Employee referral programs – making it work

Every company, especially that large ones are increasingly focusing on employee referral programs (ERP). Conceptually, driving referrals sounds very easy. After all, assumption is that tenured employees like the organization and everyone love more money. The question to ask is if it is an easy process, why are some companies successful while others fail.  In this blog, I tried putting together few points which are critical for a successful ERP.

Long term strategy vs short term tactic– Very often employee referrals are looked upon as a sourcing tool rather than pipeline creation. This usually results in chasing employees to refer against jobs rather than asking them to look for people with similar skills like theirs or people whom they find useful to the organization. One has to realize that employee network is not mutually exclusive to that of job sites and Linkedin and if recruiters are not finding resumes on job sites, there are fewer chances that ER will bring in those responses.

Quantity VS spread – One should not be happy with great response to ER initiative and should look at % of the employee base that is contributing towards giving quality referrals and analyse it over a period of time. It is important to try and get as many employees participating that just getting resumes / applications

Motivators – As in any heterogeneous base, some employees tend to be more network savvy (not just networked) and will respond to any job description. And since any ER initiative gets responses from this set immediately, it gives an impression of taking off the ground pretty quickly. However, responses start dwindling from the 2nd or the 3rd day. Reason is that majority of the employees are not motivated enough and for sure money is not the only motivator. A company should spend money and time in finding out what their employees look for and then arrive at referral schemes.

Referral Bonus – Bonus schemes usually follow a pattern of higher the position, higher the cash reward. Though logically, it should work, in Indian context atleast, we tend to refer people for same level or for a level below us.  This will effectively mean for many employees, top positions are usually difficult to refer. So, that leaves people at the higher level. Do motivators change for different levels? Answer is a definite yes. Will cash reward matter for everyone at that level? Answer could be a good split. Can one give these employees choice of choosing what ever they want for the worth of that money? Answer should by why not. In fact, I would propagate, rather than just a cash reward, a wide range of choices for every level, including cash reward.

Agility of recruiters – Often, you would find that employees loose interest in the program due to lack of response or even what employees tend to call lack of transparency. It is very critical to have an agile recruitment team that responds faster to referrals and on priority. In large companies, volumes usually hinder quick responses. Answer could be in having a healthy ratio of recruiters to employees and assigning one recruiter to a set of employees and making that recruiter responsible and accountable for communication with the employees.  Many companies are using technology to channelize applications and one can surely use technology in this direction as well.

Multiple rewards structure – Lets say, there are 10,000 people in an organization and the recruitment team announces 5 positions as part of ERP. Now if you are an employee of that organization, calculate the probability of you winning a cash reward. I am sure you are not inspired by the chances and add to that waiting period of 3 months (depending on the interview process) to receive that reward. In other words, employees might find it attractive if they have multiple chances to win and immediate chances to win, even if the rewards are not very high. Increase the chances of employees to win and the recruitment teams will gain in bargain.

Communication – Last point in this blog, but probably the most critical of the points, importance of communication need not be emphasized in this era of over communication. As important as what you say is how you say. Do you know how your employees prefer receiving these communications? Do you know where your employees spend most time and what they spend their time in? last thing one should do is to stereo type employees and take the channels of communication easy. As an recruitment advertising agency, most of the times I found it easy to crack the what to say or the creative part, but find spending most of my time in trying to figure out how to send that communication.