Breathing Life into Your Employee Referral Program

© 2005 Johanna Rothman.

Your staff holds the key to some of the best hires you'll make. Learn how to extract value from their connections.

Employee referrals are an excellent source of hiring leads. And if you've been hiring for any length of time you already know that.

Almost every organization has some employee referral program, but few of them are as effective as they can be. So how do you breathe life into your employee referral program? Here are six suggestions to make sure you have an effective employee referral program.

1. Identify key people

Key people are the ones you'll turn to for employee referrals. This is the group that you describe to other managers as “If I had three more of Stu, I'd finish everything I need to do here.” Key people are the ones whose productivity appears to be higher, or are a catalyst for teams to outperform other teams. (Admittedly, it's harder to see those catalysts.) Identify those people, so you can ask them to refer people with whom they've worked in the past.

2. Explain open positions to key people

Once you've identified your key staff, explain the open positions to them. Consider telling them about positions beyond those directly related to their own. One of the best employee referrals I have seen was when I told a tester about an open sales position. The tester had worked with a salesperson in a previous company, had maintained contact, and when this position opened up, referred them. Both enjoyed the company's culture and were highly successful for a number of years.

When you explain positions to key people, try including questions such as, “Who was the best developer you ever worked with? What made that person so good?” When you ask behavior-description questions like that, you're prompting your employee to remember specific situations. You can see if the situation your employee recalls is anything like the situation for which you're hiring. If they are similar, ask the employee to contact the person. If the situation is different, focus on your current situation and say, “Oh, I see why that person was great. Our situation is a bit different. (Explain how it's different.) Have you ever worked with anyone in this kind of situation?” Now you've refocused your employee to think about people who would fit your organization.

Don't expect an answer immediately. People may need time to think about previous situations. Tell your employee to take time to think about potential candidates. Arrange a follow-up discussion in a few days.

3. Make referral fees worth an employee's time

Referral fees can be tricky. You don't want a referral fee so high that people stop working — but you don't want it so low that people don't bother calling their friends and colleagues. My rule of thumb is that an employee referral should feel like a substantive bonus to an employee. If you're concerned about money, remember that cash isn't the only thing that will feel like a bonus to an employee. Consider other perks: a book allowance, conference admission, extra training courses, maybe even more vacation days. You may even want to implement a tiered referral fee, so that employees don't just receive a fee after 90 days of the new hire's employment, but enjoy some benefits before then.

4. Keep paperwork to a minimum

Aside from a reasonable referral fee, boatloads of paperwork will turn off an employee referral program. Make it easy for employees to submit a candidate. The more onerous the referral paperwork, the fewer candidates your employees will refer. If possible, make your employee referral program electronic, but allow for the possibility of your staff to bring in paper resumes.

5. Show that hiring is a priority for everyone

It's easy to say that hiring is a priority. But if you show that hiring is a priority with your actions, such as explaining your hiring status at each group meeting, you're showing your employees that hiring is a priority for you. Your urgency will help your staff feel urgently about hiring also — prompting them to refer others to you.

6. Encourage your employees to discover other folks professionally

Your employees are ideally placed to find passive candidates, in other words, the people whom you would like to hire but who aren't looking. Your employees will find those people by networking at professional meetings, or at alumni (corporate or academic) events. Encourage your employees to attend professional group meetings or participate in online forums of like-minded people.

Check with your staff when you start hiring, to make sure everyone knows what actions to take in order to refer a candidate. You may have other barriers preventing your staff from sending you candidates.

You'll know if you have an effective employee referral program if you have identified your key employees, explained the kinds of people you're trying to recruit, if your referral fees are reasonable, if paperwork is easy for employees to navigate, if your actions show that hiring is a high priority for you, and if your staff bring in candidates.

An effective employee referral program will bring in high-quality candidates. Make it easy for your staff to refer the best people to you.

Like this article? See the other articles. Or, look at my workshops, so you can see how to use advice like this where you work.

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