8 Ways To Excite Employees about your Employee Referral Scheme

Woman excited looking at laptopThere is an abundance of research available, which is beginning to shift recruiters and employer perceptions of what is the most effective form of hire. Gone are the days of certainty where you knew a job board was the first and often last port of call for finding talent. Now you have a range of options available for attracting talent and you have to decide which approach is going to yield the best returns. Job boards still have an important role to play in finding talent, but both CareerXRoads and Jobvite have released studies this year which show that in today’s market, the most effective form of hire by some way is not job boards, but employee referrals. CareerXRoads found that referrals accounted for 28 percent of hires compared to just 20.1 percent for job boards. Jobvite results were more extreme with referrals accounting for 40 percent of hires and jobs boards for just 15 percent.

I think we are seeing the start of a sustained trend where more and more businesses start using employee referrals and even crowdsourcing techniques as a means and even preferred means of hiring staff. This brings about new challenges, because in the old days you were just trying to attract candidates with catchy job descriptions, but now, in order to properly drive your referral scheme, you also need to catch the attention of employees  and excite and motivate them into referring candidates.

To help employers in this new socially orientated world of recruitment, we have outlined several tactics you can adopt to enhance the appeal of your referral scheme, which should encourage more employees to actually refer.

1. Focus on cash incentives

While gifts and prizes have some appeal, the most effective incentive is hard cash. A 2010 CareerBuilder survey found that 48 percent of those surveyed said cash bonuses would further motivate them to participate in their company’s employee referral program.

2. Cash incentives must be large enough to encourage action

The survey also found that (as you can imagine) , increasing the size of the incentive was the number one thing employees would change about their current referral schemes. They also found that having a limited incentive for participation was one of the main reasons employees gave for not participating in a scheme. So, how much incentive should you provide to encourage action? There is no rule here, it would depend on company, industry, role level and how difficult the role is to fill. For example, in Canada, KPMG offers bonuses up to $1,000, Shoppers Drug Mart Inc. up to $3,000, AMEC Americas up to $5,000 and Accenture PLC up to $6,000. It is about making an incentive that is a compelling proposition for the employees in your business and sector. So, if you are not getting enough referrals then you may need to elevate your cash incentive levels.

3. Make sure the scheme is easy to understand and the rules are transparent

If employees are confused by the scheme, the scheme’s incentives will not be visible to the employee and will be unable to act as motivators, meaning the employees will not be encouraged to participate.

4. Recognize successful referrers

Employees are motivated by recognition, so ensure that employees who provide successful referral’s are publicly recognized as well as paid a bonus. This could include a mention in a CEO communication,  a call or email from the CEO, or perhaps an annual dinner with the CEO for the employee who has made the most referrals.

5. Use gamification principles to encourage competition

You could also follow gamification principles and turn it into a team competition, giving the departments who get the most referrals a prize. This sense of competition and desire to beat the other departments is a great motivator to act.

6. Build into the performance management process

Why not include a goal for making employee referrals in the performance management process so that employees are appraised annually on their referral activity? This should motivate them to refer more.

7. Keep employees informed of the progress of their referral

In the Careerbuilder survey, 49 percent of applicants said that ‘not being kept informed of the status of their referred candidate frustrates them and makes them less likely to refer in the future. So develop a good update system and process so employees are always well aware of the status of their referral.

8. Show them how to build their referral network

The Careerbuilder survey also found that 51 percent of 15,000 employees cited that training on building a larger better network was the key thing organizations could do to improve their referral program. So give your employees advice on how to build more actionable networks on sites such as LinkedIn and you may see more referrals.

I’d be interested in hearing any more interesting ideas you have to elevate the attraction and excitement levels surrounding an employee referral scheme.

in Employee Referral]
Kazim Ladimeji
Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.