In this tough hiring environment, an employee referral program can be an excellent way to recruit potential job candidates. It’s not only an additional avenue beyond traditional methods and beyond your own networking efforts, but it’s one that can potentially bring in more suitable candidates. You trust the work your employees do for your company, which means they likely have great instincts as to others who might also be a good fit and who are enjoyable to work alongside. Employee referrals essentially are a form of word-of-mouth marketing and networking for your company, only from a recruitment standpoint.
But implementing an effective employee referral program does require thought and attention, and some may find results for their programs to be underwhelming and lacking in good candidates.
Throughout my time in the recruiting industry over the last two decades, I’ve helped numerous businesses implement successful referral programs. Often, they already have one in place but couldn’t put a pin on why it isn’t successful. I’ve narrowed it down to some of the common factors that I see that prevent an employee referral program from being successful.
1. You don’t promote it enough
You set up an employee referral program and let your employees know about it, so now it can bloom, right? Unfortunately, no.
You can’t just talk about it once. Putting a referral program into action requires consistent reminders to your team about how they can participate and what they gain in return. This could be a quarterly note in their paychecks indicating that their check could have had extra money in it; you may even change the reminder for the season, such as “Looking for extra vacation money?” And perhaps remind them to think beyond their friends and family to the others in their lives, such as a friendly, customer service- oriented barista who serves them every day.
If you have a marketing team, you may con- sider consulting with them for ideas on how to internally promote the program. If you do it right, you can turn your money-hungry employees into roving recruiters.
2. You don’t make it matter
Employees have to feel some ROI in the referral program to want to make an effort to participate. Offering a team member $100 or a gift card likely won’t be enough to encourage them to spread the word or actively seek out people in their network who could be a good fit. You need to make it worth their time—give them a reward that will cover paying off a credit card, cover a weekend trip, allow for the entire family to go to a theme park for the day, etc.
I’ve seen companies pay tens of thousands of dollars in recruiting fees to a headhunter, yet shy away from offering more than $250 in their employee referral program. Offering your team an incentive that actually makes a difference to them may just give them the motivation to be intentional and active about recruiting.
3. You’re making it too hard to earn
Don’t tie the prize to retention. Lots of times, business owners won’t pay their employee for bringing in a referral until the new recruit lasts 90 days. But that infers that the employee is now responsible for their coworker’s retention.
As a third-party recruiter, I don’t guarantee that an employee I place will be around for three years. That’s up to the employer and the leaders within the company. You can’t expect the person who referred a candidate to be responsible for their retention as well. Don’t get me wrong, you can offer both a sign-on AND a retention bonus, but don’t group the two together. It can make a referral bonus a lot harder to obtain, and therefore a lot less motivating to work toward.
Oftentimes, a small tweak or consideration of the points listed above can make a massive difference in results. Your team will be more fired up about the actual opportunity to make money with fewer hoops to jump through.
Rikka Brandon is a leading recruiter for the LBM industry. She’s the CEO of BuildingGurus.com and founder of RecruitRetainRock.com where she helps business leaders solve their recruiting and retention challenges.