Employee referral programmes are at their peak because of their many benefits to employers and companies. Thus, if recruiters or the hiring team are considering conducting an employee referral programme to fill the open position, they must have questions like: What is an employer referral programme? What are the steps to set up the employee referral programme? What are the best examples of employee referral programmes? Let's sequentially understand them.
What is Employee Referral Programme?
Employee referral programmes are a form of recruitment hiring managers use to encourage their hires to recommend trusted candidates for an open vacancy. Hence, it's an internal hiring method with high odds of success because employees know best what their company needs and who would be a compatible match. It is also known as an internal referral programme.
It is not surprising that referrals are at the top of the most time and cost-effective recruiting techniques, making the candidates coming via this method five times more likely to be hired. Thus, referral hiring increases employee retention because your team members know the candidate profile that fits organisational values, goals, and brand.
But what it takes to develop a quality employee referral programme that will bring the best results to your hiring process? Recruiters seek various ways, methods, and techniques to improve the recruiting process and find the best talents.
Employee referral programmes often emerge among the most efficient tools for attracting high-quality talents that stay in a company for a long time.
How to Setup Best Employee Referral Programmes?
First of all, it's the HR departments that have the responsibility for outlining a well-performing company referral programme. Still, development starts with ensuring buy-in from the executives and leaders. Hence, HR professionals must analyse the hiring needs and provide benefits of referrals before presenting their plans. Let's understand the strategy to create effective employee referral programmes.
1. Strategy outline
Once HR experts get the green light, it's time to move on to the final design and strategy of a future employee referral programme. It is recommendable to think through every detail and process and leave no place for ambiguity, mistakes, or failure.
That also means evaluating why you need a company referral programme and whether it is best for your company to source candidates. What needs and long-term goals will you meet by introducing this recruitment form? What will be the ideal outcomes?
Some goals recruiters could achieve by choosing this method are improving the quality of hire and boosting employee retention and morale.
Thus, referral programmes' positive outcomes are lower recruiting costs, eliminating time-consuming hiring methods, and enhancing the talent pipeline.
Another crucial element of the employee referral programme is to consider what is the best way to maximise the number of internal referrals. There are many valuable tips on enhancing your referral efforts; accepting them even when there is no open position and fostering a transparent process are among the most efficient ways.
2. Participation rules
Besides identifying the most efficient communication channels, good recruiters should also consider what's in it for the employees providing them with quality referrals. Although one could recommend an acquaintance who is the perfect match simply because they love their workplace, think about rewarding the hires.
Also, consider whether there will be restrictions on who can participate in the programme and the conditions. You could discourage employee participation if too many limits or paperwork are in place.
3. Communication with the employees
Working on continuous and effective communication with employees and customers is essential. That means recruiters must think of channels they will use to communicate with the hires and perform the process.
Ensure your employees know that your company has a referral programme, and be ready to provide them with additional information and answer their questions. Thus, let your new hires know you offer this opportunity during the onboarding process.
The goal is to provide employees with a smooth, quick, and easy programme. Consider how the hires will submit their referrals and create a form they will use when sending the files. You can choose various options, depending on what you perceive as the most efficient channel. However, you could opt for the company's intranet, email, Excel spreadsheets, or paper.
Some companies use HR technology and tracking systems to collect referrals, while others also use LinkedIn.
4. Progress tracking
The recruiter must implement progress tracking to ensure that the process seamlessly flows and foresee any necessary tweaks. Those data and insights can improve the referral programme and get the best process outcome.
As you measure the programme's success, consider the other metrics and how many employees you plan to hire using referrals. Consider whether you will use other recruitment methods and the number of expected hires resulting from that technique.
It is recommendable to continue tracking even after you have reached your referral hiring quota and to shift your attention to the retention levels of referral hires. Compare it to the rates of those hires sourced using external methods and analyse which brings better results to the organisation.
11 Best Employee Referral Programme Examples
These are some of the best employee referral programme examples for those considering this hiring approach.
1. PURE - Fast and efficient
The American group of insurance companies has an astonishing success with its employee referral programme: PURE sources 40 and 60 per cent of employees using this method. If you are wondering what's their secret ingredient, it's efficiency. PURE doesn't like wasting time.
As soon as they welcome new hires, recruiters ask if they know someone whose skills and experience would be a good fit for the company. With their straightforward and in-res strategy, they generate many referrals in a short time while also emphasising the programme.
2. Salesforce - Happy hours
The cloud-based software company is another American business with a highly well-performing referral programme. They achieve success by providing employees with generous rewards, which are not always financial.
The company is known for creative ways of doing things, and their hires have access to a mindfulness room and support when they don't receive a promotion for over 18 months and are paid to volunteer to help the community.
Their creativity expands to how they collect referrals, and their method is to organise Happy Recruitment Hours, allowing team members to invite friends who could be a good fit. Hence, they also have a fast process that's also fun and engaging.
Another fun fact is that Salesforce's employees get a cash bonus of 2.000 USD for every successful referral.
3. Inmobi - Extraordinary strategy
Mobile advertising enterprise - Inmobi transformed its employee referral programme out of necessity back in 2015. In the beginning, they had only six recruiters to manage 900 people. It was logical that they couldn't keep up with the hiring demand, so they created a great strategy.
After every successful referral for the engineering manager, the referee got a Royal Enfield bike in India (the equivalent of Harley Davidson in India), and the US office employees got a Vespa. Thus, the referrers could choose between a bike and a trip to Bali. The vehicles were parked in front of the company to increase employee motivation.
4. Google - Ask questions
A giant that doesn't need an introduction. Google is another company that likes a quick and straightforward approach. Instead of investing in a comprehensive and demanding programme, Google's recruiters ask their new employees simple questions, such as "Who's the best software developer you know in California?"
That kind of incitement makes people think a bit harder about whom they will refer to, which is known as aided recall. Well, it works for Google!
5. Accenture - Emotional reward
Dutch consulting and IT enterprise Accenture is thoughtful, innovative, and creative. Their employee referral programme works on an intrinsic emotional reward principle: they let their employees donate a part of their referral bonus. Thus, hires get to choose the charity or community.
6. Fiverr - Gamification
When the global freelance platform needed more freelancers, they upgraded their game and started using Zao, a company that offered an employee referral programme. Hence, whenever a freelancer shares their job ad on social media, they would get points. Thus, Fiverr used a leaderboard to incite competition and keep everything transparent.
7. Intel - Diversity method
The American tech enterprise doesn't only care about the successful company referral programme but also about diversity and inclusion efforts. Hence, the referral bonus doubles when hires successfully refer people from underrepresented groups.
8. Godaddy - Codes and puzzles
The American dedicated WordPress hosting makes its best employee referral programme loyal to the niche by putting a poster with code employees have to decode. The coded message says, "If you know of a coder in your network who kicks ass, refer to GoDaddy Recruiting."
9. Booking.com - Food and referring
When the Booking.com team of hiring managers had difficulty finding someone who speaks Portuguese and English to fill their customer support vacancy in Brazil, they brought Portuguese food to the office. That way, they reminded the employees that they needed Portuguese-speaking customer service representatives, filling the position in no time.
10. Enterprise rent-a-car - Challenging competition
The American car rental company loves competition, and its employee referral programme indicates passion. They source one-third of all its employees through internal referrals by creating a contest between the regions where they can refer more people.
11. Distillery - Tech rewards
The American software development company used what their employees love the most to create a successful programme: they reward their employees with new tech gadgets for every referral.
Key Takeaway of the Employee Referral Programmes
When evaluating all these employee referral programme examples and their strategies, it is clear that the principal element is creativity and a reward that leaves an impact. People love emotional incentives, so it's recommendable to give the employee referral programme poignant and sentimental tones or turn to material rewards.