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Employee Referral Program : Making it work

Updated: Aug 11, 2020

Employee Referral Program (henceforth referred as ERP in this article) has become an integral part of Recruiting Function. Organisations have large & dedicated teams to handle employee referral process. Despite having focused efforts on ERP, the success rate is still not what any organisation desires. This article shares some of the challenges ERP faces and how industry best practices are able to address those challenges.

Lets start with challenges faced by Recruitment Team while implementing ERP:

  1. Non-participation of employees – Despite promoting ERP, employee participation is very low. Are employees not interested in referring or is it something else?

  2. How to link incentives? - Do we know the right model to reward referrals? How to maximise the incentives?

  3. How to increase footfall & conversion? - Even with employees participating in ERP, not many referrals hit the inbox and even if it does the conversion is low.

While executing an ERP, many times organisations miss out basic elements. Addressing those basic elements will weed out many of the related issues. Increase awareness among employees - Many times employees are not aware of ERP itself or the open positions.

  • Create visibility of ERP - advertisements (still or video), campaigns, road shows, ads on internal sites.

  • Open positions should be communicated like targeted advertisement - 12 sec window and relevant.

The best way to address this basic issue is by creating 'visible communication'. Many organisations send regular emails to employees. However, the ERP emails are so lengthy and with so many unnecessary details that generally employee prefers to ignore it. Right amount of communication is the key here. If emailer is used, construct it in such a way that a 10 - 12 sec window is enough to communicate the message. Print campaigns (picture based) on ERP are the best options - highly visible and captures attention quickly. Don't list all open positions in the mail. Make it relevant - segregate function wise / role wise / skill wise in subject header and put max 5-7 positions in the mail. A noticeboard with 5-7 open positions at entrance points or cafeteria is the best place to attract attention. Educate employees on how to refer someone - Surprisingly, many employees don't know how to refer someone.

  • Answer Ws & Hs for employees: Where to look for open positions, Where to refer, When to refer, How to refer, What details are required while referring, etc

Ask employees if they know how to refer someone, most probably they will not have correct answers. Process awareness is the key here. Solution might be regular road shows by recruitment function or a demo video hosted on internal website or a reference document shared with open-position communications. Simplify the referral process - Many times ERP is so complex and time consuming that employees prefer not to refer.

  • Keep the referral process very simple. Thumb rule is : an employee should be able to complete the referral process in less than 1 min and should not take more than 5 steps

Don't add more pain by making employees enter too many details. Many times these details are not on the resume and hence employee needs to call their friend to get those details. Simplify it - have min. no of steps to refer, keep min. no of fields to be filled up by the employee. Many organisations use upload resume facility and recruitment engine parses the resume for details or an automated email is sent to candidate requesting for details rather than asking employee to input the details. Educate employees on how to be a successful referral - Employees do not know how to find the right candidate. They don't know how to sell the role to the candidate.

  • Educate employees on sourcing techniques including leveraging Social media/groups/communities

  • Educate employees on how to sell the organisation

  • Share selling pitch / contents with employees

Sourcing right resume is a technique. Referring someone for right position is critical for the success of ERP. Recruitment teams need to educate employees on how to search right profiles. Educate them on search methodologies on social media channels. Guide them on how to sell the organisation & role to the candidate. Share content with them which they can use while talking to candidates. Employee demands special attention - They want their candidates to be prioritised.

  • Take special care of Referral candidates in all possible ways

Most common complain by any employee on ERP is the delay in processing the referred resumes. They expect it to happen quickly. Their is nothing wrong in this expectation as they are internal to the organisation. Candidates also keep on pinging their referrers for status updates. Recruitment function needs to prioritise employee referrals. Process them ahead of other channels & speed up the process. Provide an update to referrer on status of candidate at each interview stage. Recruiter should provide detailed feedback to referrers on rejection reasons of their candidate. Motivate Employees to refer - Appreciate for the effort also.

  • Reward lavishly with tangible and intangible benefits

  • Match reward value with position (uniqueness and level)

  • Reward for right referrals but unconverted ones also

Lets ignore the philosophy that employee has the ownership to create a world class team for the organisation and hence referring is part of their job. Truth is that employee is helping recruitment function. Rewards & incentives should be for those referrals also which were close to being offered like rejected in final rounds - idea is to appreciate for the effort also. Ensure that reward is proportional to the difficulty of the hiring. Open your pockets while rewarding. Employees are good in maths, if the probability of selection is low and the efforts are very high, chances are that they would not be inclined to refer someone. 5% to 7% of one month salary of referral position is still cheap compared to what organisation ends up paying 8% to 15% to consultants. Think beyond cash incentives since it gets taxed - from employee perspective you are giving them ~70% of referral amount only.

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