3 Es of an Employee Referral Program

Hiring new workers via employee referral has the potential to pay off big for your company. According to a report by LinkedIn, it’s the top source for quality hires. In spite of that, most companies only allocate around 9 percent of their recruiting budget to an employee referral program.

However, these numbers can be misleading. Getting the most out of your employee referral program requires time and attention in addition to budgetary support. This can be broken down into the three “Es”—engage, educate and enrich.

Engage

Most employee referral program work on a bonus structure, where an employee is rewarded monetarily for each new hire they recommend. There is some evidence, however, that this may not work as well. One example is when Google increased its referral bonus from $2,000 to $4,000 and failed to see results.

Instead, employees were making recommendations because they enjoyed working there. By creating an environment where people feel supported in their goals, values and professional development, they will naturally spread the word that it is a good place to work.  

Educate

You want to make sure that your employees are not just recommending anyone for the position. If they’re referring people who aren’t good fits in terms of skills or culture, then you waste valuable time sifting through resumes and interviews that don’t lead to hiring.

Counter this by holding educational meetings with your employees. Train them on how to spot the right candidate for the right job, as well as how to size someone up as a cultural fit for the company.

Enrich

One reason why employee referral programs tend to fail is because of how bonuses are paid out. Often, it involves manual paperwork and coordination with payroll, so payout often happens months down the road. This can cause considerable frustration and even de-incentivize your employees. A better solution is to use HR software that tracks the process from referral to the interview process to the hiring to the reward, thus automating everything and reducing frustration for all parties.

By incorporating these three elements into your employee referral program, you should start to see quality applicants who fit the culture and mindset of your business. Skywalk Group can also help along the way, from finding the right candidates to training them to helping you retain them. Contact us for your hiring and training needs today.