. Rather than accepting referrals on an as and when basis, take the time to build a complete strategy with clear procedures everyone can follow.

Once you have a strategy in place, encourage your employees to participate by providing training, highlighting incentives, and investing in the right software. 

With careful planning, a referral program could play a crucial role in your recruitment strategy.