Creating Powerful Employee Referral Programs
Posted December 10th, 2012
Companies are always looking for new talent, and one of the best ways to get new talent is by having current employees refer people they know. Unfortunately, this is usually a hit or miss process, where only a small percentage of employees bother to refer anyone.
To increase the number of referrals and get more employees involved, companies need to set up a formal referral program that has set goals and rewards built in, according to noted human resources consultant John Sullivan. Without such a program, at most you will get little more than five percent of your hires from referrals.
To improve the number of referrals, Sullivan says, start by taking a survey of employees who have made referrals to find out what motivated them to make the referral, what other things might induce them to make a referral, and what they think would improve the referral program.
You also want to survey employees who are not making referrals to find out why. Ask them what would motivate them to participate. You can also check with other companies that have successful referral programs to find out what works for them.
Money is not always the best way to motivate people to make referrals, Sullivan says. Only about 10 percent of employees say they make referrals for money. Statistics show that companies that have well-planned referral programs can get almost three-fourths of their people from referrals without using cash rewards.
Among the examples Sullivan gives as referral incentives is simply the knowledge that hiring the best people increases the chances of success for everyone and just improves the company environment. Everyone wants to work with the best people.
Recognition also is a powerful motivator in making referrals. A personal note or call of thanks from one of the company leaders for a successful referral is a great way to promote the program. Other forms of recognition include certificates and even lunch with the CEO. Prize drawings and other rewards of merchandise, services or entertainment also are good ways to get employees involved.
To really put some power behind a referral program, companies should also make it a part of the performance appraisal for all employees. It should also be one of the requirements for promotion.
If your San Francisco-area company is looking for great workers for either temporary or direct-hire opportunities, give the recruiters at Bayside Solutions a call. We look forward to hearing from you.
