The Five Essential Steps to Creating An Employee Referral Program

March 29, 2016 at 10:06 AM by William Clarke

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Referral programs are the single best way to net quality hires in less time. Referrals are more likely to be hired than non-referral candidates, complete onboarding more quickly, have higher retention rates, and generate more profit than non-referral hires. You may already have a referral program, but a few tweaks here and there could make all the difference. Here are five essential steps to creating (or refreshing) a referral program.

Calibrate the team on the profile of an ideal candidate.

The first, most crucial step: Define your roles and requirements. Since referral programs rely on the judgment of your staffers, it’s imperative you give them all the information they’ll need to figure out which of their contacts are ideal fits. Work with your hiring managers and other stakeholders to lock in requirements and sync up on what the position and ideal candidate look like – that includes daily tasks and duties, experience level, and skill sets. 

Try building out multi-tiered lists of candidates who exemplify three types: the perfect fit, the satisfactory fit, and the unqualified. This will help to align recruiter and hiring manager expectations of what an ideal candidate looks like, and what talent pools realistically have to offer. From there, recruiters are able to rank a list of candidates potentially fit for the role.

Provide a clear, accessible submission process.

This is one part that is often overlooked. Make sure your team knows how to submit candidates’ information for the referral program, including resumes, links to their social profiles, and email addresses.

Here’s an example of what we look for when submitting referrals:

Subject line: Referral for Customer Success Engineer, March 2016

Hi Vivek,

I’d like to refer Aaron Jameson for our Customer Success Engineer role. I used to work with him at my previous company. He’s been leading the CS team at ABC Company for about two months, but mentioned he’s unhappy with the team and is interested in a new role. I think he’d be a good fit given his experience in the enterprise space.

Job title: Customer Success Engineer
Referral date: March 29, 2016
Referring employee's name: Kathleen de Lara
Candidate's name: Aaron Jameson
Candidate's email: aaronjameson@gmail.com
Social URL link: https://www.entelo.com/profiles/123456789/aaron-jameson

In this example, the subject line explains the role and the month and year the referral was submitted. The first paragraph provides context to the relationship between the employee and candidate. The last section is a list of referral details, including the candidate’s contact info.

If it’s available, encourage employees to attach the referred candidate’s resume, too.

Prioritize the roles you want to receive referred candidates.

Among the open roles you’re hiring for, decide which teams require the most attention, and curate a list of high-priority roles. One way to add some extra motivation is to set up tiers correlating the referral bonus to how in need a role is. For instance, if you’re hiring for an SDR and a full-stack developer, and the developer role is of a higher priority, offer $1,000 for an SDR referral bonus and $2,500 for a developer referral bonus to emphasize the importance of fast-tracking tech candidates.

Of course, compensation isn’t the only way to motivate employees to share their network of qualified candidates. For instance, Google asks their employees about the best people they’ve ever worked with and hosts sourcing jams to keep the referral train chugging along. The key is to creatively keep people engaged with the value of referrals so that they keep productively mining their networks.

Build email templates to encourage employee referral outreach. 

Proactively and regularly remind your team to reach out to their contacts for open roles at your company. The outreach is warmer because it’s coming from someone the candidate knows, and it also potentially opens the conversation for a primed introduction to someone from the hiring team. It’s helpful to share pre-drafted email templates that employees can use to jumpstart the conversation and keep them in the loop as things move forward. Remember: Referrals often move faster than other hires, so proactive recruiting with referrals can really pay off.

Balance out your use of referrals. 

Like most other good things in life, referrals are best in moderation. Excessive dependency on referrals can turn your office into a homogenous environment that makes hiring and retaining non-referral employees more difficult, especially when you’re building out or developing new teams. A strong referral program is at its best when balanced out with candidates from other sourcing channels.

A healthy referral program is a crucial part of any hiring strategy, and it’s also a great way to drive company morale and culture. Including staffers in the hiring process gives them a stake in the future of the company and finding smart, talented new staffers to work alongside. It’s a true win-win.

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