You can find great job candidates among your employee referrals. And this can prove especially true for companies first starting out. Your team members know what doing the job entails. And they can reach out to skilled people you’d never know might be interested in signing on. So let’s find out how to establish or promote such a program. We asked a panel of Young Entrepreneur Council members the following:
“What is the best way to set up a long term a successful employee referral program?”
Here’s what YEC community members had to say:
1. Only Hire Through Referrals
“We have only hired from within our organization. We do not incentivize our employees, but they know how close of a family we all are, and they understand bringing in someone from their life will allow them to work with someone they already trust on a daily basis.” ~ Zach Binder, Bell + Ivy
2. Foster a Great Culture
“Great companies attract great people. Recognize that your company is the collection of its employees, and do the work to foster a culture in which employees feel valued, appreciated, motivated and happy. Establishing a strong foundation will prompt employees to recommend your company to strong performers in their networks, which will continuously build upon your talent base.” ~ Stephen Beach, Craft Impact Marketing
3. Acknowledge Good Referrers
“If you were referred an employee you’re proud to have on your team, acknowledge this to the person who referred them to you. Without their recommendation, you wouldn’t have this valuable asset added to your team. At the bare minimum, acknowledge and thank them for their stellar referral. This could lead to more in the future.” ~ Jared Atchison, WPForms
4. Explain the Job Requirements
“In order to have a successful employee referral program, you need to explain job requirements. You don’t want employees referring you to their good friends who don’t have the qualifications needed to be successful in the position after all. So, explain the job requirements clearly to your employees so that the candidates they bring will be a good match for your company.” ~ John Turner, SeedProd LLC
5. Create a Variety of Rewards
“If you choose a monetary incentive, create one that is a tiered system. It’s a great motivator for employees to participate. Offering larger amounts very difficult positions to fill. Offer a small reward for a referral and then, an additional amount if that referral results in a hire. Also, don’t discount non-monetary incentives, which can be more fun and intriguing as well as more cost-effective.” ~ Blair Thomas, eMerchantBroker
6. Market Your Referral Program
“If you set up an employee referral program, you need to make your team is aware of it and even remind them that it exists from time to time. So, you need to market the program. Whether it’s putting up a poster in the office, sending out email campaigns or even rewarding good referrers with exclusive company swag. Seeing these marketing efforts consistently will encourage others to participate.” ~ Stephanie Wells, Formidable Forms
7. Be Creative With Rewards
“Do not make rewards solely based on money. Instead, make a portion of the reward cash and the other part something else. Maybe free tickets to an upcoming concert or three extra days of paid time off. Employees love money, but the other stuff can make your referral program more exciting and increase participation.” ~ Andrew Schrage, Money Crashers Personal Finance
8. Provide Upward Mobility
“The best way to incentivize successful long-term employee referrals, in my opinion, is to provide upward mobility for employees who successfully recruit quality team members. This means that your most ambitious employees will go to great lengths in order to find quality talent for your company, who can then recruit quality hires of their own and continue the cycle of positive growth.” ~ Bryce Welker, Crush The CPA Exam
9. Create a Sense of Urgency and Healthy Competition
“The best way to set up a long term and successful employee referral program is about transparency, or in other words, proactive communication with the company. Have the top ‘hot jobs’ with their job descriptions posted — and names of candidates (and referrer) posted somewhere easily visible. This also helps create a sense of urgency and competitive camaraderie in hiring. Celebrate new hires.” ~ Arry Yu, Yellow Umbrella Ventures
10. Offer Profit Sharing
“Profit sharing is a tried-and-true method for employee retention and referral. Giving an interest in your business creates business and raises the stakes for employees to perform at their highest potential in your business, and encourage others to join or support your business. It is not that money is a universal motivator, but simple referral profit shares are passive income streams.” ~ Matthew Capala, Alphametic
11. Implement Longevity Bonuses
“A standard referral bonus can be enticing, but can also create an influx of referrals that might not be the highest quality candidates. If you incorporate a referral bonus system that rewards employees the longer a candidate stays, it will increase the quality of referrals and help eliminate low-quality hires.” ~ Andrew Saladino, Kitchen Cabinet Kings
12. Focus on Benefits for Your Existing Employees
“As much as you need the new people in your team, you don’t have them yet, so you need to pay attention to the teammates that you already work with. Design the referral program that will bring more value to your existing employees. This will give them the motivation to look for the candidates enthusiastically rather than share the job opening on their Facebook page and forget about it.” ~ Solomon Thimothy, OneIMS
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