It is a tricky business setting up a successful employee referral program (ERP). Success depends on buy-in from three parties: management, employees, and recruiters. Rather than take away from the recruiters job (and commission), a successful ERP can free up time to spend on filling the remaining positions with better quality candidates.

If you need some convincing to either implement or revive your ERP, here are three reasons you should implement an ERP:

  1. Referrals are high quality candidates and high quality new hires. Referrals are less likely to waste your time, and if hired, they are more likely to hit the ground running.
  2. Referred employees can be a better office cultural fit and help build a more collaborative environment. Referrals can really strengthen the employee brand.
  3. Referrals can also improve retention rates.

Even if you’re sold on the value of an ERP, it is easy to make mistakes in the implementation process. One way to kill your ERP: wait to pay bonuses on things the referring employee has zero control over, such as whether the referral is hired and/or whether the new hire stays for a certain period of time. This tactic is demotivating and signifies a distrustful work environment.

Here are five things to consider if you want to start or revamp your ERP:

1. Implement a phased reward process.

Give employees a small token of thanks at each step along the way. For example, a $5 gift card for a phone interview; $25 gift card for a face-to-face interview; and a monetary bonus if the referral is hired. The small tokens help to prevent discouragement – especially with a long hiring process. Cleared referrals should result in a larger monetary bonus, reflecting the greater value of a completed hire.

2. Recognize employees that are participating in the ERP.

Money isn’t the only motivator, so praise them or give out awards at meetings to the individuals making referrals and building the company’s employee brand. For younger employees, in particular, the recognition incentive will go a long way in encouraging participation.

3. Streamline the interview and hiring process for referrals.

Implement a “VIP code” to move referrals through the process more easily. That incentive for candidates will encourage your employees to make the referral. If your hiring process is slow and impersonal (even for once-vetted candidates), don’t expect many employee referrals.

4. Set clear expectations.

A good employee referral program is specific. If an ERP is to be valuable for you, employees should beIdentify how referrals that are not in response to a particular job posting will be handled. Employees should know how their friends will be treated and what is happening.

5. Make the ERP simple.

Don’t make it so complicated that it discourages employees from wanting to participate. The process should be clear and easy to understand.

It is really about the office culture. Hire employees that buy into the office culture and then work really hard to make it easy for those employees to bring in others that are also top performers and culture-minded. An ERP is also a great way to assess the overall office happiness. If you have a great ERP and referrals are down, it could be an indicator that you’ll have even more positions to fill soon. Unhappy employees will not refer people within their network.

 Cleared Network Tip: Ongoing Networking

Cleared Network

When you see an employee with your company on a networking site like the Cleared Network, do you immediately notify their supervisor and call them in for a counseling session? Hopefully not! Today, continual networking is more important than ever. An employee that is actively engaged in his or her career growth will also use career networking sites to stay sharp on their market value, as well as to read relevant industry news and updates. If you see an employee of your company go ahead and add them to your career network – and then encourage them to connect you with their friends and connections who would be good company referrals.


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Jillian Hamilton has worked in a variety of Program Management roles for multiple Federal Government contractors. She has helped manage projects in training and IT. She received her Bachelors degree in Business with an emphasis in Marketing from Penn State University and her MBA from the University of Phoenix.