Getting the Most Out of Your Employee Referral Program

by Marcy I. Link on April 2, 2013



Whether the IT candidate market is sparse or saturated, finding quality contractors has always been a significant challenge to the enterprise. Companies utilize their corporate website, job boards, LinkedIn, and even Facebook in their attempts to attract contractors, but the chance of getting an “A” player is slim. For many years, the employee referral program has taken a bit of a back seat with the increased accessibility of candidates through an increasing number of available tools. Today, however, the employee referral is still considered to be one of the best and most reliable methods of sourcing qualified candidates. Employees risk their reputations when making a referral, so they likely won’t refer someone who would make them look bad or that may not work out at the client.

Many companies have employee referral programs in place, but it may by underutilized or not used at all. Here are a few ways to get the most out of your employee referral program:

  1. Advertise it! Most contractors are subtly aware of their company’s employee referral policy, as it’s likely a footnote to the orientation package. Instead of leaving it in the back of the packet, bring it forward and actively discuss the basics of the program. Re-introduce your staff to the policy regularly, reminding them of the incentives involved. Make the program an integral part of the company’s Facebook page so that your employees’ networks are exposed to it as well. It’s a great way to generate positive buzz around your company.
  2. Incentivize! Without question there needs to be incentive attached to the program. Most involve monetary compensation, but some programs are creative and offer the employee additional time off from work or weekend vacations. Regardless of how you chose to compensate the employee, make sure it’s commensurate with your competitors.
  3. Pay It Forward! Offering an employee a one-time bonus is a great way to incent them to refer someone, but building a plan that continues to compensate based on additional hires adds an extra layer of motivation. Sourcing and hiring a great candidate is great, but ensuring longevity by continuing to offer referrals to your company is crucial. Continue to reward the referrer and it’ll pay great dividends in the long run.
  4. Matrix It! Don’t stop compensating the original referrer – build a matrix that will reward employees whose referrals refer people, and so on. Tapping into a network of great referrals is like a gold mine for recruiters. A program that is designed to reward the employee over time, and through multiple referrals, is both an excellent retention and selling tool for the organization.
  5. Bonus It! Employee referral programs work especially well for candidates with hard to find skills or for highly sensitive or complex projects. If your employees can refer these needle-in-a-haystack types of individuals, pay them a little extra.

Employee referrals may be one of the most reliable but underutilized sourcing tools available to recruiters today. Without question effective programs require a significant financial investment and commitment from the enterprise, but its cost far outweighs the consequences of a bad hire.

By: Marcy Link