Keeping an employee referral program as a strategy for hiring purposes is one thing and executing it well is another. If done right, these programs can help hire candidates that are more likely to perform better, stay for a longer period of time, and also help attract passive job seekers which can be perfect candidates for the job.
Employee referral programs, also known as internal referral machines, are a quick way to solve the hiring problems for any company. They are extremely low-cost and offer a high-quality way of hiring perfect candidates. A recent survey by the Canadian HR Reporter claims that these programs are the best sources of new talent, even surpassing conventional resources like online job sites or newspaper advertisements.
As simple as they may sound, employee referral programs are not successful if you don’t follow the right methodology. In this article we shall discuss how you can create a strong internal referral machine and execute it within your organization. By the end of it we hope you will be able to create an internal referral machine which actually works, rather than it becoming yet another hiring strategy on paper.
Get the right managerial support
To create and roll out an internal referral machine that can really succeed, you must build a strong business case to get an approval from the management. You have to influence the managers at the organization to garner their support for the program. Without this, the program just cannot run.
To pitch your ideas for the internal referral machine to the management, you need to ensure you communicate properly with them. You must make the management understand that you get their point of view and know about their situation. You’ll need to create enough support in the mind of the management for your employee referral program.
Putting forward your idea formally on the table might help entice the hiring managers. But that’s not it. You still need to support your pitch with the relevant facts and figures. You should also lay down a clear set of examples that further expand your ideas. Make sure you focus entirely on the business case for the employee referral program.
A typical business case for an internal referral machine may look like this:
- Explain the benefits
- Add support with graphs that help explain the numbers
- Explain financial aspects of the program
- Explain how the internal referral machine will help improve employee engagement
Designing a strong internal referral machine
Ideally, you want to design a strong internal referral machine that motivates both employees and hiring managers. This makes sure they are both on the same page and eager to participate in the program. Without this, the program cannot be a success.
Once you have the required support from the top management, you can start designing the actual internal referral machine. Letting managers become a part of the design process will help keep the management engaged and interested in the program. You should incorporate any feedback you receive from the hiring managers.
While designing an internal referral machine, you need to consider a specific set of elements that will form the basic framework. These are;
- Rules for participating in the program
— Which employees will be eligible?
— How employees can refer others?
— How will you deal with situations where a single person gets referred by two different employees?
— How can candidates be evaluated?
— How employees will be notified on the successful hiring of their referrals?
These form the basic framework of the internal referral machine. These rules will also define the level of interest that your employees show towards the program. Remember, the internal referral machine is nothing if it doesn’t enable a large set of employees to participate. You also want to think about the process which employees can follow to refer their friends and family for job positions. These could be either electronic or manual methods. While it may almost never happen, you might want to consider odd situations that may arise when the same set of people are referred by different employees. All these points need to be thought about while designing the program.
- Referral forms
The rules you created in the first step will ultimately shape the referral methods. You could create electronic referral forms which are much easier and less tedious to track while some employees might prefer hard copies of referral forms. These forms must be carefully designed so that they reveal the right information that both the employee and the referral can find useful. Automated forms can integrate easily with applicant tracking systems. These referral programs can also be a part of game mechanics which can be deployed in the system.
- Individual rewards
You need to consider the right kind of rewards for employees while designing the program. If an employee knows a great person for the job but isn’t motivated enough with the rewards they might receive, they may not even make an effort. You need to keep suitable rewards for each job position that you are looking to fill. This will come down to picking bigger rewards for the top executive positions and smaller ones as you go down.
- Dispute handling
Any internal referral machine must have a dispute handling mechanism. If a lot of your employees are going to have a hard time tracking referral or waiting or their rewards, your program is going to come down. This will further demotivate other employees too.
Automate your internal referral machine
When it comes to execution, automating your internal referral machine makes a lot of sense. It will help you simplify the process and keep your employees satisfied. Automation can basically revolve around sharing job openings cyclically. This involves automatically posting these openings on a regular basis.
A good way to run these automated posts is to use push notifications when the network is more active. If the members of your external and internal network are sharing jobs on a Friday evening, then you should try and post a maximum number of listings during that time period.
Another key element to add to your automation efforts is the data in your applicant tracking system. While using this system you’ve already found a lot of referrals that seem like good candidates but you can’t always be sure. Use the data automatically from this system to make out which candidates are better suited for the job.
For example: Consider two candidates A and B who have sent applications for the same job. The data from the applicant tracking system will be able to automatically filter out candidates based on their educational backgrounds. This will enable you to suggest the right candidate to your network which can then vouch for their background experience.
Another important aspect of automation involves creating leaderboards. They bring in game mechanics to the entire process. It helps increase employee engagement and raises a level of competition amongst them. Research claims that around 70% of the top 2,000 companies globally have deployed at least one game mechanic in their hiring processes by the year 2014. Going forward, game mechanics have been used up in a number of ways to enhance internal referring machines.
Automated leaderboards will take the pain out of the entire process. You won’t have to count points, measure progress or activities manually if you use leaderboards. These modern leaderboards also synchronize with your applicant tracking system. It ensures the system works fairly and automatically for all of the successful referrals. Employees can be made aware of their progress in real-time.
Encourage referrals right from the go
To ensure a constant flow of talent you have to build a pipeline using an internal referral engine. You have to encourage employees to make use of the program right from the beginning. Creating an onboarding process helps employees get familiar with how the system works. Creating rich notifications that go out to relevant employees when a specific job listing goes out works well since these employees are likely to have a social circle amongst similar people in the industry. A proactive encouragement on your part goes a long way in keeping targeted referrals from landing on your system at regular intervals.
Implement new technologies to improve the process
Internal referral machines are likely to get outdated if you don’t add support for the latest technologies. The world has consistently moved on from web to mobile in the last decade. Your focus should be to keep your internal referral machine relevant and accessible at all times no matter what platform your employee network uses. Some of the best companies in the world have successfully implemented internal referral machines using mobile based applications.
Lately, big data analytics have entered almost every type of industry. These analytics are based on a large chunk of data sets that was previously not being used. All this historical data and can improve hiring processes and ultimately your internal referral machine. Several service providers offer direct solutions while some may offer you an unlimited supply of data that you can use in your internal referral machine. Big data solutions can directly integrate with applicant tracking systems to help you make an accurate view of the prospective employee’s status.