Reasons Why and How Employee Referral Can Be Leveraged Effectively

Last Updated: December 16, 2021

Hiring the best and loyal employee for your firm is very essential and a proper employee referral program helps you accelerate your recruiting process, giving you a talented person on-board.

You own a modern-gen business which is on the growing axis on the graph and you want to increase your workforce including highly talented people in the seats.

One of the best ways to do that is by leveraging your employee referral scheme.
 
You must be curious to know why and how can you do that.

Well, we bring here the reasons and tips to leverage effectively your employee referral program.
 
Why leverage an Employee Referral Program inside the business itself?
Efficient and tenured employees are the biggest asset for a business to grow to unimaginable heights.

Thus, you need to hire the employees whom you can trust to work with for a longer tenure.

As per the statisticsOpens a new window , on an average, the chances of retaining a referral in an organization is more than 46% which is more than the chances of the candidate hired from a career site i.e. only 33%.

So, here we start with this benefit and explain why is it necessary to develop and enhance an employee referral program

Perk #1: Referrals serve a longer tenure

As the statistics above show the numbers, here I mention the reason behind it.

A referral is already aware of your company’s culture before joining, thanks to your existing employee.

When they feel that they know your company’s culture, they adjust quite quickly into it and start delivering the results.

Knowing the work pattern, they work in a way they want to get rewarded and when that happens, their morale increases and they become even happier to stay with your organization.

Also, as they had the influence of their friends to join you, they work gladly to make their friends and the organization feel proud of themselves.

Perk #2: Referrals reduce your recruiting expense

While you take assistance from an outer recruiting agent, you pay a certain percentage of the hired candidate’s salary.

So, the higher the candidate’s salary, the higher the amount you will pay to the recruiting agent without even any guarantee of them staying with you for a longer time.

Whereas, you can offer your company’s employees even a fixed amount for every referral irrespective of the salary of their referral hired and they will bring you quality employees which can assure you of a longer stay.

Here, you are saving a lot of recruiting costs because you put a threshold on the cost of recruiting and still attain the best results.

Perk #3: Existing employees stay even longer

When your employee successfully refers to a candidate and they get the referral bonus credited in their accounts, they get highly motivated to stay longer with your organization.

Also, when they get a chance to bring a friend to work, they enjoy working and in the end, they become productive and perform for a longer time.

Moreover, when they see that the person they referred gets recognized and they get praised by their superiors for bringing the correct talent in the workforce, this motivates them to refer more and stay more.
 
However, you might still be puzzled about how to develop and leverage an employee referral program effectively to reap all the benefits from it.

Here, we mention some of the most useful tips that can help you design the best one.

Tip #1: The simpler the better

You might think of designing a fancy referral program, where you could end up confusing the things for your employees.

Design it so simple that it is easy to remember and can be shared in simple one or two sentences.
Keep it highly attractive yet very simple to communicate.

Such as, $5000 per successful referral who completes at least six months, or something like that.

This way, the employees would be interested to dig in more into the program and would love to participate on a larger scale.

Tip #2: Appreciate and Reward your employees

We know that we have paid a huge amount of referral bonus and that can be enough for them.

But here’s the catch, not always money plays a major role. Some employees love to assist their company, love to bring in good talent around them and they wish to get appreciated for this.

So, hold out the events where you call out all the employees and referrals and appreciate them for their participation in the referral program along with their work performance as well.

You can also reward them with goodies, some cash incentives, movie tickets or a dinner, etc. which will make them happier and they would participate more open-heartedly.

Tip #3: Innovate. Apply. Increase. Repeat.

As the originator of the employee referral program and to get the maximum results out of it, you need to keep on innovating various ways to interest your employees to participate in the referral program.

Once you, collectively with your team, innovate those new ideas, apply them on a larger scale and spread the word like a fire.

You will get to know the results after the application of your new strategy and on that basis, you need to innovate more, either to change the flaws or to enhance the current strategy and make it more interesting.

Thus, all you need to do is keep on innovating and bring all the creative strategies to indulge your employees more and more in the referral program.

Examples for some innovations can be counted as giving a foreign trip to the employee referring the maximum candidates in a month or some household or personal gifts on a certain number of referrals, and there are innumerable ways to innovate.
 
Did you get your best referral program designed?

In business, management always struggles to find the correct talent to perform the required tasks.

However, your employees who already know your expectations and requirements can easily find you a perfect candidate matching those if they are motivated appropriately.

Thus, you should leverage the employee referral program in your organization on a larger scale with being innovative, appreciating the employees, rewarding them correctly and maintaining the friendly culture to develop your business.
 

Sourodip Biswas
Sourodip Biswas

Digital Marketing Executive, Space-O Technologies

Sourodip Biswas is a Digital Marketing Executive at Space-O Technologies, a Web and Mobile App Development Company. Being an adroit Digital Marketer, he focuses on the growth of businesses with thought-provoking ideas, apt strategies and has interests in regional variants of the English language like American English, British English, Canadian English, Australian English, and New Zealand English. He likes to read trends about Math and Science. Outside work, he is passionate about Video Gaming.
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